European Travel Market | Trends & Prospects | Q2 2015

2 European Tourism in 2015: Trends & Prospects (Q2/2015)
© European Travel Commission, July 2015
EUROPEAN TOURISM in 2015:
TRENDS & PROSPECTS
Quarterly Report (Q2/2015)
A quarterly insights report produced for the Market Intelligence Group
of the European Travel Commission (ETC)
by Tourism Economics (an Oxford Economics Company)
Brussels, July 2015
ETC Market Intelligence Report

European Tourism in 2015: Trends & Prospects (Q2/2015) 3
Copyright © 2015 European Travel Commission
European Tourism in 2015: Trends & Prospects (Q2/2015)
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not imply the expression of any opinions whatsoever on the part of the Executive
Unit of the European Travel Commission.
Data sources: This report includes data from the TourMIS database /
http://www.tourmis.info, STR Global, IATA, AEA and UNWTO.
Economic analysis and forecasts are provided by Tourism Economics and
are for interpretation by users according to their needs.
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ISSN No: 2034-9297
This report was compiled and edited by:
Tourism Economics (an Oxford Economics Company)
on behalf of the ETC Market Intelligence Group
Cover: Ruins of the ancient city of Kourion, Cyprus
Copyright belongs to Kirill__M
In memoriam Mr Tom Ylkänen

Foreword
Sustained growth for European tourism in 2015
 Growth remains solid at the beginning of the year
confirming the continued positive performance of
European destinations. Positive results before the
summer period are driven by increased demand
from both intra-regional and overseas markets.
These results confirm the sustained upward trend
estimated for 2015 and proves the on-going
efforts of destinations to fight seasonality.
 The vast majority of reporting ETC destinations
record increased numbers of international tourists
arriving in the first five months
1
compared to the
same period last year. Destinations registering a
substantial increase are Iceland (+30%),
Montenegro (+19%) and Romania (+16%). Other
destinations posting double-digit growth rates are
Ireland, Cyprus, and Slovenia accounting for a
+14%, +10% and +10% increase respectively.
 Amongst Europe’s most popular destinations
Germany (+5%), Spain (+4%), Italy (+4%) and the
UK (+3%) see handsome growth in international
arrivals, with the peak travel season yet to begin.
Among the top performers are also Balkan
countries, Croatia and Serbia, recording increased
number of arrivals by +14% and +10%
respectively at the end of April.
 Some destinations continue to feel the slowing of
Russian travel demand. Finland sees its
international tourist arrivals slump (-11%), being
strongly affected by dwindling numbers of Russian
holiday-makers. Arrivals in Baltic countries are
also consistently low in Latvia (+1%) and
Lithuania (-1%) whereas foreign arrivals in
Estonia (-9%) plunge dramatically suffering a
painful setback attributed to the Russia Effect in
Russian travel demand.
 Overall, European air traffic continues to grow in
2015 with Revenue Passenger Kilometres (RPK)
increasing by 5% as compared to the same period
last year and in spite of economic uncertainties
and recent disruption caused by striking air traffic
controllers in France, Spain and Germany.
Generally speaking, travel flows from and to
Europe are boosting momentum based on YTD
data.
1 Year-to-date data reported by individual destinations varies between January and
May.
International Traffic by Region of Airline registration
% change, year ago
Source: Compiled by UNWTO from IATA
Russia, Inbound travel by destination, YTD growth (top),
share of foreign arrivals (bottom)
Source: TourMIS
International Tourist Arrivals 2015
2015 YTD, % change year ago
Source: ETC based on TourMIS data

Growth momentum projected from largest long-haul market
 Outbound flows from the largest European source markets have gained momentum in
the first months in 2015 contributing to the resilience of the European tourism sector.
Although the Eurozone is still facing economic challenges and uncertainties, this does
not appear to suppose a drawback for travel-hungry citizens from Germany, the
Netherlands, France and Italy who are positively stimulating the tourism sector this
year. Moreover, travel from the United Kingdom is spurred by favourable exchange
rates in the continent. Long-haul markets appear to be faring even better contributing
significantly to growth in European tourism and with increased demand coming
especially from the USA and Asian markets.
 Economic indicators suggest a positive recovery in the USA in 2015 as the country
shows signs of a solid rebound supported by a stronger US dollar, higher disposable
income, an increase in power spending, and business and consumer confidence. As a
matter of fact, this dispersed concerns few months back when GDP fell sharply. In
addition, according to the World Economic Outlook report
2
, growth is expected to
reach 3.1% percent in 2015. Additionally, a weaker euro will keep posing an upturn in
long-haul travel demand from the USA. In the contrary, economic growth in China is
estimated to follow a more modest pace. Nevertheless, the Chinese travel outbound
market keeps showing signs of growth posting increasing results in European
destinations. Japan began the year gaining momentum owing to economic
improvements despite GDP contraction and a weaker yen. Notwithstanding, Europe
still remains an aspirational destinations for both Chinese and Japanese outbound
travellers.
 As expected, the Russian outbound travel market remains lower facing difficulties to
level off while the economy is still expected to suffer a deep backdrop this year. A
decrease in oil prices and the consequent plunge in the rouble against the euro are
expected to hit European tourism destinations in 2015 while international sanctions
have already affected on the tourist industry. Foreign travel has become costly for
Russian tourists with traditional hot-spot destinations being the most affected.
Besides, as the influx of tourists across borders declines so is the spending among
those that actually travel as their expenditure sharply plummeted by 6% in 2014
3
.
Fostering competitiveness at a pan-European level
 International tourism worldwide is experiencing growth primarily driven by the
performance of advanced economies and long-haul markets. The travel and tourism
sector still remains Europe’s main driver of growth under the cloud of socio-economic
disruptions. However, to ensure Europe’s leading position as the #1 tourist destination
worldwide amid a challenging and uncertain socio-economic environment, European
tourism organisations are called to foster sustainable product development and
promotion encouraging the diversity of products and experiences offered by the
destination at a pan-European level.
 “In order to remain the world’s first tourist destination, Europe must respond to shifting
patterns in global tourism capitalizing on the potential of tomorrow’s outbound travel
markets whose expanding middle-classes are a growing market for European
destinations”, said Eduardo Santander, Executive Director European Travel
Commission.
Jennifer Iduh (ETC Executive Unit)
With the contribution of the ETC Market Intelligence Group
2 World Economic Outlook Report www.imf.org/external/pubs/ft/weo/2015/01/pdf/text.pdf
3 UNWTO World Tourism Barometer, Volume 13, April 2015

2015 Tourism Performance Summary
The bulk of reporting countries have continued to welcome increasing numbers of
foreign visitors as well as foreign visitor nights according to data for the first four
months of 2015. A weaker than average euro continues to aid price attractiveness for
Eurozone destinations. A recent study by Tourism Economics estimates that the
dollar’s 2015 appreciation will result in European inbound arrivals being 1.1% higher
this year than would have been the case had the dollar retained its 2014 value.
Therefore, such currency movements have been significant in offsetting weakness
from Russian outbound travel, with European destinations now more affordable than
they were one year ago.
However, it should be noted that these year-to-date trends remain in their infancy,
covering what is low season for many destinations. As such, growth rates shown in
this section are not indicative of expected full year performance but rather serve to
highlight emerging trends.
Top performers in 2015 have changed little from those of 2014 with Iceland in
particular managing to sustain, for the third consecutive year, growth in foreign visits in
excess of 30% based on the first five months of 2015 compared to the same period in
2014. Montenegro has also grown steadily over the past number of years with growth
of 19.3% in foreign visits and growth of 18.1% in overnights based on data to April.
Along with Romania, Montenegro was one of only two reporting destinations which
saw growth in visits from Russia and the only country which saw growth in overnights
from Russia.
Slovakia, after enduring over a year of declining visitor numbers, has finally seen its
fortunes reversed, posting 3.6% growth in foreign visits. However, although of a much
smaller magnitude than has been observed in recent months, overnights fell by 1.2%.
Despite some concerns that Serbia might be overly reliant on Russian visitors, its
visitor base appears to be well spread with growth so far this year (to April) in excess
of 10% in terms of both foreign visits and foreign overnights. This bolsters Serbia’s
position amongst the many emerging tourism destinations within Europe, having seen
some strong growth in both visits and nights over the past number of years.
Switzerland’s tourism industry has paid the price for removing the Swiss franc’s peg to
the euro, a move designed to safeguard it from depreciation against the US dollar.
However, this means that a holiday to Switzerland is now relatively more expensive
when priced in euro terms. Visits to Switzerland fell by 0.1% in the first four months of
2015 compared to the same period in 2014, while overnights fell by 3%.
-10
-5
0
5
10
15
20
Iceland
Montenegro
Romania
Croatia
IrelandRep
Serbia
Slovenia
Cyprus
Hungary
Bulgaria
CzechRep
Austria
Malta
Germany
Poland
Netherlands
Spain
Italy
Slovakia
Latvia
Switzerland
Turkey
Lithuania
Estonia
Finland
Foreign visits to select destinations
2015, year-to-date*, % change year ago
Source: TourMIS *date varies (Jan-May) by destination
30.4
-12.1 -10
-5
0
5
10
15
20
Montenegro
Croatia
Serbia
Netherlands
Portugal
Norway
Sweden
Poland
Slovenia
Hungary
Germany
Austria
Denmark
Malta
CzechRep
Italy
Spain
Latvia
Luxembourg
Slovakia
Switzerland
Lithuania
Estonia
Finland
Foreign visitor nights in select destinations
-11

