European tourism 2013

European Tourism in 2013: Trends & Prospects (Q1/2013) 1
European Tourism in 2013:
Trends & Prospects
Quarterly Report (Q4/2013)
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EUROPEAN TOURISM in 2013:
TRENDS & PROSPECTS
Quarterly Report (Q4/2013)
A quarterly insights report produced for the Market Intelligence Group
of the European Travel Commission (ETC)
by Tourism Economics (an Oxford Economics Company)
Brussels, February 2014
ETC Market Intelligence Report

Copyright © 2014 European Travel Commission
European Tourism in 2013: Trends & Prospects (Q4/2013)
All rights reserved. The contents of this report may be quoted, provided the source
is given accurately and clearly. Distribution or reproduction in full is permitted for
own or internal use only. While we encourage distribution via publicly accessible
websites, this should be done via a link to ETC's corporate website,
www.etc-corporate.org, referring visitors to the Market Intelligence Section.
The designations employed and the presentation of material in this publication do
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.
Published and printed by the European Travel Commission
Rue du Marché aux Herbes, 61, 1000 Brussels, Belgium
Website: www.etc-corporate.org
Email: info@visiteurope.com
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: Hohensalzburg in winter, Salzburger Land, Austria.
Photo © Shutterstock / JLR Photography

© European Travel Commission, February 2014
Foreword
European tourism full speed ahead
Destinations in Europe can look back over the past year
and celebrate the outstanding performance of their
tourism sector. According to the latest UNWTO
estimates, Europe hosted 563 million international
visitors in 2013, 29 million more than in previous year.
In relative terms, this means a robust growth of 5.4%,
which is well above the most optimistic forecasts
formulated at the beginning of 2013, which pointed to a
maximum increase of 3%.
Robust growth is reported by virtually all destinations.
Among Europe largest destinations, Turkey (+10%),
France (+8%) and Spain (+6%) are expected to have
grown faster than the regional average, contributing to
as much as one-third of growth in absolute terms.
Germany (+4%) remains on a steady growth path and
hits the 30 million mark in foreign visitors. In Italy (+3%)
stagnation seems to be over, at least in terms of
inbound travel.
A remarkably high number of smaller destinations
reports two-digit growth. Iceland is the best-in-class
performer, with a 21% increase in foreign visits,
followed by Latvia (+14%), Serbia (+13%), Greece
(+12%), Slovakia and Malta (both +10%). Above
average growth is reported also by Lithuania (+8%),
Ireland (+7%), Croatia and Bulgaria (+6% each).
Full recovery at hand for destination Europe
With international tourist arrivals 14% higher than the
pre-crisis peak level in 2007 (chart above), volumes are
just some 4% below what it would have been had the
crisis not happened (see chart in the middle). In 20 out
of 35 countries in Europe (see chart at the bottom),
international tourist arrivals are at least 10 percentage
points above the pre-crisis peak level. This is the case
also for destinations like Poland and Portugal, where
the crisis hit earlier and for a longer period of time. Only
five destinations in this sample still show values below
the pre-crisis level, but show continuous improvement.
Factors that contributed to tourism recovery include the
resilience of demand, especially from the intra-
European market, the far from exhausted appeal of
Europe as a tourism destination in long-haul markets,
as well as an aggressive price policy to attract cost-
conscious travellers. This is reflected in a subdued level
of International Tourism Receipts (chart above) and
hotels average daily rates, which were still falling in
2013. This trend is likely to revert in 2014, supported by
a strong demand for European tourism.
International Tourist Arrivals to Europe (mn)
10 years annual average growth = 3%
Average (crisis excluded)
Source: UNWTO, ETC analysis *: estimate
0
100
200
300
400
500
600
700
2000 2002 2004 2006 2008 2010 2012
No-crisis scenario (k=3%) Actual data
International Tourist Arrivals (Index, 2007 = 100)
Destination Series 2008 2009 2010 2011 2012 2013*
Iceland AA 105 117 115 134 157 189
Latvia AA 112 89 104 126 130 148
Lithuania AA 108 89 99 119 133 143
Estonia NA 101 94 110 129 131 135
Bulgaria AT 112 111 117 122 127 134
Serbia AA 93 93 98 110 116 131
Germany NA 103 100 111 117 126 130
Slovenia AA 112 104 107 116 123 128
Hungary AA 102 94 100 111 121 127
Malta AT 103 94 106 112 115 126
Croatia AA 101 100 98 107 113 120
Poland AA 92 88 94 101 113 120
Austria AA 106 103 106 111 116 119
Italy AA 97 96 102 111 114 115
Spain AA 99 89 98 108 109 115
Sweden NG 100 104 109 112 114 114
Cyprus AA 99 94 102 109 113 110
Portugal NG 98 87 88 97 102 110
Finland NA 103 92 94 103 109 109
Czech Republic AA 100 90 95 101 107 109
Romania AV 115 98 97 99 103 106
Belgium AA 102 97 102 106 108 106
Switzerland AG 102 98 102 101 101 105
Slovak Republic AA 104 77 79 87 91 100
Luxembourg AA 96 93 88 95 99 100
Greece AV 91 85 86 94 89 99
Denmark NA 94 89 93 97 98 97
United Kingdom AH 97 91 97 100 92 97
Norway NA 98 90 91 90 91 91
Ireland AT 96 85 77 81 81 87
France AA 97 89 91 103 105 -
Netherlands AA 92 90 99 103 106 -
Turkey AV 113 116 123 135 136 -
Source: TourMIS
International Tourism Indicators for Europe (index)
2007 = 100
Source: UNWTO, ETC analysis *: estimate
80
90
100
110
120
2008 2009 2010 2011 2012 2013*
International Tourist Arivals
International Tourism Receipts

2 European Tourism in 2013: Trends & Prospects (Q4/2013)
Solid foundations for future growth
Some of the positive factors underlying 2013 growth will persist into the next year. International
tourist arrivals growth accelerated during the year, also due to the recovery of large outbound
markets such as France and UK. This positive trend is expected to continue through 2014, as the
euro area (+1.0%) is turning the corner from recession to recovery, according to the IMF
1
. The
financial institution’s latest forecasts on economic output predict the end of recession eventually
for Spain (+0.2%) and Italy (+0.7%). Forecasts also point to somewhat better prospects for
France (+1.0%) and Germany (+1.4%). In the UK (+1.9%) growth will be sustained by easier
credit conditions and increased confidence. Outside the EU, Russia is expected to further
consolidate its significance as outbound travel market, despite the economic slowdown, as its
rising middle-class becomes more acquainted and independent with travel.
The US is expected to remain the powerhouse of long-haul tourism demand for Europe. Key
indicators suggest economic growth accelerating into 2014, which will be reflected in improved
demand for international tourism. Boosted by a rising currency, Chinese tourism is expected to
match recent years’ performance, marked by remarkable growth in virtually every destination in
Europe. Mega-events and the overall policy environment might instead lead to a softer growth of
outbound travel from Brazil. Japan performance as outbound travel market remains hard to
predict, as uncertainty on the quickening economic growth remains high.
Outlook 2014
Overall, ETC expects international tourism to grow between 3% and 4% in 2014, in line with
UNWTO and Tourism Economics projections. Once again, the economic performance of
Europe’s internal market remains decisive to determine the regions’ performance, influencing
both international and domestic travelling, the length of stay and the average holiday budget. A
number of initiatives, among which Sochi Winter Olympics, the Great War Centennial festivities,
or Germany’s UNESCO world heritage theme year, will contribute to keep attention for European
destinations high. With an increasing number of destinations targeting luxury segments, such as
travellers interested in golf, spa and wellness or wine and gourmet, tourism-generated revenues
are also expected to ultimately grow in line with arrivals.
“European tourism has a bright future ahead” said Eduardo Santander, ETC Executive Director
during the Destination Europe 2020 conference, held in Brussels on the 12th February. “Today
we celebrate the activities realized by ETC, with the support of the European Commission, to
enhance the promotion of Europe in long-haul markets. All representatives of the tourism sector
present here today are pleased with the stunning increase in international arrivals, but they are
also concerned about the threats posed by rapidly growing competition”. “Competition is tough”,
echoed Pedro Ortún, Director for Tourism of the European Commission, “but European
destinations have by far all the means to stand out as the most attractive, diverse and unique
destinations worldwide. In the EU, international arrivals grew by a solid 4.6% last year. With the
joint effort of both the public and private sector, we can consolidate this growth path and secure
Europe a long term position as world Number 1 destination”.
ETC Executive Unit
ETC Market Intelligence Group
1
Source: http://www.imf.org/external/pubs/ft/weo/2014/update/01.

