Tourism Trends 2017: The Year So Far
The first months of 2017 have shown an increase in global tourist receipts with 6% more tourist arrivals in January to April 2017 than the same period last year. Tourism is a key driver of real estate investment and can underpin real estate returns. Especially for resort property or properties that are designed for holiday rentals. We take a quick look at the tourism trends in our current Y-Go and property destinations.
Montenegro
Montenegro has welcomed 349,276 tourists with 1.21 million tourist nights in the first six months of 2017. This is an increase of 18.6% year on year. The busiest touristic months in Montenegro are June, July, August and September. These 3 months in 2016 have accounted for over 50% of the years arrivals. We fully expect that Montenegro’s 2017 touristic arrivals and night will far exceed those of 2016. However there are restrictions on growth in peak periods imposed by a lack of accommodation supply.
With only 348 accommodation establishments containing circa 63,500 rooms, it is evident that in its peak of June to September, Montenegro is already almost full to capacity. The development of the new resorts alongside the historic villages and towns interspersed throughout the country will help to increase capacity and meet demand over coming years.
An increase in airlines serving Montenegro with either seasonal or continual flights operating has been seen throughout 2016 and continues in 2017. Wind Rose Aviation of Ukraine is the latest to announce new routes to Montenegro. This year alone, Montenegro Airlines and Ethiad have opened a codeshare structure with new routes as have Montenegro Airlines & Air Serbia. Similarly, FlyDubai have opened seasonal routes to Tivat. And there are other airlines getting in on the action.
Tourism is a large contributor to Montenegro’s GDP. It is expected that it will contribute EUR 900 million in 2017, 22.7% of total GDP. Montenegro is up and coming with its tourism industry emerging from a cottage style industry to a fast growing and in demand industry with the necessary supporting infrastructure.
Andermatt, Swiss Alps
Tourism in Switzerland as a whole increased in the first half of 2017 with a 4.4% increase in overnight hotel stays in the period with 17.6 million tourist nights.
The increase in the facilities available in Andermatt over the past 10 years in addition to the opening of further hotel accommodation at the Orascom owned Chedi has spurred tourism in the region. The Chedi has won various awards since its opening and is an increasingly popular escape for wealthy travellers. The new ski chair lifts that opened in 2016 have also served to increase the touristic appeal for the area as has the new 18-hole golf course. Improvements to the rail connectivity with Zurich should also spur demand.
There is still some substantial development to be undertaken in the Andermatt area. These will serve to further enhance its appeal and make it a must-visit year-round Swiss Alps destination. The UK, Germany, the Netherlands & Switzerland itself are the key source markets for tourists to Andermatt.
Athens, Greece
The capital city of Athens is one of the most popular tourist destinations in Greece. The city draws tourists who seek a hybrid of city break and beach living. In the first quarter of 2017, Athens has experienced a 14% increase in tourist arrivals compared to the same period last year.
Last year, Greece welcomed a record number of tourists and this year that trend is expected to continue. UK tourists are the mainstay with 3 million expected in Greece this year. A new daily flight between the US and Athens operated by Emirates has also opened up the US market. 900,000 Americans are expected in Athens throughout the course of 2017, an increase of over 200,000. Germany is also a key feeder market.
The expansion of Athens airport which opened in May will allow for an additional 6 million passengers. This increases previous capacity by 20 million.
All in all, signs are positive for tourism to Greece. Athens in particular and further private investment into touristic infrastructure and the increased popularity of Greece as a holiday destination is set to continue for the foreseeable future.
Cuba
The tiny island of Cuba remains a must-visit on the bucket lists of many travellers. It’s unique and quirky touristic offering provides an experience that cannot be found elsewhere.
Tourism to Cuba in the first half of 2017 had increased by 22% year on year. This puts it well on target to reach its target of 4.2 million visits during the full year.
Trumps proposed tightening of travel restrictions may impact arrivals from the US, with flights already cancelled by key airlines. But there are plenty of other source markets of tourists to Cuba. A wide variety of connecting flights through regional hubs in Mexico and other Central American destinations for Americans who want to visit the island.
Tourism is expected to support 489,000 jobs with the industry contributing 10.2% of GDP in 2017.
Red Sea Riviera, Egypt
The Red Sea Riviera continues to be a popular destination. A range of resorts are on offer including El Gouna and Somabay for the luxury traveller or Hurghada for lower budgets. The destination remains popular but has suffered a decline in tourist numbers. This has been spurred on primarily as a result of the cancellation of a number of flight routes from Europe. Slowly however in 2017 routes are being reintroduced and new routes added.
Since the Arab Spring, tourism to Egypt has suffered with tourist numbers still not reaching pre-2011 volumes. This provides a great opportunity! Property investors can capitalise on the rebound in touristic numbers in the light of the closure of some hotels in the resort areas of the country and the steady year on year growth that the sector is seeing.
Tourism increased 48.6% year on year in March of 2017 and by 20% in the first quarter as a whole spurred partly by the strength of foreign currency against a weak Egyptian Pound. The majority of visitors were European, predominantly of German origin. This is a trend expected to continue with further growth in 2017 and 2018.
Prices for holidays to Egypt were competitive as a result of the free floating of the Egyptian Pound. It can be expected that touristic suppliers will slowly begin to increase prices as demand returns.
Spending has increased in 2017. It is expected to continue to rise as touristic confidence returns. According to the Egyptian National Competitiveness Council, spending rose to $85 per night during the first half of 2017 compared to $76 per night in 2016. A USD 22 million annual budget for the promotion of tourism to Egypt has been continued after its success in 2016 in bringing flights back to key markets to serve renewed demand.
Barcelona & Marbella, Spain
Spain remains one of the most popular tourist destinations in the world. Plus the number of tourists that it welcomes to its shores continues to grow. Last year, 2016, was a record year for Spain. Over 75.3 million tourists spent in excess of EUR 77bn. Indications to date in 2017 show that this year’s performance is likely to outperform that of last year’s record. The UK, France and Germany are the main source markets for Spain as a whole. In the first five months of 2017, 28 million foreign tourists visited Spain. This is an increase of 11.6% from the same period in 2016.
Barcelona has gone to war with AirBnB over unlicensed flats listed on their site. Amidst a growing distaste for the uncouth behaviour of certain tourists and overcrowding in key city centre locations. In Barcelona, it is now a requirement that all premises that will welcome tourists (including personal homes) must be licensed to ensure that they meet certain criteria. Nonetheless, Barcelona remains a hugely popular tourist destination. In fact, it is so popular that this year it has implemented an accommodation law. This limits the number of beds available for tourists to balance the needs of tourists with that of its residents. Over 70% of tourists to Barcelona are from Europe, with the majority from Spain itself followed by the UK and France.
Marbella is one of Andalucia’s most popular cities. It continues to attract hordes of tourists each year. Last year Andalucia welcomed 10.6 million foreign tourists to the region with an average spend of EUR 97 per night. Peak season is July to September. With the majority or touristic visits occurring during this period. Projections for foreign and domestic tourists to Andalucia in 2017 are expected to reach a record 30 million, an increase of 1.5 million tourists compared to 2016.
Spain is and always has been a popular destination and Marbella and Barcelona’s popularity seems set to continue.
