ITR (International Tourism Receipts) : Actual ITR | World ITR and GWP (Gross World Product) | World ITR Forecast (S-curve) |

 

line chart and statistics of international tourism receipts in current and constant $US from 1950 through 2011. In 2011 tourism generated revenues of 1,030 billion current $US — 909 billion constant $US (2005=100) — roughly the size of Republic of Korea's GDP (gross domestic product), or the sum of France's and United Kingdom's 2011 merchandise exports. The economic relevance of the industry is unquestionable. At the regional level, Europe is the strongest exporter of tourism services, having been able to attract 517.5 million tourists that generated $US 463.4 billion (409 $US constant, 2005=100) in 2011. In absolute terms the second best  has been Asia and Pacific, with 218.1 million tourists that generated $US 289.4 billion receipts (255 $US constant, 2005=100). Asia and Pacific is also the best performing region, with the highest growth rates both for ITA  and ITR The region resisted the 2008-2011 lean years very successfully.

In 2011 tourism generated revenues of 1,030 billion current $US — 909 billion constant $US (2005=100) — roughly the size of Republic of Korea's GDP (gross domestic product), or the sum of France's and United Kingdom's 2011 merchandise exports. The economic relevance of the industry is unquestionable.

At the regional level, Europe is the strongest exporter of tourism services, having been able to attract 517.5 million tourists that generated $US 463.4 billion (409 $US constant, 2005=100) in 2011. In relative terms, Europe's performance meets the average (1950-2011 growth rate of 7% against 7.1% for the world), but in the last 3 years, since 2008, it has been mediocre, both as regards the number of tourists (growth rate of 2.3% against the world's 2.8%) and especially the volume of tourism receipts (negative change rate of -2.1% against the world's 1.5%). In absolute terms the second best has been Asia and Pacific, with 218.1 million tourists that generated $US 289.4 billion receipts (255 $US constant, 2005=100). Asia and Pacific is also the best performing region, with the highest growth rates both for ITA (1950-2011 growth rate of 12.1%) and ITR (1950-2011 growth rate of 11.9%). The region resisted the 2008-2011 lean years very successfully (ITA growth of 5.8%, and ITR growth of 10.1%). Americas, a traditionally strong tourism provider, take the third rank both in ITA and ITR, and are having a hard time, although not as much as Europe, to cope with the current slowdown.

Trends may be signaling dark clouds in the skies. Indeed tourism business has been growing regularly since 1950, at an annual average rate of 7% (doubling time 10 years), slightly faster than tourist arrivals (6.21%). But tourism receipts have practically crashed with the 2008 financial and economic crises, the average rate receding to a low 1.5% (doubling time 48 years), an even stronger deceleration than the one of tourist arrivals (growth rate of 2.8%) . This means both the braking of the growth of tourist arrivals, and a shrinking revenue per tourist, suggesting a significant spending avoidance trend.

One may be tempted to blame the hard landing on the extraneous economic circumstances. Nevertheless, the latter may explain the contraction only partially. The fact is that growth has been slowing significantly even before 2008. The annual average rate for the period 1980 through 2011 is a moderate 4.7% (doubling time 15 years), and about the same for the period 2000 through 2011 (4.8%). Meanwhile tourist arrivals grew respectively at the falling rates of 4.2% and 3.5%. These figures suggest a decelerating trend of the industry business. Considering the prospects of the current global economic crisis, compounded with the energy crunch that will eventually force transportation prices to reflect the real costs, and the the widening global income distribution chasm between high and low income earners, one can wager that the numbers of tourist arrivals will meet increasing difficulties to keep climbing, causing tourism revenue to lose momentum, and the industry to see its profitability melt.

 