© European Travel Commission February 2014
2013 Tourism Performance Summary
Demand for European tourism in 2013 was stronger than was expected at the start of the
year, helped by improvement in Eurozone economic activity and some improvement in
intra-regional travel. Arrivals growth in all European destinations reporting through
TourMIS averaged 4.6% for the year to date on a weighted average across all countries.
Growth in overnights was slower than growth in arrivals, indicating some lingering
softness in demand for travel to European destinations. 4.0% growth in overnights was
reported on a weighted average basis, slower than arrivals. Of the 20 destinations
reporting both arrivals and overnights 15 reported slower nights.
Growth accelerated during the year and there has also been a striking improvement in
demand from some origin markets. Arrivals grew 4.6% in latest year to date data on a
weighted average basis, compared with just 3.1% growth during the first half of the year.
This improved growth is expected to continue, with further acceleration in demand
expected from some key origin markets and notably those in Western Europe.
The large markets of UK and Spain saw clear improvement in arrivals throughout the year
and are both reported to have grown 5% for the year to date. Arrivals now clearly exceed
previous peak levels recorded in 2007 for both destinations. UK arrivals surpassed that
level in 2012 but trends in that year were distorted by the London Olympics. 2013 data
confirm the full recovery without the benefit of the major event.
Greece experienced a year of strong growth, with arrivals now estimated to be almost
10% higher than in the previous peak in 2007. Further strong improvement in demand
from Russia was evident, as well as recovery from more traditional Western European
markets. Iceland and Serbia have also benefitted from Russian arrivals, making a
significant contribution to notably strong arrivals growth in these countries.
Travel to Italy has also improved as the year has progressed but still with only moderate
growth reported.
Cyprus still stands out towards the bottom of the growth table as the only destination
reporting a fall in arrivals, particularly marked at the time of the financial crisis. Denmark
and Norway also reported a fall in overnights for the year to date, albeit much more
moderate than for Cyprus.
-10
-5
0
5
10
15
20
Iceland
Latvia
Serbia
Greece
Slovakia
Malta
Lithuania
IrelandRep
Croatia
Hungary
Bulgaria
Poland
UK
Spain
Netherlands
Montenegro
Slovenia
Romania
Germany
Estonia
Austria
CzechRep
Italy
Foreign visits to select destinations
2013, year-to-date*, % change year ago
Source : TourMIS *date varies (Jun-Dec) by destination
-10
-5
0
5
10
15
20
Serbia
Latvia
Malta
Portugal
Netherlands
Bulgaria
Lithuania
Slovakia
Romania
Spain
Hungary
Poland
Croatia
Germany
Montenegro
Slovenia
Switzerland
Estonia
Austria
CzechRep
Luxembourg
Finland
Sweden
Norway
Denmark
Cyprus
Foreign visitor nights in select destinations
Source : TourMIS *date varies (Sep-Dec) by destination

Travel demand growth is available for the full year for only two countries, with a majority of
countries reporting data through November. Arrivals for the first 11 months of the year
typically account for around 95% of annual arrivals, while arrivals through October account
for almost 90% of annual travel demand.
Country % ytd to month % ytd to month
Austria 2.6 Jan-Oct 1.5 Jan-Oct
Bulgaria 5.5 Jan-Nov 6.6 Jan-Oct
Croatia 6.3 Jan-Dec 4.8 Jan-Dec
Cyprus -2.5 Jan-Nov -5.7 Jan-Sep
Czech Rep 1.5 Jan-Sep 1.1 Jan-Sep
Denmark -0.8 Jan-Nov
Estonia 3.3 Jan-Nov 2.2 Jan-Nov
Finland 0.3 Jan-Oct
Germany 3.7 Jan-Nov 4.5 Jan-Nov
Greece 12.3 Jan-Jun
Hungary 5.5 Jan-Nov 4.9 Jan-Nov
Iceland 20.7 Jan-Dec
Ireland Rep 7.1 Jan-Nov
Italy 1.1 Jan-Sep
Latvia 14.3 Jan-Sep 9.5 Jan-Sep
Lithuania 7.1 Jan-Sep 6.3 Jan-Sep
Luxembourg 1.0 Jan-Oct
Malta 9.8 Jan-Nov 8.5 Jan-Nov
Montenegro 4.6 Jan-Nov 3.2 Jan-Nov
Netherlands 5.0 Jan-Oct 7.6 Jan-Oct
Norway -0.1 Jan-Nov
Poland 5.4 Jan-Oct 4.9 Jan-Oct
Portugal 8.0 Jan-Oct
Romania 3.5 Jan-Sep 5.3 Jan-Sep
Serbia 12.8 Jan-Nov 10.0 Jan-Nov
Slovakia 10.1 Jan-Sep 6.1 Jan-Sep
Slovenia 4.3 Jan-Oct 3.2 Jan-Oct
Spain 5.0 Jan-Nov 5.1 Jan-Nov
Sweden 0.3 Jan-Oct
Switzerland 3.2 Jan-Nov
UK 5.0 Jan-Nov
Source: TourMIS, http://www.tourmis.info; available data as of 21.01.14
Measures used for nights and arrivals vary by country
See TourMIS for further data including absolute values.
International Arrivals International Nights
Tourist Arrivals and Nights
2013 Performance, Year to Date

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 to Oxford
Economics’ macroeconomic outlook according to estimated relationships between tourism
and the wider economy. Full origin-destination country detail is available online to
subscribers.
2011 2012 2013 2014 2015 2011 2012 2013 2014 2015
data/estimate/forecast *** d d e f f d d e f f
World 5.2% 4.1% 4.6% 4.7% 5.2% 4.5% 4.0% 5.0% 5.0% 5.5%
Americas 3.6% 4.3% 2.8% 4.8% 4.9% 3.5% 5.8% 3.9% 5.5% 5.4%
North America 2.9% 4.5% 3.4% 4.5% 4.8% 0.4% 5.2% 3.9% 5.4% 5.5%
Caribbean 2.2% 1.1% 0.9% 3.7% 4.2% -5.0% -0.1% 3.2% 4.6% 7.1%
Central & South America 6.9% 5.6% 1.9% 6.6% 5.6% 17.8% 9.2% 4.3% 5.9% 4.7%
Europe 7.3% 3.8% 5.2% 3.9% 4.2% 4.1% 4.3% 4.0% 3.7% 4.1%
EU 6.8% 3.0% 4.1% 3.4% 3.5% 1.7% 1.3% 1.9% 3.4% 3.8%
Non-EU 9.4% 6.7% 9.2% 5.4% 6.6% 12.7% 13.9% 10.1% 4.6% 4.8%
Northern 11.1% 4.5% 3.4% 3.1% 3.0% 4.4% 3.8% 3.8% 4.5% 4.0%
Western 4.5% 3.0% 2.9% 2.5% 3.1% 3.9% 2.2% 2.0% 4.2% 3.8%
Southern/Mediterranean 7.4% 1.7% 6.3% 5.2% 4.6% 1.0% -1.2% 1.3% 1.1% 2.1%
Central/Eastern 9.6% 7.4% 7.6% 3.2% 4.8% 5.9% 8.2% 6.9% 4.0% 5.5%
- Central & Baltic 6.9% 4.6% 4.4% 3.3% 4.8% -4.1% 2.2% 0.6% 1.4% 5.6%
Asia & the Pacific 6.3% 7.0% 6.3% 6.5% 7.5% 7.3% 7.0% 7.7% 6.5% 7.1%
North East 3.8% 6.0% 3.7% 6.5% 7.7% 7.7% 8.4% 8.0% 6.3% 6.9%
South East 10.2% 9.3% 10.4% 7.0% 8.0% 5.2% 5.5% 8.4% 6.3% 7.3%
South 12.2% 5.5% 5.1% 6.7% 4.4% 11.0% -1.4% 2.4% 12.2% 9.1%
Oceania 2.7% 2.4% 4.6% 3.0% 4.0% 7.1% 4.9% 5.5% 4.3% 6.6%
Africa -7.7% 8.0% -0.6% 3.8% 3.8% 4.1% 6.7% 1.0% 2.9% 4.0%
Mid East 2.2% -9.3% 2.9% 6.3% 6.9% -0.3% -12.0% 4.8% 7.1% 8.5%
* 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 2012
e - 2013 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
EU = Austria, Belgium, Bulgaria, Croatia, 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-Herzogovina, 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, Lativia,
Lithuania, Poland, Romania, Russian Federation, Slovakia, Ukraine
of w hich
Central Europe & Baltic countries = Bulgaria, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia
Inbound*
TDM Visitor Growth Forecasts, % change
Outbound**

Recent Industry Performance
Tourism growth set to continue into 2014
Tourism demand continued to grow in 2013 for the fourth consecutive year
Growth in industry indicators has improved as the year progressed, having
decelerated in late 2012
Long-haul demand has remained an important factor in European industry
performance, while short-haul demand is also improving
Capacity improvements allow for further growth
Hotel occupancy rates confirm growth, with some positive ADR improvement an
indication of rising confidence in the industry
Air Transport
Air passenger demand picked up through the year to record
the fourth consecutive year of growth in revenue passenger
kilometres (RPK). 2013 growth was the slowest growth rate
recorded out of these four years at 5.3% compared to averge
growth of 7.1% in the prior 3 years. Growth improved during
the summer from particularly slow performance at the start of
the year. There is a slight downward trend in the latest
months, slowing from the monthly peak rate in August.
Growth in North American travel in particular has eased in
recent months, having experienced slowest growth of all
regions in 2013 to date. Further easing in Asia Pacific is also
evident in recent months.
European air passenger demand for 2013 to date is also
slower than in previous years according to data from IATA at
3.7% compared to average growth of 6.7% in prior three
years. However, improvement was clearly evident as the
year progressed in monthly data with demand growth in the
second half of the year at 4.4%.
0
5
10
15
20
Africa Asia/Pacific Europe Latin
America
Mid.East N.America World
Aug-2013
Sep-2013
Oct-2013
Nov-2013
% year
Source: IATA
Monthly international air passenger growth
-12
-9
-6
-3
0
3
6
9
12
15
18
2005 2006 2007 2008 2009 2010 2011 2012 2013
RPK = revenue passenger kms
Source: IATA
3 month
moving
average
Icelandic Ash
Cloud Impact
International air passenger traffic growth
% year, RPK
Africa Asia/Pacific Europe Latin
America
Mid.East N.America World
0
5
10
15
20
2011
2012
2013 ytd
% year, RPK
Source: IATA
Annual international air passenger growth

