According to World Tourism Organization (WTO) estimates, the number of international tourist arrivals reached 940 million in 2010, or a 39% increase over 2000. Seen over the longer term, growth has been exponential; only 25 million tourists travelled in 1950.

Since the WTO compiles national statistics, methodologies may vary. For this reason, results must be interpreted with caution. In addition, results for the year 2010 were estimated based on partial data.

Top-ranked destinations

Not only has the ranking of destinations changed dramatically over the years, the sheer number of countries visited by tourists has increased tremendously. Here are some interesting observations about the number of international arrivals at the most popular destinations (Table 1):

• The top 5 countries in the ranking accounted for 71% of all arrivals in 1950, and only 31% in 2010.
• The “Other” category, which represents the next ten destinations in the ranking, accounted for only 3% of arrivals in 1950, but rose to 34% in 1990 and 44% in 2010!
• Canada’s ranking dropped from 2nd in 1970 to 8th in 2000, and finally to 15th in 2010.
• China is not only a very active outbound market; it has also become an extremely popular destination.
• Malaysia, Turkey and Hong Kong have made major inroads into the tourism market.
• The tourism sector has been demonstrating its resilience for over 60 years.

The top six destinations have remained been more or less the same since the year 2000. France enjoys a comfortable lead and China – which outranked Spain in 2010 – is now closing in on the United States. Canada has not been one of the top ten destinations since 2004.

Graphs 1 and 2 illustrate, respectively, the top 20 destinations by international tourist arrivals and by international tourism receipts. The two rankings differ somewhat. In terms of tourism receipts, the United States is in the top position, well ahead of second-ranked Spain, which also outranks France. While some countries occupy similar rankings in both graphs, others appear in one and are completely absent from the other. Countries that rank in the top 20 of arrivals but not in receipts are the Russian Federation (27th), Poland (30th), Ukraine (50th), Greece (21st) and Egypt (22nd). Conversely, some countries have high tourism receipts for a relatively lower number of visitors: the Netherlands (21st), Switzerland (28th), Japan (29th), Australia (41st) and India (42nd).

In fact, not all countries have benefitted from the overall growth in international tourist arrivals. Graph 3 illustratesthe change in arrivals for various countries. While some have more than doubled the number of arrivals, others, like Canada (-18%) and Poland (-28%), have recorded major decreases.

Where do most travellers come from?

Europe is currently the top source market for tourists, generating 55% of all international tourists, followed by Asia and the Pacific (20%) and the Americas (16%) (Table 2). Asia and the Pacific, the Middle East and Africa recorded the strongest average annual growth rate for the period covered. The majority of international visitors, approximately four out of five, travel within their own region. However, it would appear that the number of trips from one region to another has increasedat a faster rate than the number of intraregional trips. Industrialized countries remain the primary source markets of international tourists. However, with the increase in disposable income, many emerging economies have experienced higher growth rates in the past few years.

The data in Table 3about tourist-generating countries is expressed in terms of international tourism expenditures, as published by the WTO, not in terms of number of trips. Total spending grew from US$478 billion in 2000 toUS$678 billion in 2005and to US$850 billion in 2009, for an overall increase of 78%. In 2009, source markets saw their international tourism expenditures fall 10% compared to 2008, due to the economic crisis and the H1N1 flu. In 2000, only 10 countries recorded international tourism expenditures of at least US$10 billion, while 23 countries did so in 2009.

The top three spots have been occupied by Germany, the United States and the United Kingdom since 2000, with France, Italy and Japan following close behind.The explosive growth of the Chinese travel industryhas pushed it into the top five even though its population has only just begun to travel. Chinabegan signing agreements in 1999 to permit leisure travel to various countries, but Canada has only very recently obtained the status of an authorized destination (June 2010). The Chinese still travel a lot within their own country, but the proportion of domestic trips to those outside the country has risen from 71 to 1 in 2000 to 38 to 1 in 2009.

Japan is the only country in the ranking below to have reduced its international tourism expenditures. Hard-hit by economic woes and fuel prices, the population has lost some confidence and travels less than before.

The Russian Federation, Saudi Arabia, Belgium, Australia, Singapore, Norway and Brazil more than doubled their spending during this period.