International Tourism Receipts
1950-2011¹

Year

Africa

Americas

Asia & Pacific

Europe

Middle East

World

Current $US billionConstant $US billion, 2005=100Current $US billionConstant $US billion, 2005=100Current $US billionConstant $US billion, 2005=100Current $US billionConstant $US billion, 2005=100Current $US billionConstant $US billion, 2005=100Current $US billionConstant $US billion, 2005=100
19500.10.71.180.040.30.960.030.2214
19600.21.12.5130.21.14210.10.5737
19650.31.53.4170.52.57360.31.51258
19700.52.15201.2511450.41.61874
19751.33.910302.5726770.92.741121
19803.47255211236212947104218
19813.77285313255710948106203
19823.46264613245610024100181
19833.5626461424559648103179
19843.2532531525579658112188
19853.15335416266210147119193
19863.66386121337912546145230
198757436628439915357179276
1988685177375511016446208310
1989686087415915422157266382
1990696996476414319857270374
19916876102486414819857283379
199279841095673172225810327426
199379891146279167213810333425
1994810921167290181226912362453
19959109812181992122601113411503
19961012108130911092252701315446536
19971011114135891052242641416450532
1998101211513578912352741416451527
1999111312013884972342691618465535
20001112131147901022332621820482543
20011213120132931022282511820470518
200212131141231011102422621921488530
20031617114121981052833012324535568
200419201321361301343293392626635656
200522221451451411413483482828683683
200625241541491571523773653029742719
200728271711611891784334083432856806
200830281881732081914744364541944869
200929261661512031854113744238851776
201030271811632552304093695247927835
2011332919917628925546340946411,030909
Average annual change rate 1950-20119.95%6.33%8.90%5.30%15.68%11.87%10.78%7.13%12.77%9.05%10.69%7.04%
Average annual change rate 2008-20112.56%1.11%1.91%0.47%11.71%10.13%-0.72%-2.12%0.66%-0.76%2.95%1.49%
¹ Change of time scale: 1-year scale from 1980 onwards.

 

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Line chart and statistics of ITR compared to GWP (gross world product) and GWP per capita. ITR are strongly associated to the overall economy. The comparison of trends between ITR and GWP shows that ITR have been growing at a much quicker pace than GWP : the 1960-2011 average annual change rate of ITR is 6.5% (doubling time 11 years), against a significantly lower 4.3% (doubling time 16.5 years) for GWP and an even lower 2.6% (doubling time 27 years) for GWP per capita. However, from the turn of the century onwards, tourism revenue growth slowed down. The inflection became stronger after the 2008 global financial and economic crisis. Between 2008 and 2011, tourism receipts grew at the rate of 1.5%, lower than the growth rates of GWP per capita (1.9%,) and GWP  (3.1%).

Since 1960 the tourism business (measured in ITR, international tourism receipts) is strongly associated to the overall economy (statistic r = 0.99). When the economy thrives, tourism revenues blossom, when it softens ITR depress — the R² value of 0.98 says that up to 98% of the variation of ITR is explained by the variation of the economy measured in gross product terms (GWP, gross world product). The same statistics applied to the GWP per capita, taking therefore into consideration the variations of the world population, produce values not very different, only slightly lower : r = 0.97, and R² = 0.94.

Given this close relationship, the comparison of trends between ITR and GWP may provide a good overview of the relative performance of the tourism industry along time. The chart shows the evolution of tourism revenue, GWP and GWP per capita since 1960. The values have been adjusted to inflation by applying the GDP deflator for 2005=100, and the variables were rendered more easily comparable through normalization, making the data point values for 1960 equal to 100.

Mass tourism is a relatively recent phenomenon that took off very fast, growing at a much quicker pace than GWP : the 1960-2011 average annual change rate of ITR is 6.5% (doubling time 11 years), against a significantly lower 4.3% (doubling time 16.5 years) for GWP and an even lower 2.6% (doubling time 27 years) for GWP per capita. However, from the turn of the century onwards, tourism revenue growth slowed down, with a rate below that of GWP : 4.8% against 4.91%, but still higher than GWP per capita (3.66%). The inflection became steeper after the 2008 global financial and economic crisis. Between 2008 and 2011, tourism receipts grew at the rate of 1.5%, lower than the growth rates of GWP per capita (1.9%,) and GWP (3.1%). In other words, comparing ITR to the GWP benchmark strengthens the above-stated conjecture that tourism business stopped its acceleration and initiated a decelerating path.

 

World International Tourism Receipts
compared to GWP (Gross World Product)