AEA data confirm that European airline demand continued to grow in 2013 with reported
RPK growth of 2.6%, following average growth of 5.2% in the prior three years. Monthly
data show that the pace of growth accelerated throughout the year from some particularly
slow performance at the start of 2013, turning around the trend of deceleration in 2012.
Initial weekly data for the start of 2014 show further improvement in RPK.
Air seat capacity also rose throughout 2013, and is accelerating into 2014 as a clear point
of difference from late 2012. Load factors also continue to edge up as capacity is being
used efficiently on intra-regional travel.
Air travel demand has remained fastest on long-haul routes throughout 2013, although
short-haul demand has grown. This is part of a longer run trend as the share of European
arrivals from long-haul markets has risen from 13% in 2003 to around 19% in 2013.
Trans-Atlantic travel has remained particularly strong according to the AEA data, with a
clear improvement in the second half of the year. Travel between Europe and Asia slowed
towards the end of last year with some disruption from political unrest in the region.
60
65
70
75
80
85
90
Q1 Q2 Q3 Q4
Weekly load factor, %
Source: AEA
European airlines passenger load factor
2012
2013
2011
-5
0
5
10
15
20
25
30
Q1 Q2 Q3 Q4
ASK, 4 week moving average, % change year ago
Source: AEA
European airlines capacity
2013
2011
2012
-4
-2
0
2
4
6
8
10
12
14
2012Q1
2012Q2
2012Q3
2012Q4
2013Q1
2013Q2
2013Q3
2013Q4
2014Q1
RPK, 4 week moving average, % change year ago
Source: AEA
European airline passenger traffic: Americas
Europe-
Americas
Total European Airlines
-4
-2
0
2
4
6
8
10
12
14
2012Q1
2012Q2
2012Q3
2012Q4
2013Q1
2013Q2
2013Q3
2013Q4
2014Q1
RPK, 4 week moving average, % change year ago
Source: AEA
European airline passenger traffic: Asia
Europe-Asia
Total European Airlines

Accommodation
Hotel demand confirms the growth trend indicated by airline data. Occupancy
growth is reported for all regions except Asia/Pacific, and even here demand
growth is believed to be offset by growing supply. Occupancy has improved as
the year progressed to offset falls in the first half of the year. Improvement is
notable in North-East Asia as some political tensions have eased. However, room
rates have fallen further in the wider region reflecting uncertainty in several
countries.
Americas demand growth has moderated as 2013 occupancy growth of 1.5% is
slower than 2% experienced in the first half of the year. ADR in the region has
also moderated slightly, including some slightly slower growth in North America in
the wake of some economic slowdown and political uncertainty, notably in fiscal
policy.
Strikingly, hotel occupancy growth in Europe of 2.4% was faster than in any other
region in 2013, although ADR still fell 0.6% (denominated in euros). European
room demand has been helped by the observed growth in long-haul demand but
has also been supported by some shift to some more short-haul and domestic
demand from European markets. This trend is likely to have started to reverse in
late 2013 as occupancy has improved in the second half of the year and the fall
in ADR has moderated in the region with growth in several countries.
European ADR has been influenced by mega events with data reflecting an offset
from particularly strong growth in UK and Poland in 2012 related to the Olympics
and UEFA football tournament. These countries explain a large proportion of the
ADR falls for Eastern and Northern Europe; falls of 4.0% and 3.5% were
recorded respectively for these regions. However, ADR grew 3.6% in 2013 in
Southern Europe and edged up 0.3% in Western Europe.
Asia/Pacific Americas Europe Middle
East/Africa
-6
-4
-2
0
2
4
6 Occ ADR* RevPAR*
Global Hotel Performance, Jan-Dec 2013
% change year ago
Source: STR Global * ADR and RevPAR denominated in US$ except for Europe

Hotel occupancy rose in most European destinations, with an average growth of
2.4% for the region. 22 out of the 25 countries covered by STR Global in their
recent European Hotel Review report growth in occupancy; a clear improvement
from the first half of the year when only 16 countries reported growth.
Demand and occupancy remains strongest in some Eastern and Northern
European countries, benefitting from arrivals from longer-haul markets as well as
Russian arrivals. Southern European hotel demand and occupancy have also
continued to rise, while the region has notably been able to increase ADR.
Hotel occupancy growth includes domestic as well as international demand and
some slower occupancy growth than arrivals can be explained by continued weak
domestic demand. For example, Spanish occupancy growth is well below the
reported 5% arrivals. Italy and France stand out as having notable divergences
from arrivals data. Italian hotel demand was much stronger than arrivals trend while
France was notably weaker. It should also be noted that as part of cost savings,
tourists may still be seeking out lower cost, non-hotel options for lodging.
-6
-4
-2
0
2
4
6
8
Europe Eastern
Europe
Northern
Europe
Southern
Europe
Western
Europe
Occ ADR (€) RevPAR (€)
European hotel performance, Jan-Dec 2013
% change year ago
Source: STR Global
-5
0
5
10
Lithuania
Slovakia
Ireland
Poland
Italy
Portugal
Greece
Switzerland
UnitedKingdom
Russia
Romania
Malta
Hungary
Spain
CzechRepublic
Netherlands
Germany
Belgium
France
Austria
Estonia
Turkey
Finland
Hotel occupancy rates
Jan-Dec year to date, % change year ago
Source: STR Global

There is a reported positive trend in ADR for a majority of countries, but the trend
is less positive than for occupancy. There is typically a lag between occupancy
and ADR growth, but we would have expected some more positive ADR trends at
this point in the cycle. Cost savings may also still be influencing the lower ADR
performance than occupancy.
-10
-5
0
5
10
15
20
25
30
Lithuania
Ireland
Estonia
Malta
Hungary
Russia
Greece
Portugal
Italy
Spain
Turkey
Switzerland
UnitedKingdom
Slovakia
CzechRepublic
Belgium
France
Germany
Romania
Netherlands
Austria
Poland
Finland
Hotel revenue per available room (RevPAR)
Jan-Dec year to date, local currency, % change year ago
-10
-5
0
5
10
15
20
Lithuania
Estonia
Turkey
Malta
Hungary
Ireland
Russia
Spain
Greece
Portugal
Belgium
France
Italy
CzechRepublic
Switzerland
Germany
UnitedKingdom
Netherlands
Finland
Romania
Austria
Slovakia
Poland
Hotel average daily rate (ADR)
Jan-Dec year to date, local currency, % change year ago
Source : STR Global
% change year ago Occupancy ADR RevPAR
Austria 0.2 -2.5 -2.3
Belgium 0.6 1.6 2.3
Czech Republic 1.8 1.0 2.7
Estonia 0.0 8.7 8.7
Finland -3.7 -1.1 -4.7
France 0.4 1.5 1.9
Germany 1.0 0.7 1.7
Greece 4.6 2.3 6.9
Hungary 2.9 4.9 7.9
Ireland 5.7 4.6 10.5
Italy 4.6 1.3 6.0
Lithuania 9.6 17.2 28.5
Malta 3.1 5.4 8.6
Netherlands 1.4 -1.0 0.4
Poland 5.5 -9.6 -4.7
Portugal 4.6 2.2 6.9
Romania 3.2 -2.3 0.8
Russia 3.5 3.3 6.9
Slovakia 6.8 -3.0 3.6
Spain 2.2 2.7 4.9
Switzerland 3.9 0.8 4.7
Turkey -2.1 7.0 4.8
United Kingdom 3.7 0.2 3.9
Source: STR Global
Hotel Performance
Year to Date, Jan-Dec 2013
ADR = Average Daily Rate, RevPAR = Revenue per Available Room, ADR
and RevPAR in local currency

Key Source Market Performance
Growth improved throughout 2013
Intra-European demand has continued to grow throughout 2013, but
performance remains mixed
A majority of destinations reported growing travel demand from major
European origin markets, although demand from some key European
markets remains soft, with some shorter stays still being sought
Long-haul demand remains robust and these markets continue to gain
importance
Trends discussed in this section are for data to October or November 2013 for most
countries, although actual coverage varies by destination. Trends shown will not exactly
match final 2013 growth but should be indicative of full year performance in most
instances and reflects cross-country differences.
Further detailed monthly data for origin and destination, including absolute values, can be
obtained from TourMIS, http://tourmis.info.
Key intra-European markets
Travel from Germany to other European countries has continued to grow in 2013 with
a majority of European destinations reporting arrivals growth. However, half of the 24
countries reporting overnights data from Germany still report that volumes fell during
the year. And those countries reporting both metrics suggest that average length of
stay has typically fallen. Only Cyprus and Estonia report an increase in average length
of stay.
This mixed performance is typified by travel to Spain and Italy, two large destinations
comprising 25% of German outbound travel to Europe. Spanish arrivals from Germany
rose 5.2%, while Italian arrivals fell 8.1%. The year is also notable for some rebound in
demand for Greece as a destination.
-20
-15
-10
-5
0
5
10
15
20
Iceland
Greece
Slovakia
Netherlands
Serbia
Malta
Montenegro
Poland
Spain
Bulgaria
UK
Croatia
Austria
Slovenia
Latvia
Lithuania
Romania
Hungary
CzechRep
Italy
Estonia
Cyprus
Visits from Germany to select destinations
<-31.2
-20
-15
-10
-5
0
5
10
15
20
Portugal
Netherlands
Slovakia
Malta
Luxembourg
Poland
Croatia
Serbia
Montenegro
Austria
Spain
Sweden
Slovenia
Switzerland
Lithuania
Denmark
CzechRep
Hungary
Romania
Latvia
Finland
Estonia
Bulgaria
Norway
Cyprus
German visitor nights in select destinations
<-29.1