In short, the tourism market is constantly changing and welcoming more participants so it is easy to get lost in the crowd. The good news? The number of tourists from various regions around the world is growing constantly. We live in an age where physical distances are less intimidating than before and where tourists are choosing to travel just about everywhere. We must design our tourismstrategies to reflect a broader geographic perspective and not be afraid to compete with top-ranked destinations.

Sources:

- World Tourism Organization. “World Tourism Barometer, Interim Update April 2011.”

- World Tourism Organization. “Tourism Highlights, 2009 Edition.”

Leisure travel

In 2006, leisure travel will continue to drive tourism growth. According to some US experts, rest and relaxation motivate more than half of all leisure travellers. Destinations like spa resorts and those offering a stress-free atmosphere look the most promising. A recent Tripadvisor.com survey showed that 50% of the 3000 respondents planned to take a spa vacation in the next year. With short stays still in vogue, the challenge facing the industry is to offer the most relaxation within the shortest amount of time.

Visits to national parks will rise, while attendance at amusement parks will drop. The cruise industry should continue its upward climb and enjoy an excellent year, notably due to the launch of new boats and the growing popularity of this product among families. Timeshares on cruise ships have been identified as a promising new trend in the coming years.

Cities that emphasize fun and a wide variety of activities within a small area – ideally within walking distance – are likely to attract more travellers. And, finally, the increased demand for leisure travel has led experts to encourage consumers to reserve early to ensure that what they want is available at the desired time.

Business travel

North American business travel will enjoy a good year with projected growth of 5% in 2006, compared to the 4% recorded in 2005. This increase will be driven primarily by the meetings and conventions sector. However, for their daily corporate needs, business people continue to seek alternatives to having to travel for business.

Recent forecasts from Meeting Professionals International (MPI) confirm a 7% increase in meeting expenditures and the number of events for next year. This forecast is based primarily on national markets, because American and European organizers do not expect more events to be held at international destinations. In Canada, the number of visitors attending American conventions should remain stable.

Good news for suppliers: MPI anticipates that convention lead times will begin to increase. In 2006, it is estimated that lead times will grow by nearly 40%, translating into an additional two or three months between the invitation to tender and the event date.

Hotels

In North America, increased demand and slow growth in supply means average room rates should continue to rise in 2006. The upscale and luxury sectors in particular should benefit from this situation. Furthermore, in 2006, the hotel industry, like all travel and tourism sectors, will face the dual challenge of staff shortages and human resource management. According to a recent US study, 25% of hotel industry employees are dissatisfied with their jobs and 32% of these people would like to find a new job in the next year. The year 2006 is also likely to be challenging for hotel owners in major US cities because many collective agreements are up for renewal.

Transportation

Pressures on the North American airline industry will persist as discount carriers continue to invade the traditional routes of the major airlines. In this competitive environment, ticket prices will remain low, but an expected increase in fuel prices (combined with fewer available seats) should nudge average prices higher among regular carriers. There will also be an increase in the number of pay-per-use in-flight services (pillows, blankets, meals, snacks, etc.).

As for airports, we should see an increase in the services offered to travellers. The addition of shops, restaurants, gyms, beauty salons and professional services are some of the tactics being adopted by airport managers to diversify revenue sources and improve the customer experience.

In 2006, the Airbus A-380 will begin commercial flights. The world?s largest passenger jet, the two-storey airplane will be the first to offer on-board areas for socializing.

In the United States, train travel will grow in 2006. Improved services and schedules, and especially the opportunity to transform travel from a utilitarian role into an experience unto itself, have piqued consumer interest in this service, especially among Generation X travellers.

Technology

Travellers, both business and leisure, are increasingly demanding the opportunity to “plug in” anywhere and any time. Hotels, resorts, convention centres, airports and various types of public transit will intensify their efforts to provide high-speed internet access (for free, if possible!). Sometime in the year 2006, US airlines will begin offering wireless in-flight internet access.

Increased internet use by consumers continues to revolutionize the marketing and distribution of travel products and services. In 2006, the number of online transactions will continue its strong growth. The firm PhoCusWright predicts that by the year 2007, 40% of all travel-related purchases in the United States will take place online.

