World tourism barometer

World international tourism continues to grow above average in the first four months of 2016

World international tourism continues to grow above average in the first four months of 2016

2016 started on a strong note for international tourism. International tourist arrivals grew by 5 per cent between January and April 2016 according to the latest UNWTO World Tourism Barometer. Results were robust across almost all subregions and many destinations reported double-digit growth. Prospects for May-August remain positive, with around 500 million tourists expected to travel abroad in the Northern Hemisphere summer holiday peak season.

Destinations worldwide received 348 million international tourists (overnight visitors) between January and April 2016, some 18 million more than the same period last year (+5.3 per cent). This follows an increase of 4.6 per cent in 2015, and could make 2016 the seventh consecutive year of above-average growth, with international arrivals increasing by 4 per cent or more every year following the crisis in 2009.

“Results show a strong desire to travel and this continues to drive tourism growth. Destinations keep benefitting from solid demand across all world regions despite ongoing challenges, showing that tourism is a dynamic and resilient economic sector,” said UNWTO secretary-general Taleb Rifai.

“Yet, despite these good results, the tragic events of recent months remind us that safety and security remain a major challenge for all. We must continue to work closely together to address this global threat and ensure tourism is an integral part of emergency planning and response at global, regional and national level” added Rifai.

By region, Asia and the Pacific (+9 per cent) recorded the highest increase in international arrivals, with all Asian subregions enjoying growth of 7 per cent or above. By subregion, Subsaharan Africa (+13 per cent) led growth, strongly rebounding from previous years’ modest results.

UNWTO forecasts international tourist arrivals to increase by 3.5 per cent to 4.5 per cent over the full year 2016, in line with UNWTO’s long-term projection of 3.8 per cent growth a year for the
period 2010 to 2020.

Results by region

Asia and the Pacific (+9 per cent) recorded the highest growth in international arrivals across world regions in January-April 2016, with robust results in all four subregions. South-East Asia and Oceania both achieved 10 per cent growth, while arrivals in North-East Asia increased by 8% and in South Asia by 7 per cent. In Africa (+7 per cent), international tourist arrivals experienced a clear rebound in Subsaharan Africa (+13 per cent), while in North Africa results were down by 8 per cent.

In the Americas (+6 per cent), all four subregions continued to enjoy significant growth in the first four months of 2016, led by Central America and South America (both at +7 per cent). Arrivals in the Caribbean (+6 per cent) and North America (+5 per cent) were fuelled by continued strong outbound demand from the United States, where tourism expenditure increased by 9 per cent through May. Europe (+4 per cent), the world’s most visited region, consolidated its healthy growth of recent years with Northern Europe and Central and Eastern Europe (both at +6 per cent) in the lead, followed by Southern and Mediterranean Europe (+4 per cent) and Western Europe (+3 per cent). International tourist arrivals in the Middle East are estimated to have declined by 7 per cent through April according to available information.

Results for both Africa and the Middle East should be read with caution, as they are based on currently limited data available for these regions.

Prospects remain positive

UNWTO estimates that some 500 million tourists will travel internationally between May and August 2016, the Northern Hemisphere summer holiday peak season, accounting for about 41 per cent of the year’s total international tourist arrivals.

According to the UNWTO Tourism Confidence Index, prospects for May-August 2016 remain positive and in line with the performance of January-April. The Index shows confidence is highest in Europe, followed by the Americas.

On the positive side, Brazil is looking forward to the 2016 Summer Olympics in Rio de Janeiro in August. A downside is that security concerns remain high on the agenda. Furthermore, the United Kingdom’s vote to leave the European Union in the recent referendum (‘Brexit’) has raised uncertainty in the market and led to a substantial depreciation of the UK pound Sterling. However, UNWTO does not expect this to have a significant impact on international travel in the short term.

India

As per the UNWTO Barometer (Volume 14, May 2016), during 2015, India ranked 40th in terms of international tourist arrivals. As per the Second Tourism Satellite Account of India – 2009-10 and subsequent estimation for the next three years namely 2010-11, 2011-12 and 2012-13, the contribution of tourism to total employment in the country during 2009-10, 2010-11, 2011-12 and 2012-13 were 10.17 per cent, 10.78 per cent, 11.49 per cent and 12.36 per cent, respectively.

The Foreign Tourist Visits (FTVs) during 2015 was highest in West (30.6 per cent) followed by South (29.1 per cent), North (28.4 per cent), East (11.4 per cent) and North East (0.5 per cent). The region-wise number of FTVs during 2013, 2014 and 2015 is also given below.

As per the report of the ‘Working Group on Tourism’ for the 12th Five Year Plan (2012-2017) set up by the then Planning Commission, the requirement of additional hotel rooms under classified category in 2016 over 2010 is estimated to be 1,90,108.

Construction of hotels is primarily a private sector activity. The ministry of tourism, however, has advised the state governments/ UT administrations to follow tourism friendly policies for augmenting hotel room supply like allotting land sites for hotels on revenue sharing basis, granting extra Floor Space Index (FSI)/ Floor Area Ratio (FAR) for hotels, adopt Single Window approach for clearing hotel projects, rationalisation of taxes, etc.

To encourage the growth of budget hotels, the following incentives were announced by the government:

  • Extension of investment linked tax incentives under Section 35AD of the Income Tax Act to new hotels of  two-star category and above anywhere in India, which will facilitate growth of accommodation in the country.
  • The Reserve Bank of India (RBI) has de-linked credit for hotel projects from Commercial Real Estate (CRE), thereby enabling hotel projects to avail credit at relaxed norms and reduced interest rates.
  • Hotel and tourism related industry has been declared a high priority industry and Foreign Direct Investment (FDI) is allowed upto 100 per cent under the automatic route.

The ministry of finance has also included the following in the ‘Harmonised list of Infrastructure Sub Sector’ to boost supply of hotel rooms in the country:

  • Three – star or higher category classified hotels located outside cities with population of more than one million.
  • Hotels with a project cost of more than Rs 200 crore each in any place in India and of any star rating.

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