Headlines – Week of March 11, 2012
March 20, 2012
Travel & Tourism Forecast to Pass 100m Jobs and $2 Trillion GDP in 2012
According to research by the World Travel & Tourism Council (WTTC), the global Travel & Tourism industry will grow by 2.8% in 2012, marginally faster than the global rate of economic growth, predicted to be 2.5%. Travel & Tourism is set for a milestone year in 2012 as the industry’s direct contribution to the global economy is expected to pass $2 trillion in GDP and 100 million jobs.
This rate of growth means that Travel & Tourism industry is expected to directly contribute $2 trillion to the global economy and sustain some 100.3 million jobs. When the wider economic impacts of the industry are taken into account, Travel & Tourism is forecast to contribute some $6.5 trillion to the global economy and generate 260 million jobs – or 1 in 12 of all jobs on the planet.
In 2011, Travel & Tourism’s total economic contribution, taking account of its direct, indirect and induced impacts, was US$6.3 trillion in GDP, 255 million jobs, US$743 billion in investment and US$1.2 trillion in exports. This contribution represented 9% of GDP, 1 in 12 jobs, 5% of investment and 5% of exports.
Over the medium-term, the prospects of the industry are even more positive with average annual growth expected to be 4% through to 2022 by which time Travel & Tourism will employ 328 million people – or 1 in 10 of all jobs on the planet.
Other selected highlights from the research show:
- South & Northeast Asia will be the fastest-growing regions in 2012, growing by 6.7%, driven by countries such as India and China where rising incomes will generate an increase in domestic tourism spend and a sharp upturn in capital investment, and recovery in Japan
- After an extremely challenging 2011 when civil unrest and violence had a dramatic impact on demand for Egypt, Tunisia and Libya, North Africa is showing signs of recovery in 2012 with Travel & Tourism direct GDP growth forecast at 3.6%. Morocco (8.3%) will be the star performer of this region as negative perceptions of security continue to affect tourism in Egypt and Tunisia
- In the Middle East, where civil unrest and violence in some countries continues, growth will be more subdued (3%), although there are stark differences at country level. Qatar will grow fastest at 13.2% while Syria will likely see another dramatic fall, estimated at 20.5%, as the political situation worsens, increasing concerns over security. It is worth noting that 14% of all international arrivals in the Middle East in 2010 were for Syria, the second most important destination in the region after Saudi Arabia
- The mature economies of North America and Europe will continue to struggle in 2012. North America, which is saw a slight upturn in the USA’s economic situation at the end of 2011, should see growth of only 1.3% in Travel & Tourism direct GDP over the year
The prospects for Travel & Tourism growth in Europe in 2012 are precarious. Current forecasts suggest a 0.3% increase in Travel & Tourism direct GDP for the region overall, but this will be propped up by newer economies such as Poland and, of course, Russia. A decline of 0.3% is expected across the European Union. Consumer spending is set to tighten as austerity measures kick in, and there continues to be considerable uncertainty around the future of the Eurozone and peripheral economies of Greece, Spain, Italy and Portugal.
Real Estate Market Bottom Reached in 2011
According to a national research survey shows a market recovery may be underway and the bottom may have been reached in 2011 for bargain-seeking investors. The 2012 Cotton Report is the fourth annual survey focusing on buyer confidence and attitudes about market recovery of roughly 1,400 individuals pursuing a real estate purchase. The survey was conducted in February 2012, by Cotton & Company, an industry leader in residential real estate sales and marketing.
According the company, over the past several years, the primary market has been relatively stagnant throughout the country, and the lack of mortgage availability was outweighed by a pessimistic buyer sentiment. The 2012 data indicates that 54% of the respondents in the market are seeking a primary residence, with 67% of these buyers requiring mortgage financing.
The three-year trend of the survey reflects a more optimistic viewpoint on non-controllable political and economic factors, with a substantial increase of personal choice as the primary factor in their decision. The data also reflects a decrease in respondents who are waiting for better pricing, demonstrating the stabilization of pricing throughout many markets.
President and Founder of Cotton & Company, Stephann Cotton stated, “For those who have been waiting to make their move, trying to time the bottom of the market, they may have already missed it
The Cotton Report’s market data supports this growing perception, with a steady reduction in the number of investors actively in the market and fewer buyers expecting for further price reductions. The market statistics combined with reduced inventory levels spell good news for real estate developers with projects in the pipeline preparing to meet the pent-up demand from the market rebound.
2012 Cotton Report Findings
- 54% of the market is seeking primary housing, rising sharply from 38% a year ago
- 32% of the primary market is “Upsizing”, reversing the trend for smaller residences
- 66% of vacation home buyers are moving for “Geographic Relocation”, with 68% of this market ages 45-64 years old
- 33% must sell their current home to make a move, a reduction from 42% a year ago
- Only 12% of survey participants state “Investment/Rental Income” as their motivation, continuing a four-year steady decline from 23% in 2009.
- 53% of the respondents with over $100,000 household income believe we have reached the bottom of the market
Where Canadians are Buying U.S. Real Estate
According to a survey released last year by the U.S.-based National Association of Realtors (NAR), entitled Global Perspectives, for the fourth consecutive year, Canadians account for 23 percent, or the largest percentage of foreigners buying homes in the U.S. That’s up from seven per cent in 2007.
For the year ending in March 2011, foreigners bought $82 billion worth of residential real estate, up from $66 billion in 2010.
The NAR survey says Canadians flock to buying U.S. properties because U.S. homes are generally less expensive and viewed as a secure investment and the U.S. market offers rental opportunities and long-term appreciation potential.
Other factors include a strong Canadian dollar and a search for milder winters.
The strongest purchases are in Florida and Arizona. In 2010, Canadians bought about eight percent of the homes sold in Florida. For almost every week since the beginning of 2009, a Canadian buyer has purchased a home worth at least $1 million in Maricopa County, Arizona.
Other areas are also picking up. Canadian investors are jumping on properties in the Puget Sound regions of Washington State, northwest Montana, Las Vegas, Texas, Georgia, the Carolinas and Vermont. A new survey by the Bank of Montreal also supports that trend. The survey states that one in five Canadians are still considering purchasing a home in the U.S. The survey says 20 percent of British Columbia residents would consider purchasing in the U.S., Ontario coming in second at 18 per cent and Alberta in third place with 17 percent.
Posted by Scott R. Lodde