Estonia and Finland’s recent decline highlight the vulnerability of being overly reliant
on any one source market. However, since these countries tend to be popular winter
destinations for Russian tourists, arrivals will likely rebound as the summer months
offer an opportunity for these countries to capitalise on the weaker euro.
The possibility that Greece might be forced to leave the Eurozone remains a key risk,
with discussions between Greece and its creditors still ongoing at the time of writing.
Nevertheless, hotels data for Athens remains robust suggesting that some confidence
in the Greek economic growth remained during the first half of the year. We will
continue to monitor Greek performance closely in the coming weeks and months.
Country % ytd to month % ytd to month
Austria 6.3 Jan-May 4.0 Jan-May
Bulgaria 7.1 Jan-Apr
Croatia 13.5 Jan-May 14.7 Jan-May
Cyprus 9.6 Jan-May
Czech Rep 6.7 Jan-Mar 3.3 Jan-Feb
Denmark 3.5 Jan-Apr
Estonia -8.8 Jan-Apr -7.5 Jan-Apr
Finland -12.1 Jan-Apr -11.0 Jan-Apr
Germany 5.1 Jan-Apr 4.2 Jan-Apr
Greece
Hungary 9.6 Jan-Apr 5.8 Jan-Apr
Iceland 30.4 Jan-May
Ireland Rep 12.1 Jan-May
Italy 4.3 Jan-Mar 3.3 Jan-Mar
Latvia 1.0 Jan-Mar -0.1 Jan-Mar
Lithuania -0.9 Jan-Mar -4.3 Jan-Mar
Luxembourg -1.0 Jan-Apr
Malta 5.7 Jan-Apr 3.5 Jan-Apr
Montenegro 19.3 Jan-Apr 18.1 Jan-Apr
Netherlands 4.5 Jan-Mar 10.4 Jan-Mar
Norway 9.1 Jan-Apr
Poland 4.7 Jan-Mar 7.8 Jan-Mar
Portugal 9.2 Jan-Mar
Romania 16.0 Jan-Apr
Serbia 10.3 Jan-Apr 13.7 Jan-Apr
Slovakia 3.6 Jan-Mar -1.2 Jan-Mar
Slovenia 9.8 Jan-Apr 5.9 Jan-Apr
Spain 4.4 Jan-Apr 2.7 Jan-Apr
Sweden 8.1 Jan-Apr
Switzerland -0.1 Jan-Apr -3.0 Jan-Apr
Turkey -0.5 Jan-Apr
UK 3.0 Jan-Apr
Source: TourMIS, http://www.tourmis.info; available data as of 1.7.15
Measures used for nights and arrivals vary by country
See TourMIS for further data including absolute values.
Tourist Arrivals and Nights
2015 Performance, Year to Date
International Arrivals International Nights

Global Tourism Forecast Summary
Tourism Economics’ global travel forecasts are shown on an inbound and outbound
basis in the following table. These are the results of the Tourism Decision
Metrics (TDM) model, which is updated in detail three times per year. Forecasts are
consistent with Oxford Economics’ macroeconomic outlook according to estimated
relationships between tourism and the wider economy. Full origin-destination
country detail is available online to subscribers.
2013 2014 2015 2016 2017 2013 2014 2015 2016 2017
data/estimate/forecast *** d d e f f d d e f f
World 4.6% 4.4% 3.6% 4.3% 4.4% 4.5% 4.4% 3.6% 4.3% 4.7%
Americas 3.0% 8.1% 3.6% 3.6% 4.1% 2.7% 4.0% 4.7% 4.3% 4.1%
North America 3.4% 9.2% 3.4% 3.6% 4.3% 1.8% 3.7% 5.9% 4.7% 4.1%
Caribbean 2.1% 6.2% 2.5% 3.0% 3.8% -1.6% 4.7% 5.6% 6.5% 8.2%
Central & South America 2.7% 5.9% 4.8% 4.1% 3.7% 6.6% 4.6% 1.1% 2.3% 3.4%
Europe 4.8% 2.7% 2.5% 4.2% 3.7% 3.6% 2.5% 1.6% 4.0% 4.0%
ETC+3 4.4% 4.7% 3.7% 4.3% 3.2% 1.7% 3.8% 4.1% 4.7% 3.6%
EU 3.9% 4.7% 3.7% 4.2% 2.9% 1.1% 3.7% 4.1% 4.8% 3.6%
Non-EU 8.1% -3.8% -1.8% 4.3% 6.9% 11.4% -0.9% -5.6% 1.6% 5.1%
Northern 2.9% 3.5% 4.4% 4.1% 3.4% 1.3% 3.9% 4.6% 4.9% 3.4%
Western 2.5% 1.9% 3.4% 3.9% 2.0% 1.4% 4.1% 3.4% 4.5% 3.5%
Southern/Mediterranean 6.4% 7.2% 4.2% 4.8% 4.0% 0.7% 6.4% 2.8% 3.0% 2.3%
Central/Eastern 6.3% -3.6% -2.7% 3.4% 5.9% 9.3% -1.8% -2.8% 3.4% 6.1%
- Central & Baltic 4.7% 6.5% 2.4% 3.8% 3.8% 5.1% 0.2% 6.3% 6.5% 5.6%
Asia & the Pacific 6.5% 5.6% 5.6% 5.0% 5.8% 7.1% 6.7% 4.9% 4.4% 5.7%
North East 3.5% 7.3% 5.7% 4.7% 6.6% 6.9% 7.9% 5.1% 4.2% 5.7%
South East 11.3% 2.7% 5.4% 5.4% 5.0% 8.9% 1.4% 5.8% 4.7% 5.3%
South 7.7% 9.5% 6.8% 4.0% 6.1% 4.4% 15.5% 3.3% 5.7% 5.9%
Oceania 4.0% 6.2% 3.8% 5.4% 4.1% 5.3% 4.3% -0.8% 5.3% 8.0%
Africa 0.4% 2.2% 4.9% 4.3% 3.6% 3.3% 3.3% 5.3% 3.9% 3.7%
Mid East 3.5% 7.8% 4.7% 5.1% 5.3% 2.9% 8.3% 7.6% 6.3% 6.2%
* Inbound is based on the sum of the country overnight tourist arrivals and includes intra-regional flows
** Outbound is based on the sum of visits to all destinations
Note: world inbound and outbound do not match exactly in historic data or forecast. This is due to visits to multiple destinations.
For example, one outbound trip may be to more than one destination. Some sample error may also be evident in historic data.
*** d - data reported by national statistical agencies are available for all years to 2014
e - 2015 estimated using all available year-to-date data, and forecasts for the rest of the year
f - forecasts according to Tourism Economics' global economic and tourism forecast models
ETC+3 = ETC members plus France, Netherlands, and UK
EU = Austria, Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Greece, Germany, Hungary,
Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia,
Slovenia, Spain, Sw eden, UK
Non-EU Europe is all European countries (listed below ) outside EU
Northern Europe = Denmark, Finland, Iceland, Ireland, Norw ay, Sw eden, UK
Western Europe = Austria, Belgium, France, Germany, Luxembourg, Netherlands, Sw itzerland
Southern/Mediterranean Europe = Albania, Bosnia-Herzegovina, Croatia, Cyprus, FYR Macedonia, Greece, Italy, Malta,
Central/Eastern Europe = Armenia, Azerbaijan, Bulgaria, Czech Republic, Estonia, Hungary, Kazakhstan, Kyrgyzstan, Latvia,
Lithuania, Poland, Romania, Russian Federation, Slovakia, Ukraine
of w hich
Central Europe & Baltic countries = Bulgaria, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia
TDM Visitor Growth Forecasts, % change
Outbound**Inbound*

Recent Industry Performance
Air Transport
Revenue Passenger Kilometers continue to
grow steadily in 2015 with growth of 6.3% to
April compared to the same period of 2014.
There is little indication that such growth will
cease anytime soon.
All regions have contributed to this growth with
the exception of Africa which has dragged on
World growth in each of the four months of this
year. Lower oil prices are still the prime culprit
with African producers hostage to a higher
breakeven price per barrel of oil produced,
which in turn has dampened outbound travel
demand. The ongoing terror threat exemplified
by recent events in Tunisia has many
countries on high alert, as well as some
lingering ebola concerns, may still be deterring
some inbound travel.
Asia/Pacific enjoyed a boost in March
potentially linked to a post-Lunar New Year
pick-up, and the region has enjoyed 8.7%
growth so far this year. However, there has
been a notable weakening in regional trade in
recent months, which has, and will continue to
stifle some business-related travel.
Travel to and from Europe maintains its
momentum according to year-to-date data to
April, growing by 4.8% compared to the same
period in 2014. Moreover, this upward trend is
likely to continue despite some downward
pressures on economic progress due to
firming in the euro as well as oil prices.
For North American carriers, although RPK
grew by 2.4% YTD to April, the stronger US
dollar will have dragged on inbound travel
growth to the reigon.
Strong industry growth a positive sign
 RPK continues to grow smoothly
 Last-minute cancellations of planned strike action mean only minor disruption
was caused by industry protestors
 A strong dollar helps boost travel growth between Europe and the Americas
which continues to outpace total European air passenger traffic growth
 European hotel performance is broadly positive across all measures.
-5
0
5
10
15
Africa Asia/Pacific Europe Latin
America
Mid.East N.America World
Jan-15 Feb-15 Mar-15 Apr-15
% year
Source: IATA
Monthly international air passenger growth
-5
0
5
10
15
Africa Asia/Pacific Europe Latin
America
Mid.East N.America World
2013 2014 2015 ytd
% year, RPK
Source: IATA
Annual international air passenger growth
-12
-9
-6
-3
0
3
6
9
12
15
18
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Total
3mth mav
Source: IATA
Icelandic Ash
Cloud Impact
International air passenger traffic growth
% year, Revenue Passenger Kilometers