-20
-15
-10
-5
0
5
10
15
20
Greece
UK
Poland
Iceland
Malta
Slovenia
Italy
Serbia
Lithuania
Spain
Romania
Croatia
Slovakia
Hungary
Germany
Montenegro
Austria
Bulgaria
CzechRep
Estonia
Visits from Netherlands to select destinations
22.6>
-20
-15
-10
-5
0
5
10
15
20
Poland
Malta
Romania
Slovenia
Slovakia
Hungary
Spain
Sweden
Germany
Denmark
Portugal
Croatia
Switzerland
Austria
CzechRep
Luxembourg
Finland
Serbia
Lithuania
Estonia
Norway
Montenegro
Bulgaria
Cyprus
Netherlands nights in select destinations
<-38.4
<-21.6
-10
-5
0
5
10
15
20
Greece
Iceland
Montenegro
Latvia
Malta
Croatia
Slovenia
Spain
UK
Serbia
Netherlands
Poland
Hungary
Germany
Bulgaria
Slovakia
Romania
Austria
CzechRep
Estonia
Lithuania
Italy
Visits from France to select destinations
-10
-5
0
5
10
15
20
Lithuania
Latvia
Montenegro
Malta
Spain
Bulgaria
Slovenia
Croatia
Netherlands
Germany
Poland
Luxembourg
Switzerland
Hungary
Serbia
Denmark
Austria
Finland
Norway
CzechRep
Sweden
Romania
Slovakia
Estonia
Cyprus
French visitor nights in select destinations
<-17.2
Weaker data remain evident for Dutch tourism demand, although a majority of
European destinations report increases in arrivals, including some large
destinations such as Spain, Italy and UK. Travel to Greece has also performed
particularly well, as a reversal of recent decline.
But the trend in overnights is notably negative with just 7 out of 23 destinations
countries reporting growth in arrivals. A majority of destinations still report falling
length of stay, including some large destinations such as Spain and Austria.
French tourism demand improved notably during the second half of 2013 with a
majority of destinations reporting growth in arrivals and overnights. Data for the
year to date show that this growth is an acceleration from in 2012. Two of the top
three European destinations for French travellers are the UK and Spain which
received increased volumes of tourists in 2013, and who stayed for longer in the
case of Spain. However, the second most visited destination is Italy which
experienced lower travel demand. Greece has also been able to welcome a
significant number of additional French tourists during 2013.
A small majority of destinations (9 out of 17) report increased length of stay for
2013. This is not an indication of a universal increase in demand and confidence
but is an improvement from recent years consistent with moderate improvement in
economic demand.

-20
-15
-10
-5
0
5
10
15
20
Greece
Iceland
Malta
UK
Slovakia
Bulgaria
Netherlands
Hungary
Romania
Croatia
Germany
Slovenia
Poland
Austria
Latvia
CzechRep
Spain
Lithuania
Estonia
Montenegro
Serbia
Visits from Italy to select destinations
24.2>
Travel demand from Italy remains weaker than from some other European origin
markets as a majority of destinations report lower arrivals and overnights than a year
earlier. Some large destinations such as Greece and UK report growth, but this also
appears to represent some rebound from particularly low levels.
Growth in Italian hotel occupancy reported by STR Global implies some substitution by
Italians towards domestic travel, as international arrivals are only reported to have
edged up over the same period.
Demand from the UK has been a notable bright spot for European tourism in 2013
with considerable improvement in travel to most countries from muted performance in
previous years. However, even with robust growth in UK demand, departures to
elsewhere in Europe in 2013 are estimated to have remained more than 10% lower
than previous peak levels achieved in 2007.
UK outbound demand is believed to be on an upward trend, consistent with the
nascent economic recovery. In particular, the ongoing expected improvements in the
labour market, along with some strengthening in sterling against the euro, will be
important factors.
-20
-15
-10
-5
0
5
10
15
20
Luxembourg
Malta
Denmark
Romania
Sweden
Slovakia
Netherlands
Switzerland
Germany
Hungary
Norway
Croatia
Poland
Slovenia
Austria
Spain
Portugal
CzechRep
Latvia
Estonia
Lithuania
Finland
Bulgaria
Montenegro
Serbia
Cyprus
Italian visitor nights in select destinations
25.5>
<-27.8
<-28.1
-20
-10
0
10
20
30
Iceland
Montenegro
Croatia
Lithuania
Hungary
Slovakia
Slovenia
Serbia
Germany
Latvia
Austria
IrelandRep
Spain
CzechRep
Poland
Malta
Netherlands
Romania
Italy
Bulgaria
Cyprus
Greece
Estonia
Visits from UK to select destinations
44.9>
<-21.2
-20
-10
0
10
20
30
Croatia
Lithuania
Montenegro
Hungary
Finland
Bulgaria
Portugal
Denmark
Slovenia
Germany
Latvia
Switzerland
Austria
Luxembourg
Spain
Poland
Slovakia
Malta
CzechRep
Romania
Serbia
Netherlands
Sweden
Norway
Cyprus
Estonia
British visitor nights in select destinations
<-22.8

Travel from Russia has continued to defy expectations of a slowdown with strong growth
in arrivals and overnights reported for the majority of European destinations. Growth is
reported for a wide range of destinations, including Eastern European countries (being
geographically close destinations) as well as some Western and Southern markets
including Spain.
Travel to Croatia stands out as having experienced notable decline in visits from Russia,
with over 20% fall in both arrivals and overnights, apparently related to Croatia’s entry to
the EU. Notably the requirement for a Schengen visa has made it harder for Russians to
visit Croatia. Arrivals from Russia have fallen sharply since the middle of the year. It may
also be the case that other Balkan countries have benefitted from some displaced travel.
This is expected to be a temporary effect as seen in the experience of previous EU
enlargement. When previous countries joined the EU and Schengen zone, arrivals from
Russia experienced a short-term fall, before resuming a growth path.
-20
-10
0
10
20
30
40
50
Iceland
Greece
Serbia
Latvia
Slovakia
Spain
Cyprus
Malta
Montenegro
Hungary
Netherlands
Italy
Lithuania
Estonia
Bulgaria
Romania
Germany
Slovenia
CzechRep
Austria
Poland
UK
Croatia
Visits from Russia to select destinations
-20
-10
0
10
20
30
40
50
Spain
Serbia
Slovakia
Hungary
Latvia
Netherlands
Montenegro
Portugal
Germany
Denmark
Cyprus
Estonia
Lithuania
Romania
CzechRep
Bulgaria
Malta
Austria
Finland
Norway
Luxembourg
Sweden
Switzerland
Poland
Slovenia
Croatia
Russian visitor nights in select destinations

Non-European markets
Despite the growth in intra-European tourism in 2013, it remains clear that long-haul
demand remained important during the year. This is confirmed by the airline data
which also point to a continuation of this growth performance into 2014.
Long-haul demand for travel to Europe will be supported by continued economic
growth and further rises in tourism demand in developed markets. While there are
clear economic risks in some emerging markets, the increasing spending power of the
middle classes and continued ease of travel will ensure that tourism growth persists.
US travel demand continued to grow to Europe as a whole in 2013, although a
significant proportion of destinations reported a shorter length of stay; a likely indication
of lower travel confidence. Average length of stay of American tourists in Europe has
been remarkably stable over the past ten years. This followed a trend of shorter stays
in the previous decade and a resumption of this preference for increasingly shorter
stays cannot be ruled out. But given some economic uncertainty in the US over the
past year it is estimated that this is just a short-run movement.
Japanese outbound growth in general and to Europe in particular improved during the
second half of 2013. Performance remained mixed by country, with a large proportion of
countries still reporting lower arrivals and overnights than in 2012. But on average data
imply growth to the region, with some large destinations receiving increasing numbers
of visitors. Average growth is also faster than according to data for earlier in the year. A
notable improvement is evident for data for Italy.
-20
-15
-10
-5
0
5
10
15
20
25
30
Slovenia
Greece
Iceland
Croatia
Slovakia
Latvia
Hungary
Italy
Poland
Lithuania
Serbia
Austria
Malta
CzechRep
Bulgaria
Montenegro
Germany
Romania
UK
Spain
Netherlands
Estonia
Visits from US to select destinations
39.4>
-20
-15
-10
-5
0
5
10
15
20
25
30
Latvia
Croatia
Lithuania
Portugal
Hungary
Malta
Poland
Serbia
Luxembourg
Denmark
Slovakia
Slovenia
Austria
CzechRep
Switzerland
Germany
Romania
Cyprus
Sweden
Norway
Netherlands
Estonia
Spain
Finland
Bulgaria
Montenegro
US visitor nights in select destinations
34.0>
-20
-10
0
10
20
30
Montenegro
Italy
Estonia
Poland
Iceland
Netherlands
Spain
Romania
Lithuania
Croatia
Austria
Hungary
Bulgaria
Germany
Serbia
CzechRep
Greece
Slovakia
UK
Slovenia
Visits from Japan to select destinations
-20
-10
0
10
20
30
Cyprus
Poland
Bulgaria
Estonia
Finland
Portugal
Luxembourg
Lithuania
Spain
Hungary
Netherlands
Germany
Austria
Croatia
Romania
Switzerland
Slovakia
CzechRep
Denmark
Montenegro
Serbia
Slovenia
Sweden
Norway
Japanese visitor nights in select destinations