Year

World ITR Actuals

GWP

GWP per capita

(Constant $US billion, 2005=100)(Index, 1960=100)(Constant $US trillion, 2005=100)(Index, 1960=100)(Constant $US, 2005=100)(Index, 1960=100)
1960371007.3051002,409100
1961  7.4211022,402100
1962  7.8431072,490103
1963  8.3471142,599108
1964  9.0011232,747114
1965581579.7571342,919121
1966  10.2901413,017125
1967  10.6201453,051127
1968  10.9811503,091128
1969  11.5151583,177132
19707420011.9011633,218134
1971  12.5231713,319138
1972  13.8691903,603150
1973  16.0482204,089170
1974  16.9772324,244176
197512132717.3022374,245176
1976  17.8162444,292178
1977  18.9602604,487186
1978  20.8612864,852201
1979  22.3633065,112212
198021859023.0633165,181215
198120354921.6372964,777198
198218148820.1952764,382182
198317948519.8492724,233176
198418850719.8582724,162173
198519352220.2422774,169173
198623062223.4333214,742197
198727674725.8673545,143213
198831083827.9743835,466227
19893821,03228.2863875,432225
19903741,01130.4244165,746238
19913791,02430.8254225,728238
19924261,15232.1934415,888244
19934251,14831.9324375,751239
19944531,22433.6714615,974248
19955031,36036.5015006,382265
19965361,45036.5505006,300261
19975321,43835.8274906,090253
19985271,42635.2914835,917246
19995351,44636.0704945,967248
20005431,46736.4444995,951247
20015181,40035.4294855,712237
20025301,43136.2204965,766239
20035681,53539.9185466,277261
20046561,77243.6855986,787282
20056831,84545.7126267,017291
20067191,94347.9646577,275302
20078062,17852.5587197,878327
20088692,35056.3997728,356347
20097762,09652.7977237,732321
20108352,25756.9377798,244342
20119092,45661.7528458,841367
2012  62.0848508,790365
Average annual change rate 60-116.48%6.48%4.27%4.27%2.58%2.58%
Average annual change rate 00-114.80%4.80%4.91%4.91%3.66%3.66%
Average annual change rate 08-111.49%1.49%3.07%3.07%1.90%1.90%
Pearson r  0.99 0.97 
  0.98 0.94 

 

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S-curve graph and statistics of a logistic function forecast of ITR, showing that the tourism business still has a good many years to live. However, the fast growing track is over : from 2007 onwards, growth has been slowly decelerating, moving towards eventual market saturation at about 1.5 $US trillion. This is still far away, in about a quarter of century.

The chart shows in blue the historical values of ITR, from 1950 to 2011. The red line shows the S-curve logistic function forecast, fitted to the actual ITR, and extended into the future. By iteration, the following parameters have been computed :

  1. Saturation M, or upper limit of ITR : 1,490 $US billion.
  2. Midpoint tm, or year when inflection of growth occurs : 2007.
  3. Time Δ t to grow from 10% to 90% : 59 years.

The forecast does not claim to be a prediction of ITR for the coming years, but only a suggestion, among others, of the possible development of ITR as provided by a plain mathematical model, and assuming that other factors remain unaltered. What it tells us is nevertheless eye-opening. First the good news : the tourism business still has a good many years to live. However, the fast growing track is over : from 2007 onwards, growth has been slowly decelerating, moving towards eventual market saturation at about 1.5 $US trillion. Again, this is still far away, in about a quarter of century, says the model — but the halt is lurking there, patient and inescapable.

 

World International Tourism Receipts
Forecast (S-curve)

Year

World ITR
Actuals

World ITR Forecast

(Constant $US billion, 2005=100)
19501421
1951 23
1952 25
1953 27
1954 29
1955 31
1956 33
1957 36
1958 38
1959 41
19603744
1961 48
1962 51
1963 55
1964 59
19655863
1966 68
1967 73
1968 78
1969 84
19707490
1971 97
1972 104
1973 111
1974 119
1975121127
1976 136
1977 146
1978 156
1979 166
1980218177
1981203189
1982181202
1983179215
1984188229
1985193244
1986230260
1987276276
1988310293
1989382311
1990374330
1991379349
1992426369
1993425390
1994453412
1995503435
1996536458
1997532482
1998527506
1999535531
2000543557
2001518583
2002530610
2003568637
2004656664
2005683691
2006719719
2007806747
2008869774
2009776802
2010835829
2011909856
2012 883
2013 910
2014 936
2015 962
2016 987
2017 1,011
2018 1,035
2019 1,058
2020 1,081
2021 1,103
2022 1,124
2023 1,144
2024 1,163
2025 1,182
2026 1,200
2027 1,217
2028 1,233
2029 1,249
2030 1,264
2031 1,278
2032 1,291
2033 1,304
2034 1,316
2035 1,327
2036 1,337
2037 1,347
2038 1,357
2039 1,366
2040 1,374
2041 1,382
2042 1,389
2043 1,396
2044 1,403
2045 1,409
2046 1,415
2047 1,420
2048 1,425
2049 1,430
2050 1,434

 

Sources: UNWTO : World Tourism Barometer, Tourism Highlights | World Bank : World DataBank | United Nations Population Division.

 

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