The United Nations World Tourism Organisation estimates that in 2016 the number of international tourism arrivals increased at a rate of 3.9% to reach 1,235 million. This represents an increase in the number of international overnight tourists (those who stay in a destination overnight for any reason) of 46 million. This was the seventh consecutive year of sustained growth following the global financial crisis of 2009, and such a sequence of strong growth has not been seen since the 1960s.
At the aggregate level Europe witnessed a 2% increase in international tourist arrivals in 2016 according to initial estimates, but this average hides a very mixed performance across individual destinations. Iceland welcoming 35% more international visitors than in 2015, Norway 13% more and Ireland enjoyed an increase of 11% - helping to put to rest the falsehood that only destinations with guaranteed fine weather can grow their visitor economy.
At the other end of the spectrum there is clear evidence of how safety and security issues can dissuade visitors, with Turkey reporting a 29% drop in arrivals and France (the world’s most visited destination) seeing a decline of more than 5%. The United Kingdom looks set to have mirrored the European average, with an increase of around 2% in international arrivals.
The majority of the UNWTO panel of experts anticipate that international tourism arrivals in 2017 will be either ‘better’ or ‘much better’ than in 2016, with UNWTO forecasting growth at the global level of between 3% and 4% and growth in Europe of between 2% and 3%, with these growth rates being in line with the long term average.
In part these forecasts reflect a belief that the global economy will grow at a slightly quicker pace in 2017 than it did during 2016. There are commentators who believe that the new US Administration will bolster economic activity, especially in the US, whereas others point to uncertainties regarding the damage to global trade that could result from potentially protectionist policies.
Airlines look set to have had a strong year in 2016 with profits boosted by low oil prices and growing consumer demand, however as we enter 2017 there are concerns that a modest revival in the price of oil could impact airlines bottom lines, with this being a particular concern for airlines domiciled in countries that have seen their currency fall in value against the US dollar (the currency in which oil is traded), for example those based in the UK.