By contrast to the slower economic activity in China, outbound travel demand has
continued to increase at a fast pace throughout 2013, helped by easier access to travel for
a growing proportion of the population. The number of overnights spent by Chinese tourists
also rose strongly with increases in average length of stay. The rise in the proportion of
middle class tourists will make tourism more of a mass market activity and will reduce the
average spending per Chinese visitor, but this effect is clearly not evident yet.
Growth in European tourism demand from India also continued to rise on average in
2013, according to the limited data. Growth is more subdued than from China, and
visitor volumes are also significantly lower in general. The largest exception to this is the
UK, which receives almost double the number of Indian tourists than Chinese. UK and
France are important destinations for Indian tourists, and receive approximately 40% of
all Indian visitors to Europe. Growth in Indian travel to UK grew 10% in the year to
November. However, overnights to Switzerland, the third most visited destination in
Europe fell slightly during the year providing a note of caution.
-10
0
10
20
30
40
50
Greece
Spain
Estonia
Bulgaria
Croatia
Slovenia
Iceland
Germany
Netherlands
Serbia
Austria
CzechRep
UK
Poland
Italy
Romania
Slovakia
Lithuania
Visits from China to select destinations
-30
-20
-10
0
10
20
30
40
50
Slovakia
Croatia
Spain
Bulgaria
CzechRep
UK
Germany
Netherlands
Poland
Austria
Romania
Visits from India to select destinations
57.4>
-30
-20
-10
0
10
20
30
40
50
Spain
Croatia
Slovakia
Sweden
CzechRep
Poland
Finland
Germany
Netherlands
Switzerland
Austria
Romania
Indian visitor nights in select destinations
68.3>
-10
0
10
20
30
40
50
Cyprus
Norway
Estonia
Denmark
Slovenia
Finland
Croatia
Switzerland
Sweden
Romania
Austria
Luxembourg
Netherlands
Poland
Germany
CzechRep
Slovakia
Spain
Serbia
Lithuania
Chinese visitor nights in select destinations
Source : TourMIS *date varies (Sep-Dec) by destination130.1>
65.3>

Canadian travel demand continues to follow a broadly similar pattern to US demand with
growth reported by a majority of countries, including some of the larger more popular
destinations. But there was a generally uneven performance and on average a fall in the
length of stay for many countries.
-30
-20
-10
0
10
20
30
Iceland
Greece
Serbia
Croatia
UK
Italy
Slovenia
Bulgaria
Montenegro
Netherlands
CzechRep
Slovakia
Germany
Romania
Austria
Poland
Spain
Lithuania
Visits from Canada to select destinations
<32.0
-30
-20
-10
0
10
20
30
Norway
Serbia
Croatia
Portugal
Denmark
Netherlands
Slovenia
Sweden
Germany
Montenegro
Spain
Switzerland
CzechRep
Austria
Romania
Poland
Slovakia
Finland
Cyprus
Lithuania
Canadian visitor nights in select destinations
38.1>

Origin Market Share Analysis
United States
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. 2013 values
remain preliminary estimates and are not final reported data.
81.6 million tourists traveled from the US in 2013. Of
these, 31.1 million traveled within North America, while
50.5 million (61.9%) traveled to long-haul destinations.
US tourist arrivals to Europe in 2013 totaled 22.1 million,
representing 43.7% of the US long-haul outbound market.
US tourist arrivals to Northern Europe in 2013 totaled 5.0
million, representing 22.8% of US arrivals to Europe.
US tourist arrivals to Western Europe in 2013 totaled 8.7
US tourist arrivals to Southern Europe in 2013 totaled 5.5
US tourist arrivals to Central/Eastern Europe in 2013
totaled 2.9 million, representing 13.2% of US arrivals to
Europe.
Northern Europe's share of the US market was 10.0% in
2013, a 3.8 percentage point decrease from 2003.
Western Europe's share of the US market was 17.1% in
Southern Europe's share of the US market was 12.0% in
2013, a 2.4 percentage point increase from 2003.
Central/Eastern Europe's share of the US market was
7.9% in 2013, a 1.2 percentage point decrease from 2003.
Long-haul outbound from the US is forecast to grow 6.4%
per year on average to 2018
Arrivals to Northern Europe are expected to increase
40.8% through 2018, to 7.1 million. Northern Europe's
share of the US market is forecast to rise to 10.3% in
2018
Arrivals to Western Europe are expected to increase
26.4% through 2018, to 10.9 million. Western Europe's
share of the US market is forecast to fall to 15.9% in 2018
Arrivals to Southern Europe are expected to increase
27.7% through 2018, to 7.0 million. Southern Europe's
share of the US market is forecast to fall to 11.3% in 2018
Arrivals to Central/Eastern Europe are expected to
increase 53.6% through 2018, to 4.5 million.
Central/Eastern Europe's share of the US market is
forecast to rise to 8.8% in 2018
0
10
20
30
40
50
60
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
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%
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
Europe's share of US market
Northern Europe
Western Europe
Southern Europe
% of long haul* market
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-
Herzogovina, 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

Canada
35.4 million tourists traveled from Canada in 2013. Of these,
24.2 million traveled within North America, while 11.2 million
(31.6%) traveled to long-haul destinations.
Canadian tourist arrivals to Europe in 2013 totaled 4.4 million,
representing 39.8% of the Canadian long-haul outbound
market.
Canadian tourist arrivals to Northern Europe in 2013 totaled
1.1 million, representing 24.8% of Canadian arrivals to
Europe.
Canadian tourist arrivals to Western Europe in 2013 totaled
Europe.
Canadian tourist arrivals to Southern Europe in 2013 totaled
Europe.
Canadian tourist arrivals to Central/Eastern Europe in 2013
totaled 0.3 million, representing 6.9% of Canadian arrivals to
Europe.
Northern Europe's share of the Canadian market was 9.9% in
Western Europe's share of the Canadian market was 15.1%
in 2013, a 2.1 percentage point decrease from 2003.
Southern Europe's share of the Canadian market was 13.4%
in 2013, a 2.0 percentage point increase from 2003.
Central/Eastern Europe's share of the Canadian market was
Long-haul outbound from Canada is forecast to grow 3.6%
per year on average to 2018.
Arrivals to Northern Europe are expected to increase 26.2%
through 2018, to 1.4 million. Northern Europe's share of the
Canadian market is forecast to rise to 10.5% in 2018.
Arrivals to Western Europe are expected to increase 4.5%
through 2018, to 1.8 million. Western Europe's share of the
Canadian market is forecast to fall to 13.3% in 2018.
Arrivals to Southern Europe are expected to increase 11.2%
through 2018, to 1.5 million. Southern Europe's share of the
Canadian market is forecast to fall to 12.6% in 2018.
Arrivals to Central/Eastern Europe are expected to increase
32.1% through 2018, to .04 million. Central/Eastern Europe's
share of the Canadian market is forecast to rise to 4.0% in
2018.
0
2
4
6
8
10
12
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
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%
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
Europe's share of Canadian market Northern Europe
Western Europe
Southern Europe

Mexico
16.9 million tourists traveled from Mexico in 2013. Of these,
14.8 million traveled within North America, while 2.2 million
Mexican tourist arrivals to Europe in 2013 totaled 1.2 million,
representing 55.6% of the Mexican long-haul outbound
market.
Mexican tourist arrivals to Northern Europe in 2013 totaled
115,000, representing 9.6% of Mexican arrivals to Europe.
Mexican tourist arrivals to Western Europe in 2013 totaled
Mexican tourist arrivals to Southern Europe in 2013 totaled
Mexican tourist arrivals to Central/Eastern Europe in 2013
totaled 109,000, representing 9.1% of Mexican arrivals to
Europe.
Northern Europe's share of the Mexican market was 5.3% in
Western Europe's share of the Mexican market was 26.2% in
2013, a 8.5 percentage point increase from 2003
Southern Europe's share of the Mexican market was 20.1% in
2013, a 1.7 percentage point decrease from 2003
Central/Eastern Europe's share of the Mexican market was
7.4% in 2013, a 2.1 percentage point increase from 2003
Long-haul outbound from Mexico is forecast to grow 8.2% per
year on average to 2018.
through 2018, to 181,000. Northern Europe's share of the
Mexican market is forecast to rise to 5.7% in 2018.
through 2018, to 744,000. Western Europe's share of the
Mexican market is forecast to fall to 23.3% in 2018.
through 2018, to 474,000. Southern Europe's share of the
Mexican market is forecast to fall to 15.7% in 2018.
61.5% through 2018, to 176,000. Central/Eastern Europe's
share of the Mexican market is forecast to rise to 7.8% in
2018.
0.0
0.5
1.0
1.5
2.0
2.5
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Mexico long haul* outbound travel Rest of Long Haul
Southern Europe
Western Europe
Northern Europe
Million
0%
5%
10%
15%
20%
25%
30%
35%
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
Europe's share of Mexican market
Northern Europe
Western Europe
Southern Europe

Argentina
7.7 million tourists traveled from Argentina in 2013. Of
these, 5.4 million traveled within South America, while 2.3
million (30.3%) traveled to long-haul destinations.
Argentinian tourist arrivals to Europe in 2013 totaled 0.9
million, representing 37.6% of the Argentinian long -haul
outbound market.
Argentinian tourist arrivals to Northern Europe in 2013
totaled 155,000, representing 17.7% of Argentinian arrivals
to Europe.
Argentinian tourist arrivals to Western Europe in 2013
totaled 46,000, representing 5.2% of Argentinian arrivals to
Europe.
Argentinian tourist arrivals to Southern Europe in 2013
totaled 593,000, representing 67.7% of Argentinian arrivals
to Europe.
Argentinian tourist arrivals to Central/Eastern Europe in
2013 totaled 83,000, representing 9.4% of Argentinian
arrivals to Europe.
Northern Europe's share of the Argentinian market was
6.6% in 2013, a 1.8 percentage point increase from 2003.
Western Europe's share of the Argentinian market was
Southern Europe's share of the Argentinian market was
27.2% in 2013, a 14.0 percentage point decrease from
2003.
Central/Eastern Europe's share of the Argentinian market
was 3.9% in 2013, a 2.7 percentage point decrease from
2003.
Long-haul outbound from Argentina is forecast to grow
7.9% per year on average to 2018.
79.2% through 2018, to 277,000. Northern Europe's share
of the Argentinian market is forecast to rise to 8.2% in
2018.
73.5% through 2018, to 80,000. Western Europe's share
2018.
51.6% through 2018, to 899,000. Southern Europe's share
2018.
increase 95.3% through 2018, to 162,000. Central/Eastern
Europe's share of the Argentinian market is forecast to rise
to 5.3% in 2018.
0.0
0.5
1.0
1.5
2.0
2.5
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
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%
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
Europe's share of Argentinean market
Northern Europe
Western Europe
Southern Europe