Data from the Association of European Airlines (AEA) shows lower European airline
capacity for much of the beginning of 2015 compared to 2014. However this gap
closed towards the end of Q2 where a continuation of the current trend would suggest
European airlines will be operating with greater capacity than at the same time in
2014. Although oil prices have largely stabilised after a lengthy period of decline, with
data suggesting that next to none of the lower world oil prices was passed onto the
consumer, this should have no bearing on demand. Airlines were reluctant to increase
their capacity in line with demand in order to keep prices high. Strike action lasting 48
hours taken by French air traffic controllers in relation to changes to the age of
retirement caused some disruption, with a small contraction in airline capacity
observed at the beginning of Q2. Passenger load factor (PLF) appears to be following
a broadly similar pattern as in 2013 and 2014, with the exception of the strike
disruption.
Travel between Europe and Asia increased at a faster rate than total European airline
passenger growth throughout most of 2014, but slowed later in the year and into 2015
in line with slowing Chinese consumer spending. Long haul travel from Asian markets
is likely to grow in line with economic trends in the region, which is to pick up from the
slower pace of growth observed in recent months. On the whole, air passenger traffic
between Europe and the Americas continued to grow at a faster rate than total
scheduled travel to and from Europe in 2015 to date. United States outbound travel to
Europe is likely to be particularly strong, driven by the appreciation of the dollar
against most key currencies – and notably against the euro – as well as by favourable
economic conditions in the United States. Recent analysis by Tourism Economics
estimates that the dollar’s recent appreciation will result in European inbound arrivals
being 1.1% higher in 2015 than they would have been had the dollar retained its 2014
value. This highlights the significance of air passenger flows between these two
regions.
60
65
70
75
80
85
90
Q1 Q2 Q3 Q4
2013 2014 2015
Weekly load factor, %
Source: AEA
European airlines passenger load factor
-5
0
5
10
Q1 Q2 Q3 Q4
2013 2014 2015
ASK, 4 week moving average, % change year ago
Source: AEA
European airlines capacity
-4
-2
0
2
4
6
8
10
12
14
2012Q1
2012Q2
2012Q3
2012Q4
2013Q1
2013Q2
2013Q3
2013Q4
2014Q1
2014Q2
2014Q3
2014Q4
2015Q1
2015Q2
Americas Total
RPK, 4 week moving average, % change year ago
RPK = revenue passenger kmsSource: AEA
European airline passenger traffic: Americas
-4
-2
0
2
4
6
8
10
12
14
2012Q1
2012Q2
2012Q3
2012Q4
2013Q1
2013Q2
2013Q3
2013Q4
2014Q1
2014Q2
2014Q3
2014Q4
2015Q1
2015Q2
Asia Total
RPK, 4 week moving average, % change year ago
RPK = revenue passenger kmsSource: AEA
European airline passenger traffic: Asia

Accommodation
Occupancy rates grew across all regions of the World based on data to May
compared to the same period in 2014. Occupancy rates in Europe saw the greatest
gains, up 2.3% compared to the first four months of 2014. In the Americas, occupancy
rates were 2% higher than in the same period in 2014. In the Middle East/Africa and
Asia/Pacific, occupancy rates increased by 1%, and 0.4% respectively. When
denominated in US dollar terms, monetary performance measures were much more
varied. Asia/Pacific and the Middle East/Africa, both average daily rate (ADR) and
revenue per available room (RevPAR) fell. In the case of Asia/Pacific these fell by
6.3% and 5.9% respectively and in the Middle East/Africa by 2.7% and 1.7%
respectively. However, if denominated in euro terms, these same measures were
comfortably positive, reflecting the vast gains made by the US dollar on foreign
exchange markets and the added relative expense incurred by a Eurozone traveller
wishing to go beyond the Eurozone.
Asia/Pacific Americas Europe Middle
East/Africa
-10
-5
0
5
10
15
20 Occ ADR* RevPAR*
Global Hotel Performance, Jan-May 2015
% change year ago
Source: STR Global * ADR and RevPAR denominated in US$ except for Europe

Key Source Market Performance
Trends discussed in this section relate to the first five months of the year, although actual
coverage varies by destination; for the majority of countries March or April will be the latest
available data point.
Further detailed monthly data for origin and destination, including absolute values, can be
obtained from TourMIS, http://tourmis.info.
Key intra-European markets
Montenegro is now the top European destination in the eyes of the German traveller,
reportedly receiving 49.9% more foreign visits in the first four months of 2015 than it
did during the same period of 2014. Overnight visits from Germany grew by 73.2%.
Still in its low season, Montenegro looks well placed to see even more growth from
Germany as high season air corridors continue to open and operate at higher
frequencies.
Croatia has also seen a large increase in the number of German visitors it received,
and should be well placed to maintain momentum into the summer months for the
same reasons as Montenegro.
German interest in Bulgaria, Hungary, and Switzerland has waned as the year has
progressed. Interestingly, none of the three are in the European monetary union,
suggesting that the decline in interest is economically motivated more than anything
else as these destinations have lost some competitiveness.
This is particularly clear in the case of Switzerland which is one of the more costly
European countries to live and holiday in. Latest data suggests a revival of interest in
its Eurozone neighbours as the relative weakness of the euro will have made trips to
non-Eurozone countries less viable than they were this time last year.
Mostly a picture of growth
 European travel demand continues to grow across the majority of markets
 Falling oil prices and a weaker euro have mostly had a positive impact
 Russian economy has shown some signs of improvement with exports helping
to stabilise the falling rouble, but this has yet to boost outbound tourism with
almost all countries reporting falls
 A strong US and Canadian dollar, and a weaker euro have boosted long-haul
travel demand
-10
-5
0
5
10
15
20
25
30
Montenegro
Croatia
Iceland
Cyprus
Latvia
CzechRep
Netherlands
Poland
Estonia
Finland
Slovakia
Malta
Austria
Turkey
Slovenia
Romania
Lithuania
Spain
Serbia
Italy
Hungary
Bulgaria
Switzerland
Visits from Germany to select destinations
35.4
39.9
49.9
-10
-5
0
5
10
15
20
25
30
Montenegro
Croatia
Latvia
Netherlands
CzechRep
Serbia
Portugal
Luxembourg
Poland
Malta
Finland
Slovakia
Austria
Denmark
Lithuania
Sweden
Estonia
Norway
Italy
Slovenia
Spain
Hungary
Switzerland
German visitor nights in select destinations
46.5
73.2 34.3

Latvia and Estonia have enjoyed large gains in the number of visits and overnights
from Netherlands, aided by an ever increasing air network linking Western and
Northern Europe and eastern European countries. Other emerging European
destinations such as Slovenia, Iceland, and Croatia also saw gains in Dutch visits and
overnights. The southern climes of Cyprus and Italy have also gained increased
interest from the Netherlands so far in 2015 (based on data to May and March
respectively) with visits growth of 21.8% and 40.7%.
Similar to German sentiment, Switzerland has lost out on some visitors from the
Netherlands, likely linked to the decision at the beginning of the year the Swiss
National Bank made the decision to abandon its three year old cap against the euro.
Interestingly, it was economic and political instability in the Eurozone in 2011 which
prompted the move to impose the cap. Three years later, similar economic and
political instability surrounded the reversal of that decision.
Many European destinations have seen the number of visits received from France
grow markedly so far this year. Chief recipients of this growth were largely emerging
destinations such as Lithuania, Iceland, Latvia, Montenegro, and Serbia but the
French continue to show increasing interest in some of Europe’s more mature
destinations such as Cyprus, Portugal, and Spain.
Turkey endured substantial losses in terms of the number of French visitors it
received: in the first four months of 2015 it welcomed 21.1% less visitors than in the
same period of 2014. Switzerland once again finds itself losing visits from a large
European source market with visits having fallen by 7.3% and overnights by 7.2%.
Combined with losses from elsewhere, Switzerland looks unlikely to end the year with
a net gain in visitor numbers compared to 2014. Denmark is also experiencing lower
French demand and euro weakness is likely the root cause of falling French visitors
numbers across the majority of affected countries.
-20
-15
-10
-5
0
5
10
15
20
Cyprus
Latvia
Italy
Estonia
Poland
Iceland
CzechRep
Lithuania
Slovenia
Slovakia
Austria
Germany
Romania
Bulgaria
Finland
Croatia
Malta
Spain
Switzerland
Hungary
Montenegro
Serbia
Turkey
Visits from Netherlands to select destinations
40.7
36.7
21.8
-20
-15
-10
-5
0
5
10
15
20
Latvia
Italy
Estonia
CzechRep
Slovenia
Sweden
Poland
Norway
Luxembourg
Portugal
Austria
Slovakia
Germany
Serbia
Malta
Finland
Croatia
Lithuania
Switzerland
Spain
Hungary
Montenegro
Denmark
Netherlands nights in select destinations
-25
37
-20.2
30.3
35.2 20.7
-21.3
-10
-5
0
5
10
15
20
25
30
Lithuania
Cyprus
Iceland
Latvia
Montenegro
Estonia
Serbia
Finland
Malta
Bulgaria
Hungary
Poland
Slovakia
Romania
Spain
Germany
CzechRep
Netherlands
Italy
Austria
Croatia
Slovenia
Switzerland
Turkey
Visits from France to select destinations
47.1
44.7
36.5
32.8
-21.1
-10
-5
0
5
10
15
20
25
30
Lithuania
Serbia
Norway
Portugal
Estonia
Latvia
Malta
Poland
Spain
Hungary
CzechRep
Finland
Netherlands
Sweden
Germany
Slovakia
Italy
Montenegro
Austria
Croatia
Denmark
Luxembourg
Switzerland
Slovenia
French visitor nights in select destinations
41.8

Lithuania had a larger number of Italian visitors pass through its borders in the first
three months of 2015 compared to the same period last year. Ireland has also fared
well, receiving 36.2% more Italian visitors to March compared to the same period in
2014. At least some proportion of these additional visits was displaced travel
otherwise destined for the UK had euro weakness not made Ireland the more
appealing option. The weaker euro has also paved the way for other, less expensive,
non-Eurozone destinations such as Poland and Czech Republic to gain share at the
expense of other, more expensive, non-Eurozone destinations such as Switzerland
and Denmark.
The relative strength of British pound against the euro has made the Eurozone a more
appealing destination for the British visitor. Only Switzerland, which is not a member of
the European monetary union, reported falling visits from the UK and only a minority of
countries reported falls in the number overnights.
It was Baltic and Eastern European destinations which proved most popular with
Latvia, Slovakia, and Lithuania all enjoying growth in British visitor numbers in excess
of 40%. Montenegro and Romania also gained share, receiving 36.7% and 21.2%
more visits in the first four months of 2015 compared to 2014 respectively.
-20
-15
-10
-5
0
5
10
15
20
Lithuania
Iceland
Slovakia
Poland
Estonia
Latvia
Bulgaria
Romania
Malta
Hungary
Spain
Finland
Montenegro
Slovenia
CzechRep
Germany
Austria
Croatia
Netherlands
Serbia
Switzerland
Cyprus
Turkey
Visits from Italy to select destinations
37.7
36.2
35
-20
-15
-10
-5
0
5
10
15
20
Lithuania
Portugal
Malta
Poland
Estonia
Spain
CzechRep
Slovakia
Hungary
Finland
Latvia
Slovenia
Netherlands
Montenegro
Sweden
Serbia
Germany
Austria
Croatia
Luxembourg
Switzerland
Denmark
Italian visitor nights in select destinations
118 30.5
23.226
24 20.2
37.4
-10
0
10
20
30
40
50
Lithuania
Slovakia
Latvia
Hungary
Montenegro
Estonia
Norway
CzechRep
Netherlands
Sweden
Denmark
Poland
Slovenia
Germany
Austria
Portugal
Croatia
Luxembourg
Finland
Malta
Spain
Switzerland
Serbia
Italy
British visitor nights in select destinations
68
52.7
-10
0
10
20
30
40
50
Latvia
Slovakia
Lithuania
Montenegro
Hungary
Iceland
Romania
Cyprus
Estonia
Bulgaria
CzechRep
Italy
Slovenia
IrelandRep
Austria
Germany
Spain
Netherlands
Malta
Poland
Croatia
Turkey
Finland
Serbia
Switzerland
Visits from UK to select destinations

