How International Tourism is Coping with the Consequences of the Financial and Economics Crisis

In the wake of the global recession and faced with the first signs of a potential recovery, this contribution concentrates on analysing international tourism. Starting out from a description of the key macroeconomic factors driving the industry, the paper then analyses their effects on the demand for traveling abroad in five source markets such as Australia, Canada, Japan, the US and the EU 15. The relationships were estimated econometrically for the period 1977-2008. Based on the developed models, the cyclical impact of the recession in 2009 was estimated to be a decline of around 10% in terms of outbound expenditures (at constant prices and exchange rates) for the totality of the five analysed source markets. For 2010, the forecast models promise a slight recovery of 1% in terms of aggregated outbound expenditures; for 2011, a growth of 3% is expected. Model simulations based on a risk scenario for the euro zone showed that outbound expenditures of the EU 15 will shrink significantly in 2010 and 2011 rather than recover as predicted by the baseline scenario. Beside the cyclical impacts the paper analyses also the structural aspects of the economic downturn.