Brazil
9.6 million tourists traveled from Brazil in 2013. Of these,
2.5 million traveled within South America, while 7.1 million
Brazilian tourist arrivals to Europe in 2013 totaled 3.8
million, representing 53.9% of the Brazilian long-haul
outbound market.
Brazilian tourist arrivals to Northern Europe in 2013 totaled
301,000, representing 7.9% of Brazilian arrivals to Europe.
Brazilian tourist arrivals to Western Europe in 2013 totaled
1,854,000, representing 48.6% of Brazilian arrivals to
Europe.
Brazilian tourist arrivals to Southern Europe in 2013 totaled
1,395,000, representing 36.6% of Brazilian arrivals to
Europe.
Brazilian tourist arrivals to Central/Eastern Europe in 2013
totaled 265,000, representing 6.9% of Brazilian arrivals to
Europe.
Northern Europe's share of the Brazilian market was 4.3%
Western Europe's share of the Brazilian market was 26.2%
Southern Europe's share of the Brazilian market was
Central/Eastern Europe's share of the Brazilian market was
5.4% in 2013, a 0.8 percentage point increase from 2003.
Long-haul outbound from Brazil is forecast to grow 4.4%
47.4% through 2018, to 443,000. Northern Europe's share
of the Brazilian market is forecast to rise to 5.0% in 2018.
Arrivals to Western Europe are expected to decrease -
0.5% through 2018, to 1,844,000. Western Europe's share
of the Brazilian market is forecast to fall to 21.0% in 2018.
Arrivals to Southern Europe are expected to decrease -
9.3% through 2018, to 1,265,000. Southern Europe's share
of the Brazilian market is forecast to fall to 15.2% in 2018.
increase 38.0% through 2018, to 365,000. Central/Eastern
Europe's share of the Brazilian market is forecast to rise to
5.6% in 2018.
0
1
2
3
4
5
6
7
8
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Brazil long haul* outbound travel Rest of Long Haul
Southern Europe
Western Europe
Northern Europe
Million
0%
5%
10%
15%
20%
25%
30%
35%
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
Europe's share of Brazilian market
Northern Europe
Western Europe
Southern Europe

India
10.4 million tourists traveled from India in 2013. Of these,
0.5 million traveled within South Asia, while 9.9 million
Indian tourist arrivals to Europe in 2013 totaled 1.6
million, representing 15.9% of the Indian long-haul
outbound market.
Indian tourist arrivals to Northern Europe in 2013 totaled
361,000, representing 23.0% of Indian arrivals to Europe.
Indian tourist arrivals to Western Europe in 2013 totaled
Indian tourist arrivals to Southern Europe in 2013 totaled
Indian tourist arrivals to Central/Eastern Europe in 2013
totaled 324,000, representing 20.6% of Indian arrivals to
Europe.
Northern Europe's share of the Indian market was 3.6%
Western Europe's share of the Indian market was 5.9% in
Southern Europe's share of the Indian market was 3.1%
Central/Eastern Europe's share of the Indian market was
2003.
Long-haul outbound from India is forecast to grow 10.4%
27.1% through 2018, to 459,000. Northern Europe's
share of the Indian market is forecast to fall to 2.8% in
2018.
65.9% through 2018, to 976,000. Western Europe's share
of the Indian market is forecast to rise to 6.0% in 2018.
48.9% through 2018, to 445,000. Southern Europe's
share of the Indian market is forecast to fall to 2.8% in
2018.
increase 110.6% through 2018, to 682,000.
Central/Eastern Europe's share of the Indian market is
forecast to rise to 4.6% in 2018.
0
2
4
6
8
10
12
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
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%
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
Europe's share of Indian market
Northern Europe
Western Europe
Southern Europe
*Long haul defined as tourist arrivals to destinations outside South Asia

China
58.9 million tourists traveled from China in 2013. Of these,
34.8 million traveled within Northeast Asia, while 24.0 million
Chinese tourist arrivals to Europe in 2013 totaled 7.5 million,
representing 31.0% of the Chinese long -haul outbound
market.
Chinese tourist arrivals to Northern Europe in 2013 totaled
513,000, representing 6.9% of Chinese arrivals to Europe.
Chinese tourist arrivals to Western Europe in 2013 totaled
3,929,000, representing 52.6% of Chinese arrivals to Europe.
Chinese tourist arrivals to Southern Europe in 2013 totaled
519,000, representing 6.9% of Chinese arrivals to Europe.
Chinese tourist arrivals to Central/Eastern Europe in 2013
totaled 2,503,000, representing 33.5% of Chinese arrivals to
Europe.
Northern Europe's share of the Chinese market was 2.1% in
Western Europe's share of the Chinese market was 16.3% in
Southern Europe's share of the Chinese market was 2.2% in
Central/Eastern Europe's share of the Chinese market was
Long-haul outbound from China is forecast to grow 6.8% per
Chinese market is forecast to rise to 2.5% in 2018.
through 2018, to 5,773,000. Western Europe's share of the
46.4% through 2018, to 3,665,000. Central/Eastern Europe's
share of the Chinese market is forecast to rise to 13.7% in
2018.
0
5
10
15
20
25
30
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
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%
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
Europe's share of Chinese market
Northern Europe
Western Europe
Southern Europe

Japan
23.6 million tourists traveled from Japan in 2013. Of these, 8.9
million traveled within Northeast Asia, while 14.6 million
Japanese tourist arrivals to Europe in 2013 totaled 4.7 million,
representing 32.4% of the Japanese long-haul outbound
market.
Japanese tourist arrivals to Northern Europe in 2013 totaled
544,000, representing 11.5% of Japanese arrivals to Europe.
Japanese tourist arrivals to Western Europe in 2013 totaled
2,388,000, representing 50.4% of Japanese arrivals to
Europe.
Japanese tourist arrivals to Southern Europe in 2013 totaled
1,210,000, representing 25.5% of Japanese arrivals to
Europe.
Japanese tourist arrivals to Central/Eastern Europe in 2013
totaled 598,000, representing 12.6% of Japanese arrivals to
Europe.
Northern Europe's share of the Japanese market was 3.7% in
Western Europe's share of the Japanese market was 16.3%
Southern Europe's share of the Japanese market was 8.6% in
Central/Eastern Europe's share of the Japanese market was
Long-haul outbound from Japan is forecast to grow 4.7% per
Japanese market is forecast to rise to 3.5% in 2018.
through 2018, to 2,880,000. Western Europe's share of the
through 2018, to 1,525,000. Southern Europe's share of the
46.0% through 2018, to 874,000. Central/Eastern Europe's
share of the Japanese market is forecast to rise to 5.9% in
2018.
0
2
4
6
8
10
12
14
16
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
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%
20%
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
Europe's share of Japanese market
Northern Europe
Western Europe
Southern Europe

United Arab Emirates
2.5 million tourists traveled from the UAE in 2013. Of these, 1.2
million traveled within the Middle East, while 1.3 million (51.7%)
traveled to long-haul destinations.
Emirati tourist arrivals to Europe in 2013 totaled 0.8 million,
representing 58.6% of the Emirati long-haul outbound market.
Emirati tourist arrivals to Northern Europe in 2013 totaled
257,000, representing 33.9% of Emirati arrivals to Europe.
Emirati tourist arrivals to Western Europe in 2013 totaled
Emirati tourist arrivals to Southern Europe in 2013 totaled
Emirati tourist arrivals to Central/Eastern Europe in 2013 totaled
Northern Europe's share of the Emirati market was 19.9% in
Western Europe's share of the Emirati market was 26.3% in
Southern Europe's share of the Emirati market was 14.1% in
Central/Eastern Europe's share of the Emirati market was 2.1%
Long-haul outbound from the UAE is forecast to grow 1.8% per
Emirati market is forecast to rise to 18.5% in 2018.
Arrivals to Western Europe are expected to decrease -9.5%
through 2018, to 308,000. Western Europe's share of the
71.4% through 2018, to 25,000. Central/Eastern Europe's share
of the Emirati market is forecast to rise to 3.0% in 2018.
0.0
0.5
1.0
1.5
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
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%
35%
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
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
42.2 million tourists traveled from Russia in 2013. Of these,
34.0 million (80.5%) traveled within Europe, while 8.2 million
traveled to destinations outside Europe.
Russian tourist arrivals to Northern Europe in 2013 totaled
1.7 million, representing 5.1% of Russian arrivals to Europe.
Russian tourist arrivals to Western Europe in 2013 totaled
2.4 million, representing 7.0% of Russian arrivals to Europe.
Russian tourist arrivals to Southern Europe in 2013 totaled
9.1 million, representing 26.7% of Russian arrivals to
Europe.
Russian tourist arrivals to Central/Eastern Europe in 2013
totaled 20.8 million, representing 61.2% of Russian arrivals
to Europe.
Northern Europe's share of the Russian market was 4.1% in
Western Europe's share of the Russian market was 5.7% in
Southern Europe's share of the Russian market was 22.4%
Central/Eastern Europe's share of the Russian market was
2003.
International outbound travel from Russia is forecast to grow
5.1% per year on average to 2018.
through 2018, to 2.1 million. Northern Europe's share of the
Russian market is forecast to fall to 3.9% in 2018.
through 2018, to 2.9 million. Western Europe's share of the
Russian market is forecast to fall to 5.4% in 2018.
through 2018, to 13.4 million. Southern Europe's share of
the Russian market is forecast to rise to 25.7% in 2018.
14.7% through 2018, to 23.9 million. Central/Eastern
Europe's share of the Russian market is forecast to fall to
48.6% in 2018.
0
5
10
15
20
25
30
35
40
45
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
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%
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
Europe's share of Russian market
Northern Europe
Western Europe
Southern Europe
% of outbound* market
*Outbound market defined as tourist arrivals to all destinations