Furthermore, tourism now constitutes a growing presence on major search engines (Google and Yahoo) and general online shopping sites (Pricegrabber). With more comparison tools now available, the resulting price transparency is forcing suppliers to work even harder on their brands, since the consumer?s perception of value is a combination of price and supplier image.

Tourism marketing should attach greater importance to the internet. It is expected that the concepts of “best price guaranteed”, dynamic packaging and search engine positioning (pay-per-inclusion) will grow in popularity. Experts are also pointing to the growing popularity of internet-related media like blogs and instant messaging. Individuals will have a fast and growing influence on the commercial success of products and services.

Destinations

At this point in the year, China is still the destination that excites the most interest and curiosity. According to guidebook publisher Lonely Planet, this country heads the list of hot destinations, followed by Mali, Brazil, Iceland and Serbia & Montenegro. As for destinations offering exceptional value, the publisher puts Argentina at the top, followed by New Zealand, Morocco, India and Mexico.

In Europe, according to American Express, Great Britain, France and Italy remain the most popular destinations for Americans. However, Eastern Europe continues to attract a lot of interest, particularly the countries on the Adriatic Riviera (Croatia, Slovenia, Montenegro), which are a less expensive alternative.

Sources:
- Armstrong, David. “Travel, Tourism Bouncing Back – Conventions and Visitors Returning, but Room Rates and Airfares Are Going Up,” San Francisco Chronicle, January 8, 2006, p. J1.
- Cruise Lines International Association. “Cruise Industry Trends for 2006,” [Traveldailynews.com], January 16, 2006.
- Grossman, David. “What’s in Store for Business Travelers in 2006?” USA Today, January 9, 2006.
- Harpaz, Beth J. “2006 Hot Spots Include Colorado, China & Croatia,” Associated Press, [CNN.com], December 29, 2005.
- Jones, Steve. “Steady Growth Forecast for Business Travel,” [Travelmole.com], January 3, 2006.
- Meeting Professionals International. “Meetings Industry to Grow in 2006,” [4hoteliers.com], January 11, 2006.
- Randall, Judy. “Top Travel Trends for 2006,” The Charlotte Observer, December 25, 2005.
- Sloan, Gene. “China, the New Croatia?” USA Today, January 5, 2006.
- Westenberg, Kerri. “Travel Trends: Where it’s at in 2006,” [StarTribune.com], January 2, 2006.
- Yesawich, Pepperdine, Brown & Russell. “Ten Trends to Watch in the Year Ahead,” [ehotelier.com], December 30, 2005.
 

Gen Y hybrid consumers will use price transparency provided by the Internet and the euro to combine five-star hotel accommodations with low-cost flights, both reserved at discount travel sites. Although practitioners of conspicuous consumption, the Millennial Group sees no contradiction in following a 5-minute lunch at McDonald’s with a 5-hour dinner chez Ducasse. New concepts of value for money will result in consumers mixing and matching products to satisfy their desire of the moment.

Merger and acquisition activity in the hotel sector will continue at a torrid pace. Starwood’s recent purchases of Meridien and Société du Louvre, the Fairmont-Raffles merger and the reunification of Hilton are precursors of the rapid consolidation ahead.

Multi-brand lodging companies will further capitalize on the reputations of their flagship properties to create upscale product groups using brands such as St. Regis, Waldorf-Astoria and Crillon. These super-luxury properties will justify stratospheric rates by offering enhanced amenities and employing database technology to introduce new standards of service excellence.

As budget airlines emerge in new geographic regions, they will expose the long-ignored fact that air transport is a commodity where low-cost leaders are most profitable. Investors who shied away from traditional carriers will find confidence in these new airlines as manifested by Ryanair’s ranking of maintaining the second highest market capitalization of European airlines (behind Air France-KLM).

While travelers become increasingly accustomed to living in an unsafe world, security will play a significant role in selecting leisure destinations. Disease, crime, air safety and terrorism will become important criteria for holidaymakers planning trips abroad.