The recent announcement that EU foreign ministers have extended economic
sanctions against Russia until the end of January 2016 as well as latest trends point to
further falls in Russian travel demand.
All but two reporting destinations have recorded falling arrivals from Russia and all but
one has recorded falling nights – including some traditional Russian holiday hotspots
such as Turkey and Estonia.
These large falls partly reflect the impact of falling oil prices on Russian aggregate
income as well as other political and economic uncertainties which caused the rouble
to depreciate markedly (over the better part of a year) making foreign travel relatively
more expensive for the Russian traveller. Since January, however, the rouble has
seen something of a rebound and with oil prices now relatively stable, although at a
much lower level than one year ago, the economy appears to be on a slightly firmer
footing. However, current economic and tourism demand remains well below levels
experienced in early 2014 and all indicators still point to a deep recession in Russia
this year. An eventual recovery in tourism demand is possible towards the end of the
year albeit from a very low base.
Montenegro was one of only two reporting destinations which saw visits from Russia
grow by 2.4% and overnights by 5% in the first four months of 2015 compared to the
same period in 2014.
Romania – the only other country to see visits growth from Russia – has been one of
the most forthright backers of EU sanctions and has urged both NATO and the United
States to step-up military presence. Interestingly, however, this seems not to have
deterred Russians from visiting with numbers up 2.2% to April compared to the same
period in 2014.
Greek-Russian relations may yield some benefits for Greece in 2015 as the new
government begins to forge alliances beyond the EU and through its lax imposition of
Western-led sanctions against Russia, arguably preparing for the worst in terms of its
future as an EU member state.
Because the Russia-Ukraine crisis began in mid-March 2014, we are still comparing
post-crisis data with mostly pre-crisis data and these falls should become less
substantial once the annual comparison is based on a post-crisis period.
-60
-50
-40
-30
-20
-10
0
10
Montenegro
Romania
Serbia
Croatia
Italy
Cyprus
Slovenia
Spain
Turkey
Bulgaria
Germany
Hungary
Switzerland
Austria
Iceland
Netherlands
Lithuania
Slovakia
Latvia
Estonia
CzechRep
Finland
Poland
Malta
Visits from Russia to select destinations
-60
-50
-40
-30
-20
-10
0
10
Montenegro
Luxembourg
Serbia
Croatia
Italy
Norway
Spain
Switzerland
Germany
Netherlands
Portugal
Sweden
Hungary
Austria
Denmark
Slovenia
Lithuania
Latvia
Estonia
CzechRep
Slovakia
Finland
Poland
Malta
Russian visitor nights in select destinations

Non-European markets
Latest data show that travel to Europe from the US was positive in all but a few
reporting destinations. The US economy continues to strengthen according to the
latest economic data with an upswing in consumer spending through jobs and wage
growth. There remains scope for growth in outbound travel particularly in terms of long
haul travel, helped by appreciation in the dollar against key currencies such as the
euro.
Latvia and Iceland enjoyed particularly strong visits growth from the US by 45.4% and
42.4% respectively, based on data to March and May. Many other European
destinations, both emerging and mature, have seen arrivals from the US grow as the
stronger dollar and favourable economic conditions make travel to these destinations
more viable than they would have been as recently as a year ago.
However, some destinations saw arrivals fall – most notably Malta and Cyprus which
received 10.8% and 33.4% less visits from the US respectively.
Data pertaining to Japanese visitors suggests an appetite for emerging, particularly
Eastern European destinations such as Latvia, Estonia, Poland, and Lithuania, all of
which posted visits growth of 29% or more.
Visits and overnights from Japan suggest that the export-led policies of the Bank of
Japan have not affected travel behaviour as much as initially feared in spite of lower
spending power in international markets from the weaker yen. The number of
European countries that reported a growing number of arrivals from Japan versus
falling arrivals continues to grow.
-20
-10
0
10
20
30
40
Latvia
Iceland
Serbia
Estonia
Hungary
Montenegro
Lithuania
Romania
Slovakia
Croatia
CzechRep
Slovenia
Spain
Bulgaria
Turkey
Austria
Finland
Switzerland
Poland
Germany
Italy
Netherlands
Malta
Cyprus
Visits from US to select destinations
42.4
45.4
-33.4
-20
-10
0
10
20
30
40
Montenegro
Latvia
Serbia
Croatia
Hungary
Luxembourg
Slovenia
CzechRep
Slovakia
Spain
Denmark
Portugal
Austria
Switzerland
Germany
Poland
Finland
Norway
Netherlands
Italy
Sweden
Malta
Lithuania
US visitor nights in select destinations
66.1
-24.5
57.1
-30
-20
-10
0
10
20
30
40
Cyprus
Latvia
Estonia
Poland
Italy
Lithuania
Spain
Slovenia
Iceland
Croatia
Austria
Germany
Slovakia
Hungary
CzechRep
Switzerland
Finland
Serbia
Netherlands
Bulgaria
Turkey
Montenegro
Visits from Japan to select destinations
57.3
46.4
-64.5
58.1
106
-30
-20
-10
0
10
20
30
40
Italy
Estonia
Spain
Slovenia
Poland
Latvia
Lithuania
Croatia
Slovakia
Norway
Germany
Austria
Luxembourg
Sweden
Hungary
CzechRep
Netherlands
Denmark
Switzerland
Finland
Portugal
Serbia
Montenegro
Japanese visitor nights in select destinations
58.4
46.2
44.4
-52.7

Outbound travel from China continues to gain momentum as 2015 progresses in
terms of both visits and overnights with double digit growth observed in all but a
handful of destinations. This is positive amid concerns of a slowdown in the Chinese
economy and industrial activity and both consumer surveys and retail sales data
remain robust. Travel to Europe as a whole was estimated to have grown by over 17%
in 2014 as a whole – the fifth consecutive year of growth. However, given the relatively
small volumes, travel from China to Europe should not be overvalued, accounting for
just 1.5% of European arrivals in 2014.
As with China, arrivals growth from India was positive in the majority of European
destinations for which there was data, and in many cases double digit growth was
reported. Croatia has seen the highest rate of growth relative to the comparable period
in 2014 enjoying overnights growth of 96.5% based on data to May. Montenegro,
according to data to April, has seen overnight arrivals from India grow by 28.4%,
which, while impressive, falls far short of the triple digit growth (161%) observed
earlier in the year. At the same time visits from India decreased (by 37.7%) indicating
that although less are coming, those that do are staying sufficiently long enough to
offset the fall in visits.
Indian arrivals still represent a relatively small proportion of total European arrivals and
some volatility should be expected but with limited impact on overall destination
performance. In the longer-term, growth prospects remain strong with potential
economic reform. Given these positive economic trends, there is clear potential for
India to catch-up with China as an emerging source market.
-30
-20
-10
0
10
20
30
40
50
Croatia
Spain
Hungary
CzechRep
Austria
Finland
Germany
Latvia
Bulgaria
Switzerland
Turkey
Poland
Italy
Slovakia
Netherlands
Montenegro
Visits from India to select destinations
79.2
-37.7
77.7
-30
-20
-10
0
10
20
30
40
50
Croatia
Hungary
Spain
CzechRep
Latvia
Austria
Montenegro
Poland
Denmark
Finland
Germany
Netherlands
Slovakia
Switzerland
Sweden
Italy
Indian visitor nights in select destinations
96.5 63.4
-10
0
10
20
30
40
50
60
70
80
90
100
Cyprus
Serbia
Slovakia
Iceland
Croatia
Spain
Slovenia
Turkey
Austria
Latvia
Italy
Switzerland
Germany
Lithuania
Romania
Finland
CzechRep
Netherlands
Hungary
Poland
Estonia
Montenegro
Bulgaria
Visits from China to select destinations
145
-10
0
10
20
30
40
50
60
70
80
90
100
Lithuania
Norway
Serbia
Slovakia
Croatia
Slovenia
Denmark
Austria
Finland
Italy
Switzerland
Poland
Estonia
Hungary
CzechRep
Germany
Latvia
Spain
Luxembourg
Sweden
Montenegro
Netherlands
Chinese visitor nights in select destinations
176.8

Some promising growth from Canada has been reported by the majority of reporting
destinations, many of which have seen visits and overnights from Canada grow by
double digit figures. Falling World oil prices caused the Canadian dollar to depreciate
against its US counterpart, making US holidays less appealing. At the same time, the
Canadian dollar appreciated against the euro, making European destinations more
attractive.
Lithuania, Serbia, and Spain were some of the destinations to benefit from these
currency movements with visitor numbers growing by 60.8%, 34.6%, and 29.4%,
respectively. Many other destinations reported strong, double-digit growth rates,
including some large developed markets, indicating the benefit of the increased price
attractiveness.
-30
-20
-10
0
10
20
30
Lithuania
Serbia
Spain
Latvia
Italy
Slovenia
Croatia
Slovakia
Turkey
Hungary
Poland
CzechRep
Romania
Iceland
Bulgaria
Netherlands
Germany
Switzerland
Austria
Montenegro
Finland
Cyprus
Visits from Canada to select destinations
60.8
34.6
-51.0
-30
-20
-10
0
10
20
30
Serbia
Slovenia
Spain
Montenegro
Portugal
Latvia
Croatia
Slovakia
Poland
Lithuania
Netherlands
Hungary
Italy
Switzerland
Germany
CzechRep
Denmark
Austria
Finland
Sweden
Canadian visitor nights in select destinations
61.8
42.4
38.9
32.1
-39.5