Global Economy: 2013 outlook is brighter than 2012 as risks
recede
Near-term US growth prospects have been damaged
by the two-week government shutdown and dispute
over raising the debt ceiling in the first half of October.
We estimate that Q4 US GDP growth (on an
annualised basis) will have been cut by up to 0.5%
points. We now forecast economic growth of 1.6% for
the US in 2013 and 2.9% next year.
Although a deal has now been struck to end the
shutdown and raise the debt ceiling, it is only temporary
and risks related to the US fiscal situation could
resurface next spring. The worst-case scenario could
involve the US needing to make very sharp expenditure
cuts, damaging the recovery.
Aside from the recent events in the US, the broad
pattern over recent months has been for generally
encouraging growth indications from the major
advanced economies, but disappointment from the
emerging economies.
US data releases before the government shutdown
were mixed, but key survey indicators such as the ISM
surveys were buoyant suggesting accelerating growth
into 2014.
Meanwhile, Japan and the UK have posted impressive
growth performances in recent months resulting in
significant upgrades to our growth forecasts for both
countries. UK growth is now expected to reach 2.2%
next year while Japan expands 1.9% this year and
1.6% next.
Eurozone indicators have also continued to point to
gradual improvement, although growth performance
there remains patchy and significant challenges remain
that will restrain growth to 1% in 2014.
By contrast, the performance of key emerging markets
has been disappointing and our GDP forecasts for
China, India and Brazil have all been downgraded
significantly. China is now seen growing 7.4% this year
and 7.1% next (from 8.2% and 8.5% six months ago),
India at 4.1% this year and 4.5% next (from 5.2% and
7.2%) and Brazil at 2.6% this year and 1.9% next (from
2.9% and 4.4%).
Moreover, downside risks to growth remain in the
emerging countries. In particular, some countries have
been forced to raise interest rates to curb inflationary
pressures caused by rapidly falling currencies, even
though economic growth has been slowing. Recent
Chinese data, however, has been more encouraging.
25
30
35
40
45
50
55
60
65
2005 2006 2007 2008 2009 2010 2011 2012 2013
G3: Manufacturing Purchasing Managers' Index
Index
Source : PMI/Markit
Eurozone
US
Japan
Values above 50 indicate
expansion in activity; values
below 50 indicate contraction
-15
-10
-5
0
5
10
15
20
25
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
UK
US
Eurozone
Japan
World: Corporate holdings of broad money
% year
Source : Oxford Economics/Haver Analytics

2012 2013 2014 2015 2016 2017
Real GDP
North America
United States 2.8 1.6 2.9 3.2 3.1 3.1
Canada 1.7 1.6 2.0 2.8 2.9 2.7
Europe
Eurozone -0.6 -0.3 0.9 1.4 1.6 1.7
Germany 0.9 0.6 1.6 1.7 1.7 1.7
France 0.0 0.3 0.9 1.1 1.3 1.4
Italy -2.4 -1.9 0.1 1.2 1.5 1.4
UK 0.1 1.4 2.2 2.4 2.7 2.8
EU27 -0.3 -0.1 1.3 1.7 1.9 2.0
Asia
Japan 2.0 1.9 1.6 1.3 0.8 1.1
China 7.7 7.4 7.1 7.3 7.5 7.4
India 5.1 4.1 4.5 5.9 6.3 6.6
G7 1.7 1.2 2.2 2.4 2.3 2.4
World 2.4 2.1 2.9 3.2 3.3 3.4
World 2005 PPPs 3.1 2.8 3.5 4.0 4.1 4.1
World trade 2.3 2.5 5.1 6.1 6.1 6.0
Inflation (CPI)
North America
United States 2.1 1.5 2.1 2.2 2.1 2.1
Canada 1.5 1.0 1.6 2.1 2.2 2.2
Europe
Eurozone 2.5 1.5 1.5 1.4 1.4 1.5
Germany 2.0 1.6 1.7 1.7 1.7 1.7
France 2.0 1.0 1.5 1.4 1.6 1.6
Italy 3.0 1.5 1.7 1.2 1.2 1.3
UK 2.8 2.6 2.0 1.8 1.7 1.8
EU27 2.6 1.7 1.7 1.6 1.6 1.7
Asia
Japan 0.0 0.3 2.0 1.3 1.4 0.7
Emerging Asia, excl Japan 4.8 5.0 5.3 5.2 4.7 4.4
China 2.6 2.5 2.9 2.9 3.0 3.0
India 9.3 10.7 9.0 8.1 7.3 6.6
World 3.6 3.3 2.5 2.3 2.2 2.0
Exchange Rates
US$ Effective 73.48 75.96 79.18 83.09 83.76 83.44
$/€ 1.29 1.32 1.27 1.20 1.18 1.18
¥/$ 79.81 96.83 103.00 112.50 113.13 111.03
Commodity Prices
Brent Oil ($/bl) 111.7 107.8 102.6 105.0 107.8 111.5
Summary of International Forecasts

Eurozone Economy
This year should see the Eurozone recovering to positive (albeit modest) growth after
two years of contraction, but the pace of recovery is likely to be very different across the
member states.
Divergence is nothing new, but the divide is no longer a simple one between ‘core’ and
‘peripheral’ countries. While the outlook remains relatively positive for Germany, Ireland
and, to a lesser extent, Spain, it is bleak for France, Belgium and Finland, mainly for
structural reasons.
External demand will play a key part in the forecast recovery in the Eurozone this year.
Helped by stronger US growth, we expect strengthening exports – which are forecast to
contribute 1.5 percentage points to growth this year, up from 0.5 percentage points in
2013.
As the year progresses and the recovery becomes more entrenched, domestic demand
should start to pick up too. However, two major hurdles, which will not be overcome this
year, will prevent stronger domestic spending. First, while unemployment should
stabilise this year, it will do so at a high level - forecast GDP growth below 1% leaves no
room for net job creation. Second, businesses are likely to face continued tight credit
conditions, constraining their ability to invest.
One source of upside risk to domestic spending is on the government side. With much
less pressure from financial markets and the European Commission, governments may
allow some fiscal slippage.
Eurozone monetary policy may markedly diverge from US policy over the course of
2014. While the Fed is preparing to reduce the level of monetary stimulus, the ECB
could well ease monetary policy further especially given very low inflation. This was
hinted at during the January ECB press conference although what form monetary
easing could take is unclear.
-1.5
-1.0
-0.5
0.0
0.5
1.0
1.5
2.0
2.5
3.0
2010 2011 2012 2013 2014
Eurozone: GDP growth
% year
Source : Oxford Economics/Haver Analytics
Baseline
Resumed
government
spending
Forecast

UK Economy
While the latest set of national accounts left the most recent quarterly growth rates
unchanged, there were some sizeable upward revisions to 2012 and early 2013. The
growth rate for 2012 was revised up by 0.2 percentage points, while the annual growth
rate for Q3 2013 was upgraded from 1.5% to 1.9%. We have long argued that the GDP
data have understated the strength of the recovery, particularly in the period since mid-
2011, given its lack of consistency with a range of other sources, most notably the labour
market data and business surveys. These revisions go some way to reducing the size of
this discrepancy, although we would not be surprised to see further upward revisions to
the history over subsequent releases.
The monthly output data already published and the business survey results suggest that
the economy is likely to have grown by around 0.8% in Q4 2013, a similar growth rate to
the previous two quarters. The PMI surveys have remained very strong, implying a
stronger outturn, while other surveys have offered encouragement that the recovery is
starting to broaden out towards exports and business investment. However, recent
consumer data have been patchier, with retail sales growth slowing and evidence that
retailers were forced to discount heavily prior to Christmas to try and attract consumers.
The labour market has continued to perform strongly and with unemployment now at
7.4% on the ILO measure, the MPC will soon have to decide on the future of ‘forward
guidance’. Recent soundings from the MPC have given the impression that they would
like to keep rates on hold for as long as possible, so we expect Bank Rate to remain at
0.5% throughout this year with the unemployment threshold likely to be lowered to 6.5%.
However, given the strong momentum building behind the recovery we now expect the
first rate hike to come in Q3 2015, rather than mid-2016.
25
30
35
40
45
50
55
60
65
2005 2006 2007 2008 2009 2010 2011 2012 2013
UK: Purchasing managers surveys
% balance*
Source : CIPS/Markit
Construction
activity
Manufacturing
activity
Services business
activity
*value over 50 indicates
rising activity

-10
-8
-6
-4
-2
0
2
4
6
8
2003 2005 2007 2009 2011 2013 2015 2017
% quarter annualised
Source: Oxford Economics
US: GDP growth
Forecast
US Economy
Real GDP growth was revised up to 4.1% annualized in the third quarter with final
sales growing 2.5% and inventories providing a 1.7% boost. Some inventory
decumulation is likely to have occurred in Q4, with additional drag from the
government shutdown, but we nevertheless estimate growth will have remained
relatively robust at 3.4%.
Domestic activity data at the end of 2013 was relatively strong, implying more robust
final sales and less inventory drag than initially estimated in Q4, with some of the latter
pushed into Q1 2014 instead.
A particularly bright spot among recent indicators has been consumer spending.
December’s weak payrolls gains raise some questions about the durability of the
stronger trend in consumption, but we still view the labour market as generally
supportive for consumer spending – we forecast payrolls gains to average just under
200,000 per month in 2014.
Improving real earnings along with stronger private sector confidence should continue
to support spending. After 4.2% annualized consumption growth in Q4 we expect
consumer spending to rise by over 3% in both 2014 and 2015.
Meanwhile, the housing recovery should continue in 2014 with residential investment
providing a reasonable 0.3 percentage point boost to the economy (down from 0.4
percentage points in 2013).
On the policy front, the bipartisan budget deal struck at the end of 2013 will reduce the
fiscal squeeze in 2014 as sequester spending cuts will be less than initially
anticipated. We expect the deal will reduce the drag from fiscal policy by 0.3% of GDP
in 2014.
The Fed announced a first round of tapering at the end of last year. We expect
tapering to take place throughout the year, and end in Q3 although the pace of
tapering will be data-dependent. The first federal funds rate hike remains about six
quarters away.
Overall, we foresee real GDP growth of 1.9% in 2013 and 3.1% in 2014, the latter a
modest upgrade stemming from stronger private sector momentum at the end of 2013.