While Mr. Chevrier provides a broad optimistic forecast for North America, other destinations will manifest greater variations in demand. In Europe, the United Kingdom, Austria and the Netherlands will see increasing growth in their business and leisure markets while Poland, Germany and Sweden will struggle to fill hotel rooms and tourist facilities. François Chevrier cites the growing attraction of China and India but Asian tourism markets such as Indonesia, Sri Lanka and Nepal will suffer from political instability.

In 2006, analysts, scholars and industry leaders will discover the meaning of Albert Einstein’s observation that “The only constant in the universe is change”.

Water play

One segment in particular seems to be enjoying exceptional growth: indoor waterpark/hotel resorts. Although this trend could be a passing fancy, recent developments in this sector are too significant to ignore.

In North America, hotels with indoor waterparks are becoming increasingly popular and will continue to develop at a faster rate than the traditional hotel sector. In fact, according to some experts, in 2005 this new type of resort will experience an annual growth rate of 23% to 29%, while traditional hotels will only grow 1.3%.

Many facilities have already opened their doors and more are on the way. For example, in January 2005, Ripley Entertainment broke ground on a hotel/waterpark/aquarium complex in Niagara Falls.

This CA$200-million project is one of Ontario’s latest major family resort destinations. Covering 25 acres (10.1 hectares), the complex will include a 406-suite hotel (the Great Wolf Lodge), an indoor waterpark and an aquarium (to be built in 2006). Once the entire development is completed, it is expected to draw 2.5 million people annually.

Like the city of Orlando, Florida, Niagara Falls is developing at an incredible pace. Over the past few years, various tourist projects have transformed this small industrial town into a veritable vacation destination. Over 40 hotels and motels have been built in the past decade and the tourism industry pumps more than CA$1.73 billion into the local economy each year.

When asked about changes in the theme park industry, Philippe Pichon, Director of Development for Grévin & Cie in France*, emphasizes that locating a hotel near attractions (aquarium, waterpark, shopping mall, casino, museums, restaurants, etc.) creates a “one-stop shopping” effect that keeps customers on-site for an additional day or two. Captive visitors tend to take part in “local” recreational activities and stay close to the hotel.

In the medium term, it would not be surprising if this type of pairing (hotel/indoor waterpark) also became popular at winter sports resorts, golf courses, convention centres, etc.

Other changes on the horizon in 2005

• Technology. According to Philippe Pichon, European parks are not likely to scramble for high-tech additions. Such a strategy requires a level of investment that only the United States can afford. Along these lines, in January 2005, LegoLand California announced it would build five new attractions at a cost of US$5 million, thanks to a significant increase in earnings in 2004 (+11%).
• The China factor. China represents an enormous potential market, but it is uncertain whether it will turn out to be the expected windfall because only a small portion of its population can afford to visit a theme park. Mr. Pichon believes that it would probably be more profitable to develop recreational projects designed especially by and for the Chinese. Activities should be based on the Chinese culture and admission fees should be adapted to the Chinese standard of living. However, American amusement parks like Disneyland are unquestionably very popular among Asian tourists.
• Distribution channels. Distribution channels are not likely to undergo any major changes. However, theme park operators could use the Internet more efficiently to enhance customer loyalty through targeted marketing campaigns.

The year 2004 in review

According to recent estimates from trade magazine Amusement Business and research firm Economic Research Associates, attendance at the United States’ 50 top amusement parks jumped nearly 4%, the first significant increase since the terrorist attacks of 2001 (this compares to the 2.2% rise recorded for the world’s 50 most-visited parks).

Some reasons behind this increase are the weaker US dollar (which probably encouraged European tourists to stay longer and spend more) and the desire of Americans to stay close to home.

Major amusement parks are fighting a fierce battle for customers: millions are spent on new attractions each month, each one larger and more modern than the next. For example, the Six Flags Group has announced five new “adventure” rides for its parks, including the Halfpipe, a U shaped, 100 foot high roller coaster in Denver, Colorado.

There is also the growing phenomenon of Retailtainment (a combination of retail and entertainment) (for more information, see Les parcs à thèmes en Amérique du Nord: maturation, consolidation et diversification). By transforming an entire shopping mall into an adventure, operators can hold the interest of both local and foreign visitors for several hours.