Origin Market Share Analysis
Based on the Tourism Decision Metrics (TDM) model, the following charts and
analysis show Europe’s evolving market position – in absolute and percentage terms –
for selected source markets. 2015 values are year-to-date estimates based on the
latest available data and are not final reported numbers.
United States
Methodology note:
Data in these charts and tables relate to reported arrivals
in all destinations as a comparable measure of outbound
travel for calculation of market share.
For example, US outbound figures featured in the
analysis is larger than reported departures in national
statistics as long-haul trips often involve travel to multiple
destinations; in 2014 US data reporting shows 11.9m
departures to Europe while the sum of European arrivals
from the US was 23.4m. Thus each US trip to Europe
involved a visit to two destinations on average.
Note: this analysis is based on the Tourism Decision Metrics
(TDM) model. The geographies of Europe are defined as:
Northern Europe: Denmark, Finland, Iceland, Ireland,
Norway, Sweden, UK
Western Europe: Austria, Belgium, France, Germany,
Luxembourg, Netherlands, Switzerland
Southern/Mediterranean Europe: Albania, Bosnia-
Herzegovina, Croatia, Cyprus, FYR Macedonia, Greece, Italy,
Malta, Montenegro, Portugal, Serbia, Slovenia, Spain, Turkey
Central/Eastern Europe: Armenia, Azerbaijan, Bulgaria,
Czech Republic, Estonia, Hungary, Kazakhstan, Kyrgyzstan,
Latvia, Lithuania, Poland, Romania, Russian Federation,
Slovakia, Ukraine
Level* Share
Annual
average
Cumulative
growth**
Share
2020
Cumulative
growth**
Share
2010
Total outbound travel (000s) 95,788 - 4.1% 22.2% - 26.1% -
of which:
Long haul (000s) 58,750 61.3% 5.0% 27.7% 64.1% 28.6% 60.1%
Short haul (000s) 37,039 38.7% 2.6% 13.4% 35.9% 22.3% 39.9%
Travel to Europe***
Europe (000s) 25,560 26.7% 4.5% 24.8% 27.3% 31.8% 25.5%
Northern Europe (000s) 5,887 6.1% 6.0% 34.1% 6.7% 29.2% 6.0%
Western Europe (000s) 9,573 10.0% 3.5% 18.8% 9.7% 27.4% 9.9%
Southern Europe (000s) 6,569 6.9% 3.8% 20.5% 6.8% 34.5% 6.4%
Central/Eastern Europe (000s) 3,531 3.7% 5.9% 33.5% 4.0% 44.6% 3.2%
US Market Share Summary
2015 Growth (2015-20) Growth (2010-15)
* Levels are in 000s unless otherwise specified
*** Shares are expressed as a % of total outbound travel
** Shows cumulative change over the relevant time period indicated
0
10
20
30
40
50
60
70
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
US long haul* outbound travel Rest of Long Haul
Central/Eastern Europe
Southern Europe
Western Europe
Northern Europe
Million
*Long haul defined as tourist arrivals to destinations outside North America
Source: Tourism Economics
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Europe's share of US market
Northern Europe
Western Europe
Southern Europe
% of long haul* market

0
2
4
6
8
10
12
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Canada long haul* outbound travel Rest of Long Haul
Southern Europe
Western Europe
Northern Europe
Million
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Europe's share of Canadian market Northern Europe
Western Europe
Southern Europe
Canada
Norway, Sweden, UK
Slovakia, Ukraine
Methodology note:
Level* Share
Annual
average
Cumulative
growth**
Share
2020
Cumulative
growth**
Share
2010
of which:
Long haul (000s) 11,329 31.7% 4.7% 26.0% 32.3% 9.2% 33.3%
Short haul (000s) 24,446 68.3% 4.1% 22.4% 67.7% 17.7% 66.7%
Travel to Europe***
Europe (000s) 4,301 12.0% 2.5% 13.1% 11.0% 9.1% 12.7%
Northern Europe (000s) 986 2.8% 5.6% 31.5% 2.9% 12.9% 2.8%
Western Europe (000s) 1,547 4.3% 1.4% 7.0% 3.7% -3.5% 5.1%
Central/Eastern Europe (000s) 187 0.5% 5.6% 31.6% 0.6% -27.0% 0.8%
2015 Growth (2015-20) Growth (2010-15)
Canada Market Share Summary

Mexico
Norway, Sweden, UK
Slovakia, Ukraine
Methodology note:
Level* Share
Annual
average
Cumulative
growth**
Share
2020
Cumulative
growth**
Share
2010
of which:
Long haul (000s) 2,393 11.8% 4.6% 25.1% 11.4% 44.6% 10.8%
Short haul (000s) 17,873 88.2% 5.5% 30.7% 88.6% 31.5% 89.2%
Travel to Europe***
Europe (000s) 1,254 6.2% 2.6% 13.9% 5.4% 46.8% 5.6%
Western Europe (000s) 577 2.8% 3.3% 17.9% 2.6% 36.4% 2.8%
Southern Europe (000s) 445 2.2% 0.7% 3.6% 1.8% 57.9% 1.8%
Central/Eastern Europe (000s) 132 0.7% 4.3% 23.3% 0.6% 61.2% 0.5%
Mexico Market Share Summary
2015 Growth (2015-20) Growth (2010-15)
0.0
0.5
1.0
1.5
2.0
2.5
3.0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Mexico long haul* outbound travel Rest of Long Haul
Southern Europe
Western Europe
Northern Europe
Million
0%
5%
10%
15%
20%
25%
30%
35% 2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Europe's share of Mexican market
Northern Europe
Western Europe
Southern Europe

Argentina
Norway, Sweden, UK
Slovakia, Ukraine
Methodology note:
Level* Share
Annual
average
Cumulative
growth**
Share
2020
Cumulative
growth**
Share
2010
of which:
Long haul (000s) 2,235 29.0% 4.0% 21.6% 29.3% 33.5% 28.5%
Short haul (000s) 5,468 71.0% 3.7% 19.9% 70.7% 30.2% 71.5%
Travel to Europe***
Europe (000s) 822 10.7% 4.1% 22.2% 10.8% 38.0% 10.1%
Western Europe (000s) 45 0.6% 4.3% 23.6% 0.6% 41.2% 0.5%
2015 Growth (2015-20) Growth (2010-15)
Argentina Market Share Summary
0.0
0.5
1.0
1.5
2.0
2.5
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Argentina long haul* outbound travel Rest of Long Haul
Southern Europe
Western Europe
Northern Europe
Million
*Long haul defined as tourist arrivals to destinations outside South America
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Europe's share of Argentinean market
Northern Europe
Western Europe
Southern Europe

Brazil
Norway, Sweden, UK
Slovakia, Ukraine
Methodology note:
Level* Share
Annual
average
Cumulative
growth**
Share
2020
Cumulative
growth**
Share
2010
of which:
Long haul (000s) 6,794 71.0% 4.2% 22.8% 70.8% 52.2% 66.6%
Short haul (000s) 2,777 29.0% 4.4% 23.8% 29.2% 23.8% 33.4%
Travel to Europe***
Europe (000s) 3,298 34.5% 1.2% 6.2% 29.7% 39.3% 35.3%
Western Europe (000s) 1,542 16.1% 0.6% 3.0% 13.5% 43.1% 16.1%
Southern Europe (000s) 1,202 12.6% -0.7% -3.3% 9.9% 32.2% 13.6%
Brazil Market Share Summary
2015 Growth (2015-20) Growth (2010-15)
0
1
2
3
4
5
6
7
8
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Brazil long haul* outbound travel Rest of Long Haul
Southern Europe
Western Europe
Northern Europe
Million
0%
5%
10%
15%
20%
25%
30%
35%
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Europe's share of Brazilian market
Northern Europe
Western Europe
Southern Europe

India
Norway, Sweden, UK
Slovakia, Ukraine
Methodology note:
Level* Share
Annual
average
Cumulative
growth**
Share
2020
Cumulative
growth**
Share
2010
of which:
Long haul (000s) 13,105 94.5% 5.7% 32.2% 94.1% 39.2% 96.2%
Short haul (000s) 765 5.5% 7.2% 41.4% 5.9% 106.7% 3.8%
Travel to Europe***
Europe (000s) 2,064 14.9% 6.2% 34.9% 15.1% 41.1% 15.0%
Western Europe (000s) 731 5.3% 6.4% 36.4% 5.4% 47.5% 5.1%
India Market Share Summary
2015 Growth (2015-20) Growth (2010-15)
0
2
4
6
8
10
12
14
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
India long haul* outbound travel Rest of Long Haul
Southern Europe
Western Europe
Northern Europe
Million
*Long haul defined as tourist arrivals to destinations outside South Asia
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Europe's share of Indian market
Northern Europe
Western Europe
Southern Europe
*Long haul defined as tourist arrivals to destinations outside South Asia

China
Norway, Sweden, UK
Slovakia, Ukraine
Methodology note:
Note Chinese outbound shown here is smaller than
reported departures in national statistics as the latter
includes same day visits to Hong Kong and Macau.
Level* Share
Annual
average
Cumulative
growth**
Share
2020
Cumulative
growth**
Share
2010
of which:
Long haul (000s) 29,552 41.9% 4.6% 25.3% 43.9% 154.0% 33.0%
Short haul (000s) 41,051 58.1% 2.8% 15.0% 56.1% 73.8% 67.0%
Travel to Europe***
Europe (000s) 9,645 13.7% 4.6% 25.5% 14.4% 138.5% 11.5%
Western Europe (000s) 5,448 7.7% 4.0% 21.6% 7.9% 176.7% 5.6%
Growth (2015-20) Growth (2010-15)
China Market Share Summary
2015
0
5
10
15
20
25
30
35
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
China long haul* outbound travel Rest of Long Haul
Southern Europe
Western Europe
Northern Europe
Million
*Long haul defined as tourist arrivals to destinations outside Northeast Asia
0%
5%
10%
15%
20%
25%
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Europe's share of Chinese market
Northern Europe
Western Europe
Southern Europe