Japanese Economy
The Japanese economy continues to expand at a solid pace, with indications of
activity picking up ahead of the first planned consumption tax in April. Retail sales
rose a steep 1.9% on the month in November and we expect ‘last minute’ demand
to boost consumer spending and also housing activity through Q1 2014 – though
there will be a payback later in the year.
The external picture also seems to be brightening. November saw a strong rise in
export volumes – including a marked pick-up in exports to China, which were
relatively weak in most of 2013. The external sector should also benefit from the
further weakening of the yen of around 5% since November of last year.
Survey evidence such as the Tankan report suggests the economy will continue to
expand in the near term, but concerns remain about the durability of the current
upturn. In particular, the consumption tax rises in 2014-15 are likely to constrain
consumer spending, especially in the face of sluggish wage growth.
Labour market conditions are gradually improving, however, with some surveys
now suggesting incipient labour shortages – ultimately this should translate into
higher wages. Meanwhile inflation has continued to move into positive territory,
reaching 1.6% in November, and the disappearance of deflationary conditions
should encourage firms to be more open-handed in terms of wages and
investment.
Overall, we expect GDP to expand 1.8% this year and 1.4% in 2015. Key to this
forecast, however, is further monetary easing (beyond that currently planned) and
exchange rate weakness. Without this, there is a risk that the successes of
‘Abenomics’ so far could evaporate as the consumption tax rises start to bite.
25
30
35
40
45
50
55
60
2007 2008 2009 2010 2011 2012 2013
Japan: PMIs
PMI index
Source : Markit
Services
Manufacturing Values above 50 indicate
expansion in activity; values
below 50 indicate contraction

0
20
40
60
80
100
120
140
160
180
200
2001 2003 2005 2007 2009 2011 2013
US$bn (seasonally adjusted)
Source: Haver Analytics
China: Trade
Exports
Imports
-6
-3
0
3
6
9
12
15
18
1990 1994 1998 2002 2006 2010 2014 2018
%
F'cast
GDP
Net exports
Domestic
demand
China: Contributions to GDP
75
80
85
90
95
100
105
110
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Dec Jan
India
Indonesia
Brazil
Turkey
Index (Dec 31, 2012 = 100)
Emergers: Exchange rates v US$
appreciation
Emerging Market Economies
Jitters in China’s banking sector pushed short-term lending
rates up at the end of last year, prompting the central bank to
inject liquidity. We expect further banking stress this year, as
the Fed begins to slow its pace of monetary stimulus, with
contagion potentially spreading to other emerging markets.
But a draft bill on changes to shadow banking and stronger
financial regulation shows that the authorities are tackling
these concerns.
China’s domestic economy continues to expand fairly
strongly, with steady growth in industrial production, retail
sales and new orders. End-year trade statistics confirmed
that demand for Chinese exports is improving modestly. We
forecast GDP growth of 7.3% in 2014, slightly lower than the
7.6% estimated for 2013. If banking sector stresses can be
contained, activity could be higher. There is a danger;
however, that growth in China will slip back into the more
comfortable mode of heavy industry and investment-led
expansion into the western provinces without enough focus
on developing the service sector and moving up the value-
added chain.
Although China’s exports picked up again in December, this
has not yet provided a strong boost to the rest of Asia.
Korean export growth increased from 2.9% on the year in Q3
to 4.8% in Q4, but in Taiwan the decline in exports deepened
to 1.1% on the year in Q4. Demand for electronics remains
fairly weak, and a cheaper Japanese yen is also eroding
price competitiveness. Manufacturing PMIs for both countries
for December were strong though, with Taiwan’s new order
growth reaching a 35-month high. We expect a gentle
improvement in activity in the much of the region.
Thailand is a key exception, where continued political
protests threaten to invalidate the general election in
February. Even if the election takes place, political stalemate
risks giving rise to a military coup. Domestic activity was
already sluggish before the protests began in November; the
most recent unrest will further delay any recovery. We have
cut our 2014 GDP growth forecast to 3.4%, down from 4.1%,
and now estimate GDP to have expanded by just 2.6% in
2013.

Indonesia’s financial markets were among the world’s worst
performers in 2013, with the currency and stock market each
falling around 20% since May, even though the domestic
economy is strong and we estimate that GDP grew 5.7% last
year. A large current account deficit approaching 4% of GDP,
high inflation and the need for economic reform make it
vulnerable to capital flight. Rising exports should improve the
current account and help stabilise the exchange rate, but
without deep-seated reforms, growth will be limited to 5.4%.
India’s currency has stabilised in recent weeks, but inflation is
still high and the domestic economy has little momentum. The
December PMIs indicated that although manufacturing
production expanded, services output fell. Helped by a weaker
rupee, we expect GDP growth to pick up a little in 2014 to
4.9%. But prolonged uncertainty over elections in May and tight
monetary policy will limit the scope for further upside.
Uncertainty in the run-up to Brazil’s October elections will
continue to stifle investment growth and business confidence.
There may be further political protests, and lack of scope for
fiscal policy stimulus, on top of tight monetary policy, will
undermine growth. Inflation reached 5.9% in December; a rise
in regulated prices this year will keep it high despite tight
monetary policy. We forecast GDP growth of just 1.7% in 2014.
Industrial production in Mexico was up just 0.1% on the month
in November, but the HSBC PMI for December rose to 52.6,
the strongest improvement in business conditions since
February. Rising manufacturing exports suggest better external
demand, which should pave the way for an improved domestic
economy.
Recent political scandals in Turkey have raise questions about
the stability of the government. But the economy continues to
grow, in spite of the deterioration in financial conditions since
mid-2013. The need for large amounts of external financing to
cover the current account deficit, at a time when foreign
investors are less willing to take risks, has pushed the currency
lower against a background of higher inflation and more costly
credit. We therefore expect only modest growth of 3.3% in GDP
this year, with downside risks if the government faces more
political pressure.
-3
0
3
6
9
12
15
18
21
2000 2002 2004 2006 2008 2010 2012 2014
% year
Source: India Ministry of Commerce & Industry
India: Inflation
Food components
of WPI
Total WPI
CPI (industrial
workers)
-16
-12
-8
-4
0
4
8
12
1997 1999 2001 2003 2005 2007 2009 2011 2013
% year
Brazil
Latin America: Monthly GDP
3 month moving average
Mexico
Argentina
Chile
-25
-20
-15
-10
-5
0
5
10
15
20
1990 1993 1996 1999 2002 2005 2008 2011 2014 2017
% year
GDP
Industrial
production
F'cast
Turkey: GDP and industrial production

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
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
Economic indicators and terms
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
GDP Gross Domestic Product. The value of goods and services produced in a given economy
LCU Local Currency Unit. The national unit of currency of a given country, e.g. pound, euro, etc.
PMI Purchasing Managers’ Index. Indicator of producers’ sentiment and the direction of the economy
PPI Purchase Price Index. Measure of inflation of input prices to producers of goods and services
PPP Purchasing Power Parity. An implicit exchange rate which equalises the price of identical goods
and services in different countries so they can be expressed with a common price.
QE Quantitive Easing. Expansionary monetary policy pursued by Central Banks involving asset
purchases to reduce bond yields and increase liquidity in capital markets.
G7 Group of seven industrialised countries comprising US, UK, France, Germany, Italy, Canada, Japan

ETC Member Organisations
Austria Austrian National Tourist Office (ANTO)
Belgium Flanders: Tourism Flanders
Wallonia: Tourist Office for Wallonia-Brussels
Bulgaria Bulgarian State Agency for Tourism
Croatia Croatian National Tourist Board (CNTB)
Cyprus Cyprus Tourism Organisation (CTO)
Czech Republic CzechTourism
Denmark VisitDenmark
Estonia Estonian Tourist Board - Enterprise Estonia (ETB)
Finland Finnish Tourist Board (MEK)
Germany German National Tourist Board (GNTB)
Greece Greek National Tourism Organisation (GNTO)
Hungary Hungarian Tourism Plc.
Iceland Icelandic Tourist Board
Ireland Fáilte Ireland and Tourism Ireland Ltd.
Italy ENIT – Agenzia Nazionale del Turismo
Latvia Latvian Tourism Development Agency (TAVA)
Lithuania Lithuanian State Department of Tourism
Luxembourg Luxembourg National Tourist Office (ONT)
Malta Malta Tourism Authority (MTA)
Monaco Monaco Government Tourist and Convention Office (DTC)
Montenegro National Tourism Organisation of Montenegro
Norway Innovation Norway
Poland Polish National Tourist Office (PNTO)
Portugal Turismo de Portugal, I.P.
Romania Ministry of Regional Development and Tourism
San Marino State Office for Tourism
Serbia National Tourism Organisation of Serbia (TOS)
Slovakia Slovak Tourist Board
Slovenia SPIRIT Slovenia
Spain Turespaña - Instituto de Turismo de España
Sweden VisitSweden
Switzerland Switzerland Tourism (ST)
Turkey Ministry of Culture and Tourism

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