In Europe, the year was marked by two phenomena: profit margins dropped 7 to 9% and attendance fell. This was due to poor weather and the fact that demand was spread among an increased number of European products. Fortunately, average spending increased, which helped maintain overall sales.

As for the theme-park clientele, it is ageing. Although the children of baby-boomers are taking their own young families to amusement parks, these children are still too young – 0 to 10 years old – to constitute a new, distinct market segment. And teens do not have the purchasing power of baby-boomers. Furthermore, today’s young parents are less attracted to amusement parks. They seek educational opportunities and so prefer theme parks like Vulcania and Futuroscope.

* Grévin & Cie is a French company that operates thirteen recreational facilities (amusement parks, tourist sites, nature and animal parks) in the Netherlands, Switzerland, Germany, Great Britain and France, including Astérix Park and the Bioscope. In 2005, the company intends to pursue its Europeanization strategy. Finally, Grévin & Cie was also the company that wished to purchase Montreal’s La Ronde amusement park in the winter of 2000.

See also

On the web:
- Amusement Theme Parks
- Great Wolf Lodge
- Grévin & Cie
- Futuroscope  

Sources:
- Orlando Sentinel. «Forecast 2005: Theme parks outlook», 10 janvier 2005.
- USA Today. «Attendance at theme parks increases, reversing 2 years of decline», 13 décembre 2004.
- Fink, James. «Ripley’s Great Wolf start $200M N.F., Ont. project», The Business Journal (Milwaukee), 18 janvier 2005.
- Michelmore, Bill. «Indoor water park on tap», The Buffalo News, 15 janvier 2005.
- La Dernière heure. «À la recherche d’armes de distraction massive», 11 juillet 2004.

Commentary from Liping A. Cai

Many amusement parks feature water-based themes or activities, which can be created entirely man-made or staged with the natural setting of a water space. However, not all amusement parks contain water-based themes or activities for visitors; and the latter do not necessarily take place in the context of the former, which are mostly outdoors. Are the indoor waterparks within or adjacent to a hotel complex considered amusement parks? The author, who notes the increasing popularity of indoor waterparks as a trend, seems to believe so. Without engaging in a dispute on the definitions of amusement parks and indoor parks, it is perhaps more conducive to debate the role and trends of water-based themes and activities in developing a destination, be it a beach (lake) community, an amusement (theme) park, or hotel resort.

Water has been a product attribute of a destination as long as there has been leisure travel. It is presented in two major forms to please the senses and desires of visitors and guests. One form is natural, such as a scenic lake or river. The other is man-made, such as fountains and electric-powered waterfalls in an urban park. These two forms are certainly not mutually exclusive. A lakeside resort features both forms. The indoor waterparks and the pairing of hotel and waterparks are more tipped towards the man-made than the natural. A viable topic of inquiry is what underlies the popularity. Is it another me-too fad driven by competition for product differentiation? This is then not the first time that hoteliers have tried a water-based product attribute or amenity – whirlpools and Jacuzzis, indoor fountains and canals, and swimming pools even in the economy and budget hotel sector. Or, is it indeed a trend of an industry to respond to the demands of the market?

Water is life, and makes life itself possible. Water as an attraction to visitors and vacationers in the form of beach, lake, or river is rooted in the human’s dependence on and longing for water. The water flow links nature and humans through water’s many parallel functions as the “blood stream” of both the natural environment and the embedded human environment. Does the popularity of indoor waterparks suggest that the outdoor nature of water is less appealing? Do people seek a more controlled and safer environment to get close to the water flow?

It is very fitting that the author mentions the China factor in a writing that focuses on “water play” at amusement parks and hotels. The Chinese attach a great importance to water in leisure travel. In fact, an age-old Chinese idiom equates the leisure travel to “Touring Mountains and Playing Water”. If water is so significant to the Chinese visitors, then the element of water must be seriously considered in the planning and designing of destinations and recreational projects that target the China market. It is a myth, though, such destinations and projects should adapt admissions fees to the Chinese standard of living. Reports are not lacking that the Chinese traveling outside their Mainland outspend their counterparts from more developed originating countries.

Liping A. Cai
Professor and Director
Purdue Tourism & Hospitality Research Center
Purdue University