Japan
Norway, Sweden, UK
Slovakia, Ukraine
Methodology note:
Level* Share
Annual
average
Cumulative
growth**
Share
2020
Cumulative
growth**
Share
2010
of which:
Long haul (000s) 13,446 61.7% 2.8% 14.8% 59.9% 8.1% 57.7%
Short haul (000s) 8,364 38.3% 4.3% 23.4% 40.1% -8.4% 42.3%
Travel to Europe***
Europe (000s) 4,273 19.6% 1.5% 7.6% 17.9% 2.9% 19.2%
Western Europe (000s) 2,046 9.4% 1.0% 5.1% 8.3% 5.5% 9.0%
2015 Growth (2015-20) Growth (2010-15)
Japan Market Share Summary
0
2
4
6
8
10
12
14
16
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Japan long haul* outbound travel Rest of Long Haul
Southern Europe
Western Europe
Northern Europe
Million
0%
2%
4%
6%
8%
10%
12%
14%
16%
18% 2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Europe's share of Japanese market
Northern Europe
Western Europe
Southern Europe

United Arab Emirates
Norway, Sweden, UK
Slovakia, Ukraine
Methodology note:
Level* Share
Annual
average
Cumulative
growth**
Share
2020
Cumulative
growth**
Share
2010
Total outbound travel (000s) 2,922 - 4.9% 26.9% - -14.3% -
of which:
Long haul (000s) 1,213 41.5% 2.9% 15.2% 37.7% 9.5% 32.5%
Short haul (000s) 1,710 58.5% 6.2% 35.1% 62.3% -25.7% 67.5%
Travel to Europe***
Europe (000s) 656 22.4% 1.9% 9.7% 19.4% 5.8% 18.2%
Northern Europe (000s) 220 7.5% -1.4% -7.0% 5.5% 8.0% 6.0%
Western Europe (000s) 270 9.2% 2.8% 14.9% 8.4% 15.6% 6.9%
2015 Growth (2015-20) Growth (2010-15)
United Arab Emirates Market Share Summary
0.0
0.5
1.0
1.5
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
UAE long haul* outbound travel Rest of Long Haul
Southern Europe
Western Europe
Northern Europe
Million
*Long haul defined as tourist arrivals to destinations outside the Middle East
0%
5%
10%
15%
20%
25%
30%
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Europe's share of Emirati market
Northern Europe
Western Europe
Southern Europe
*Long haul defined as tourist arrivals to destinations outside the Middle East

Russia
Norway, Sweden, UK
Slovakia, Ukraine
Methodology note:
destinations; In 2014 US data reporting shows 11.9m
Level* Share
Annual
average
Cumulative
growth**
Share
2020
Cumulative
growth**
Share
2010
of which:
Long haul (000s) 7,999 23.9% 9.4% 57.1% 28.1% 27.3% 24.0%
Short haul (000s) 25,408 76.1% 4.8% 26.5% 71.9% 27.7% 76.0%
Travel to Europe***
Europe (000s) 25,408 76.1% 4.8% 26.5% 71.9% 27.7% 76.0%
Northern Europe (000s) 1,779 5.3% 3.8% 20.8% 4.8% 29.0% 5.3%
Western Europe (000s) 2,118 6.3% 3.7% 20.0% 5.7% 58.3% 5.1%
2015 Growth (2015-20) Growth (2010-15)
Russia Market Share Summary
0
5
10
15
20
25
30
35
40
45
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Russia outbound travel Rest of World
Southern Europe
Western Europe
Northern Europe
Million
*Outbound travel defined as tourist arrivals to all destinations
0%
10%
20%
30%
40%
50%
60%
70%
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Europe's share of Russian market
Northern Europe
Western Europe
Southern Europe
% of outbound* market
*Outbound market defined as tourist arrivals to all destinations

Economic outlook summary: key source markets
 Assessing recent tourism data and industry performance is a useful way of directly
monitoring the key trends for travel demand across Europe. This can be complemented
by looking at key trends and relationships in macroeconomic performance in Europe’s
key source markets which can provide further useful insight into likely tourism
developments throughout the year.
 The linkages between macro and tourism performance can be very informative. For
example, strong GDP or consumer spending growth is an indication of rising prosperity
with people more likely to avail of international travel. It is also an indication of rising
business activity and therefore stronger business travel. Movements in exchange rates
against the euro can be equally important as it can influence choice of destination.
 Eurozone GDP growth is forecast to grow in 2015 across all key markets, most notably
Germany as a result of low inflation, falling unemployment, and more competitive
exports.
 The UK recovery is in full flow with strong growth across all key macro indicators
expected in 2015 and 2016, particularly GDP and consumer expenditure up 2.6% and
2.9% respectively compared to 2014. This growth is being led by low inflation which is
being driven by lower oil prices.
 Russian growth has slowed substantially in 2015 and Oxford Economics’ latest outlook is
recession with GDP expected to fall 3.6%. This is partly linked to the large devaluation of
the rouble which began last year and risks related to capital flight in emerging markets,
while a falling oil price will also affect government revenue and spending. There has
been some reprieve in recent months, however, with more competitive exports helping to
ease the pain currently being felt elsewhere in the economy. However, the continued
sanctions and counter-sanctions will act as a further drag on growth.
 Chinese growth has been downgraded again. Relatively strong GDP and consumer
expenditure growth is still expected, albeit slower than Indian growth expectations in the
short to medium term.
 Lower fuel prices, steadily reducing inflation and higher business and investor
confidence suggest that growth in India will accelerate in the coming months and strong
GDP and consumer expenditure growth will pave the way for outbound travel growth.
GDP
Consumer
expenditure
Unemploy-
ment **
Exchange
rate*** Inflation GDP
Consumer
expenditure
Unemploy-
ment **
Exchange
rate*** Inflation
UK 2.6% 2.9% -0.8% 11.0% 0.3% UK 2.8% 2.9% -0.2% 2.0% 1.7%
France 1.3% 1.9% 0.2% 0.0% 0.4% France 1.7% 1.5% -0.1% 0.0% 1.8%
Germany 2.0% 2.3% -0.2% 0.0% 0.6% Germany 2.2% 1.7% -0.1% 0.0% 1.9%
Netherlands 1.8% 1.0% -0.8% 0.0% 0.6% Netherlands 1.5% 0.9% -0.3% 0.0% 1.3%
Italy 0.5% 0.4% -0.1% 0.0% 0.3% Italy 1.0% 0.8% -0.2% 0.0% 1.1%
Russia -3.6% -6.2% 1.1% -19.4% 14.4% Russia 0.9% 1.1% 0.5% 3.0% 7.8%
US 2.2% 2.9% -0.8% 19.9% 0.3% US 2.8% 2.9% -0.3% 4.0% 2.3%
Canada 1.4% 1.9% -0.2% 9.4% 0.6% Canada 2.2% 2.2% -0.1% 7.6% 2.1%
Brazil -1.4% -1.1% 1.6% -7.6% 8.4% Brazil 0.5% 1.4% 0.8% -2.4% 6.3%
China 6.6% 7.1% 0.0% 17.9% 1.3% China 6.1% 7.0% 0.0% 1.8% 1.4%
Japan 1.0% 0.5% -0.1% 2.6% 0.3% Japan 1.8% 2.1% 0.1% -2.9% 0.6%
India 7.5% 7.1% 0.0% 15.6% 5.6% India 7.5% 7.2% -0.1% 1.3% 5.9%
* unless otherwise specified
** percentage point change
Note: Colour coding relates to each individual column and highlights the strongest performing countries shaded as dark green (e.g. China fastest growing GDP), and
weakest performaing countries as dark red (e.g. rising unemployment and falling GDP, consumer expenditure, and exchange rate in Russia).
Summary of economic outlook: 2015
% growth y-y*
Macroeconomic indicators
Summary of economic outlook: 2016
% growth y-y*
Macroeconomic indicators
*** exchange rates measured against the euro. A positive change indicates stronger local currency against the euro and therefore a positive impact on outbound
tourism demand. A negative change indicates weaker local currency against the euro and therefore a negative impact on outbound tourism demand.

-8.0
-6.0
-4.0
-2.0
0.0
2.0
4.0
6.0
8.0
10.0
1991 1994 1997 2000 2003 2006 2009 2012 2015
BRICs total Non-BRIC EM
EMs: Contribution to world trade growth
% point contributions to y/y growth in world goods trade
Source : Oxford Economics/Haver Analytics
% point contributions to y/y growth in world goods trade
-2.0
-1.5
-1.0
-0.5
0.0
0.5
1.0
1.5
-150
-100
-50
0
50
100
150
2011 2012 2013 2014 2015
US: Yields and economic surprises
%
US Economic
surprise index
(LHS)
Change in US
10-year yields
(RHS)
% points, 3m
Overview: Drag from emergers pulls down
World growth
 This month sees another downgrade to our
world growth forecasts, to 2.5% for 2015 and
3.0% for 2016, from 2.6% and 3.1% last
month.
 A key factor behind this downgrade is the
weak performance of emerging markets. In
Q1, we estimate that 17 large emergers cut 0.9
percentage points from annual world trade
growth – a phenomenon not seen since the
global financial crisis.
 China accounted for much of this, but imports
were also weak in other emergers where lower
commodity prices, high debt and structural
weaknesses are all contributing to slower
growth. Forecasts have been cut in several
emerging Asian countries this month.
 As a result, we now forecast world trade
growth at just 1.8% for 2015, a pace usually
associated with global recessions. Trade
growth is expected to remain below its long-
term average next year too, at 4.4%.
 Sluggish global demand has contributed to
weaker US growth in the early part of 2015,
with exports also probably suffering from the
strong dollar – Eurozone and Japanese
exports have held up better.
 US growth is still set to improve in H2 helped
by a strong labour market, but our forecast for
all of 2015 is for growth of just 2.1% (from
2.3% last month).
 The moderate pace of growth in major
economies makes the global upswing more
vulnerable to adverse shocks than in previous
cycles, as does the increased weight of
emergers in world GDP.
 Despite these risks upward pressure on global
bond yields has continued. This reflects
several factors including a correction from
over-bought levels – especially in the
Eurozone where markets had been pricing in
an excessively deflationary scenario.
 Indeed, Eurozone yields are now not only
above pre-QE levels but are also closing in on
the levels seen last August when ECB
president Draghi first flagged that QE was
coming. This suggests that an ECB policy
response is also a downside risks to global
yields now, as well as slow world growth.

2014 2015 2016 2017 2018 2019
Real GDP
North America
United States 2.4 2.1 2.8 2.7 2.8 2.8
Canada 2.4 1.4 2.2 2.7 2.7 2.4
Europe
Eurozone 0.9 1.6 1.8 1.7 1.6 1.5
Germany 1.6 2.0 2.2 1.7 1.3 1.0
France 0.2 1.3 1.7 1.6 1.5 1.6
Italy -0.4 0.5 1.0 1.1 1.0 1.0
UK 2.8 2.6 2.8 2.7 2.5 2.3
EU27 1.3 1.8 2.1 2.0 1.9 1.8
Asia
Japan -0.1 1.0 1.8 0.8 0.6 0.8
China 7.4 6.6 6.1 5.7 5.5 5.3
India 7.1 7.5 7.5 7.0 6.8 6.7
G7 1.6 1.7 2.4 2.1 2.1 2.0
World 2.6 2.5 3.0 3.1 3.2 3.1
World 2010 PPPs 3.3 3.2 3.8 3.9 3.8 3.8
World trade 3.0 1.8 4.4 5.3 5.5 5.2
Inflation (CPI)
North America
United States 1.6 0.3 2.3 2.2 2.2 2.2
Canada 1.9 0.6 2.1 2.0 1.9 1.9
Europe
Eurozone 0.4 0.3 1.5 1.5 1.6 1.6
Germany 0.9 0.6 1.9 1.9 1.8 1.5
France 0.5 0.4 1.8 1.6 1.6 1.7
Italy 0.2 0.3 1.1 1.1 1.3 1.7
UK 1.5 0.3 1.7 1.8 1.7 1.8
EU27 0.6 0.3 1.6 1.7 1.7 1.7
Asia
Japan 2.7 0.3 0.6 2.0 1.3 0.9
Emerging Asia, excl Japan 5.3 5.2 4.7 4.4 4.3 4.3
China 2.0 1.3 1.4 2.1 2.6 2.8
India 6.6 5.6 5.9 5.8 5.6 5.4
World 3.2 3.3 3.7 3.3 3.0 2.9
Exchange Rates
US$ Effective 78.4 89.9 91.8 91.6 90.2 88.8
$/€ 1.33 1.11 1.07 1.06 1.09 1.11
¥/$ 105.9 123.5 132.2 136.1 137.9 138.0
Commodity Prices
Brent Oil ($/bl) 99.0 62.0 68.7 71.3 72.9 74.1
Summary of International Forecasts

-1.0
-0.8
-0.6
-0.4
-0.2
0.0
0.2
0.4
0.6
0.8
-25
-20
-15
-10
-5
0
5
10
15
2004 2006 2008 2010 2012 2014
Eurozone: Employment & emp. intentions
Percent balance % quarter
Employment
(RHS)
EC survey of
employment
intentions (LHS)
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1.6
1.8
2.0
Jan 14 Jul 14 Jan 15
Ten year Eurozone swap rate
Ten-year German government bond yield
Source : Oxford Economics/Haver Analytics/Bloomberg
Eurozone: Interest Rates
% year
ECB formally
announced QE
Eurozone Economy
 Although Q1’s Eurozone GDP expansion was
a bit weaker than we had expected, the limited
available data for Q2 are fairly encouraging
and suggest that another quarter of solid
growth – by Eurozone standards – is on the
cards.
 What’s more, while Q1’s 0.4% rise may have
been on the lower side of expectations, Q4’s
modest upward revision and the breakdown
offered signs of encouragement. Quarterly
household spending growth picked up from
0.4% to 0.5% in response to the oil price
windfall. While the sharp rise in inflation since
the start of Q1 will act as a headwind to
household spending in Q2 and beyond, this
may be offset by a strengthening labour
market as domestic healing continues,
suggesting that our forecast for growth of 1.8%
this year still looks reasonable.
 Another plus was a further pick-up investment
growth. At 0.8% the quarterly gain was steady
rather than spectacular, but it provides hope
that the recovery is beginning to broaden.
 Our central view is still that investment and
exports – the latter grew only sluggishly in Q1
– will make larger contributions to growth as
the effects of the weaker euro, stronger
demand and the ECB’s efforts to boost the
supply of credit gradually take effect. As a
result, we see GDP growth picking up from an
above trend 1.6% this year to 1.8% in 2016.
 Nonetheless, the recovery remains fragile and
thus susceptible to shocks. Weaker than
assumed global trade growth, a Greek exit (to
which we attach a near 50% probability), or
renewed rises in the euro could all undermine
the recovery resulting in rather slower growth.
Against this backdrop, we continue to think
that early tapering by the ECB is unlikely.
Indeed, on the back of the fairly dovish
comments by President Draghi at June’s
interest rate press conference, increased bond
purchases would be more likely than not if
these downside risks emerged.
 The possibility of a Greece-less Eurozone
looms large with sizeable consequences. At
the time of writing the situation is still unclear
and the referendum has yet to take place.
-3.0
-2.5
-2.0
-1.5
-1.0
-0.5
0.0
0.5
1.0
1.5
2.0
-8
-6
-4
-2
0
2
4
2007 2008 2009 2010 2011 2012 2013 2014 2015
Quarterly change (RHS)
Annual change (LHS)
Eurozone: GDP
% year % quarter

UK Economy
 The second estimate of GDP growth in Q1
2015 was unrevised at 0.3%, with upward
revisions to the manufacturing and
construction sectors offset by a downgrade to
the estimate for the services sector. But with a
glaring disparity between the very soft official
output data and most other evidence on the
state of the economy, we continue to expect
Q1 growth to be revised upwards over time.
 While the PMI surveys have been more mixed
so far in Q2, indicators related to the consumer
sector have been almost universally positive.
In particular, retail sales volumes have
continued to grow at an annual pace of around
5%, while the CBI’s May survey reported the
most upbeat expectations for retail sales in 27
years. The strong performance of the
consumer sector reflects the substantial
improvement in household spending power
caused by the temporary absence of inflation –
the CPI measure even dipped into negative
territory in April – combined with a pickup in
wage growth and a reduction in the tax bill for
most workers following April’s large increase in
the tax free personal allowance.
 The Chancellor has decided to present a
‘summer Budget’ on 8 July. We expect this to
reveal a much greater emphasis on achieving
the desired reduction in government spending
through savings from the welfare budget,
rather than departmental spending, thus
removing the worst of the spending
‘rollercoaster’, which had appeared in the
March Budget. However, given that the
Conservatives appear likely to follow similar
fiscal rules to those adopted by the previous
coalition government and, therefore, engage in
a similar degree of fiscal consolidation, we do
not expect the Budget to have any tangible
impact on our forecast.
 May’s Inflation Report saw the MPC revise
down its forecasts for GDP growth, bringing
them into line with our own. Two members
appear close to voting for higher rates once
more, while the Committee as a whole
believes there is little slack left in the economy.
However, very low rates of inflation are likely to
preclude the Committee from increasing
interest rates this year and we still expect the
first hike to come in Q1 2016, at the earliest.
96
97
98
99
100
101
102
103
104
Apr-14 Jun-14 Aug-14 Oct-14 Dec-14 Feb-15 Apr-15 Jun-15
Manufacturing
Construction
Services
UK: Monthly output
Apr 2014 = 100
Horizontal lines denote quarterly averages
Forecast
-3
-2
-1
0
1
2
3
4
5
6
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Inc fuel Exc fuel
UK: Retail sales volumes
%3m-on-3m, yr ago
Source : Haver Analytics
1.0
1.2
1.4
1.6
1.8
2.0
2.2
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018
Source: Oxford Economics
Euro/£
US$/£
UK: Exchange rates
Forecast

US Economy
 As expected, revisions to Q1 GDP data showed the
US economy contracting 0.7% in Q1. Looking into
Q2, we expect a moderate GDP growth rebound
just shy of 2%; the advance will be constrained by a
strong dollar, depressed oil investment and
inventory depletion.
 Consumer spending disappointed in April with a flat
reading as consumers remained cautious in the
face of rebounding gas prices. However, with
nonfarm payrolls growing strongly in May, and
averaging a monthly gain of 255,000 over the past
year, we see solid underpinnings for household
outlays through the remainder of 2015.
 Monthly wage growth rose modestly in May, and we
see firmer labor compensation in the coming
months as labour market slack continues to
dissipate.
 With consumer confidence still very strong and
inflation subdued, consumer spending is expected
to advance 2.8% in 2015.
 Activity in the housing sector remains hesitant, but
the latest data were more encouraging with housing
starts and permits reaching multi-year highs in
April. We see faster wage growth, low interest rates
and moderate home price inflation supporting a
gradual housing rebound.
 The strong US dollar and sluggish global growth
continue to weigh on exports while solid domestic
activity maintains the pull on imports. Net trade may
subtract 0.5 percentage points from 2015 growth.
 We see reduced oil and gas investment weighing
on Q2 growth and lingering through the rest of the
year, while the mining sector will continue to
experience sizeable job losses.
 Headline inflation will soon accelerate towards 2%
on rebounding gasoline prices, less of an impact
from the stronger dollar and base effects.
Meanwhile core inflation will also accelerate on
strengthening activity.
 We have revised down our forecast for real GDP
growth in 2015 to 2.1% (from 2.3%) on a slow start
to the year, but maintain our call for 2.8% growth in
2016 as growth firms in H2 2015. As such, we see
the Fed proceeding to rate lift-off in September
2015.

Japanese Economy
 Both the preliminary and second estimates of
Q1 GDP growth provided upside surprises to
consensus 0.4% expectations. The latest
estimate is for 1% growth in the quarter, the
fastest among developed economies. Over half
(0.6 percentage points) of growth was due to a
build-up of inventories. The other big positive
came from investment spending, up 2.7% in the
quarter. As a result of the strong start to the
year we have increased our GDP forecast for
2015 to 1% (from 0.8%).
 A repeat of the stock building boost is unlikely
in the near term. But there is scope for a
sustained increase in investment spending – if
demand prospects are sufficiently favourable.
 On the export side there has been a revival in
exports (goods and services), which are up by
7.4% in the four quarters to Q1. Japan has
clearly benefited from the 30% fall in its
effective exchange rate over the last 2.5 years.
The current export outlook is clouded
somewhat by the slowdown in China, but
stronger US growth later this year will provide
an offset to this. Consumer spending continues
its modest if unspectacular recovery after last
year’s consumption tax hike. Consumption
increased by 0.4% in Q1 – a trend that is likely
to continue into 2016. After 1% GDP growth this
year we expect 1.8% next year as consumption
gains momentum, partly in anticipation of the
next consumption tax rise in 2017.
 Consumer price inflation (now free of
consumption tax distortions) was just 0.3% in
April on the target measure. A dip below zero is
possible later this year, especially if energy
prices fall back. At best inflation is likely to be
1% over the next year or so, still well below the
Bank of Japan’s 2% target. Unless GDP growth
surprises to the upside a further expansion of
QE is likely, probably in October. We expect
annual asset purchases to rise to Y100trn from
Y80trn.
 The effects of QE have been mainly on the
exchange rate and equity prices. Growth is not
likely to be boosted very significantly in the near
term by extra QE. But JGB yields may well fall
back as the BoJ steps up its bond purchases.
92
96
100
104
108
Q1-05 Q1-07 Q1-09 Q1-11 Q1-13 Q1-15
Japan real household consumption
2012 Q1 =100
-3
-2
-1
0
1
2
3
Apr-99 Apr-03 Apr-07 Apr-11 Apr-15
Japan CPI (excluding fresh food and consumption tax)
%
BoJ''s inflation target
6000
8000
10000
12000
14000
16000
18000
20000
2200065
70
75
80
85
90
95
100
105
110
115
May 12 Nov 12 May 13 Nov 13 May 14 Nov 14 May 15
Nikkei 225
Source: Haver Analytics
Japan: Exchange rate and stock market
Yen TWI (2010=100)
Nikkei 225 index (RHS, inverted)
JP Morgan nominal trade-weighted
Yen index (LHS)

0
2
4
6
8
10
12
14
16
18
2002 2004 2006 2008 2010 2012 2014
US$ bn (seasonally adjusted)
Source: China Customs / Oxford Economics
China: Imports
Germany
Taiwan
Korea
Emerging Market Economies
Chinese imports are falling sharply…
China’s goods imports (in dollar terms) contracted by
more than 17% on the year in May, the same pace as in
Q1 and the seventh straight month that they have fallen.
Although some of the weakness can be explained by
lower commodity prices, we estimate that volumes are
falling at a 5-6% annual pace in Q2, little different from
the 7% drop in Q1. And we do not see any near term pick
up as the structural adjustments underway will continue
to dampen demand. In April new housing starts fell by
17% on the year and real estate investment grew by just
6%.
Sharply weaker construction is depressing output in
sectors related to housing such as cement and steel.
Other sectors that have built up excess supply over the
past few years, for example coal and iron ore, are also
running down output, further dampening growth. The
HSBC PMI contracted for a third month in May and the
risk that the slowdown will be sharper than the authorities
would be able to control seems to be increasing. To ease
the risks, we see the PBoC continuing to loosen policy,
taking the one-year lending rate to 4.1% by mid-2016 and
lowering the amount of reserves banks have to keep at
the central bank to maintain adequate liquidity. However,
these measures will support a managed slowdown rather
than a rebound in activity and, as a result, the
considerable downward pressure on world trade will
persist, particularly dampening activity elsewhere in Asia.
…weighing on global trade, particularly Asia
We have reduced our forecasts for 2015 growth in Korea,
Thailand, Hong Kong, Singapore, Malaysia and Taiwan
this month on weaker trade. We expect Korea to grow by
2.8% this year, down from 3.3% in 2014 and for growth in
Taiwan to slow to 2.7% from 3.8% in 2014. In Malaysia
we see growth slowing from 6% last year to just 4.5%.
No scope for policy to boost Brazil activity…
Chile and Brazil are sensitive to shifts in Chinese demand
and for Brazil the weak external backdrop will only
exacerbate the deep domestic malaise. The economy
contracted in Q1 and the high frequency data indicate a
larger drop in Q2. Inflation is above 8% and likely to stay
high due to rising regulated prices and the pass-through
from the exchange rate depreciation. As a result, the
central bank raised interest rates again in June to
13.75%, the highest since 2008. On the fiscal front, the
government is raising taxes and cutting spending in order
to avert a sovereign rating downgrade. Although we
-20
-10
0
10
20
30
40
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Overall IP
Electricity
Cement
Steel
Plate glass
China: Industrial production by industry
% year
Source: Oxford Economics/Haver Analytics
3 month moving average
0 2 4 6 8 10 12 14 16 18 20
Hong Kong
Singapore
Taiwan
Korea
Vietnam
Malaysia
Chile
Thailand
Australia
MENA
SS Africa
Philippines
Japan
Russia
Indonesia
Brazil
Eurozone
US
India
Mexico
Turkey
Exports to China, 2014
% of GDP
^100

expect the public debt to reach nearly 70% in 2016, from
just 55% in 2013, we still believe that Brazil will maintain
its investment grade status in the coming years.
...and political uncertainty higher in Turkey
In the June 7 parliamentary election in Turkey the ruling
party lost its parliamentary majority, effectively ending
thirteen years of single-party rule. This comes after a time
when policy making had lost its way and forecasts of
medium-term growth have weakened. GDP surprised on
the upside in Q1 but leading indicators suggest this is
unlikely to be maintained and high inflation and a weak
currency leaves no room for further monetary easing.
Policy to mitigate downside risks in India…
Headline GDP growth accelerated to 7.5% in Q1 2015
but monthly data paint a mixed picture, raising concerns
about both the pace and sustainability of the recovery.
Upside risks to inflation from a possible drought limit the
room for further policy easing but, provided food prices
do not surge, we expect the RBI to cut rates by a further
25bp in the next few months (taking the repo rate down
to 7%). We also expect infrastructure investment to be
increased. Indeed in February, the government pushed
out its fiscal consolidation roadmap by a year to FY2018
and pegged the FY2016 fiscal deficit at 3.9% of GDP.
India’s vulnerability to external stress has lessened but
not disappeared; investor confidence could falter due to a
slow pace of reforms or the upcoming Fed rate hike,
leading to large portfolio outflows and INR depreciation.
…and in Russia, as inflation is now easing
Preliminary estimates indicate that Russia contracted by
1.9% year-on-year in Q1, undermined by sanctions and
lower oil prices. And leading indicators of economic
activity continued to worsen in April: industrial output and
fixed capital investment both fell by more than 4% on the
year. Meanwhile, consumption has been especially hard
hit, with retail sales volumes, a good proxy for consumer
demand, falling by 9.8% year-on-year in April, in tandem
with a 13.2% drop in real wage growth. However, inflation
has been slowing in recent months and this, coupled with
the negative output gap and falling inflation expectations,
ensures the CBR has the scope to ease policy, and we
expect a further 100 basis point cut at the next MPC
meeting on June 15. The rouble has weakened by about
10% since mid-May in response to a combination of the
CBR starting to buy foreign exchange in an effort to stem
the rouble’s rally and the oil price stabilising after its rise
from January lows.
-15
-10
-5
0
5
10
15
20
25
30
1997 1999 2001 2003 2005 2007 2009 2011 2013 2015
% year
Consumer
spending
Brazil: GDP, consumer spending & investment
GDP
Investment
-3
0
3
6
9
12
15
18
2000 2002 2004 2006 2008 2010 2012 2014
%
India: Interest rates & inflation
Repo rate
CPI (industrial
workers)
Total WPI
-30
-20
-10
0
10
20
30
2002 2004 2006 2008 2010 2012 2014
% year
Russia: Wages, retail sales & capital spending
Retail sales
Capital spending
Real wages

Glossary of commonly used terms and abbreviations
Airline industry indicators
ASK Available Seat Kilometers. Indicator of airline supply, available seats x
kilometers flown
PLF Passenger Load Factor. Indicator of airline capacity. Equal to revenue
passenger kilometers (RPK) / available seat kilometers (ASK)
RPK Revenue Passenger Kilometers. Indicator of airline demand, paying
passenger x kilometers flown
3mth mav Three month moving average
Hotel industry indicators
ADR Average Daily Rate – Indicator of hotel room pricing. Equal to hotel room
revenue / rooms sold in a given period
Occ Occupancy Rate – Indicator of hotel performance. Equal to the number of
hotel rooms sold / room supply
RevPAR Revenue per Available Room – Indicator of hotel performance. Equal to
hotel room revenue / rooms available in a given period
Central Banks
BoE Bank of England;
MPC Monetary Policy Committee of BoE
BoJ Bank of Japan
ECB European Central Bank
Fed Federal Reserve (US)
RBI Reserve Bank of India
OBR Office for Budget Responsilbility
Economic indicators and terms
BP Basis Point – A unit equal to one hundredth of a percentage point
Broad money Key indicator of money supply and liquidity including currency
holdings as well as bank deposits that can easily be converted to
cash
CPI Consumer Price Index – Measure of price inflation for consumer
goods
FDI Foreign Direct Investment – Investment form one country into
another, usually by companies rather than governments
GDP Gross Domestic Product – The value of goods and services
produced in a given economy

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