Skip to main content
 

Emerging Markets Offset Tourism Slowdown

The World Travel and Tourism Council has unveiled its latest research results which indicate the importance of some of the world’s emerging markets as strong sources of income for buy-to-let investors.

Tourism Satellite Accounting (TSA) research, based on the UN standard for Satellite Accounting, quantifies the wide-ranging economic impact of travel and tourism, providing solid, credible and professional statistics to assist in government policy and business decision processes.

The world’s travel and tourism industry is expected to generate close to US$ 8 trillion in 2008, rising to approximately US$ 15 trillion over the next ten years, according to the latest TSA research.

However, as a result of global economic downturn, TSA results reveal that the annual global growth rate of the industry will experience a slowdown in 2008, to 3% rather than the annual 3.9% we saw last year.

WTTC President Jean-Claude Baumgarten explained "Challenges come from the US slowdown and the weak dollar, higher fuel costs and concerns about climate change. However, the continued strong expansion in emerging countries - both as tourism destinations and as an increasing source of international visitors - means that the industry's prospects remain bright into the medium term."

However, those who are considering investment property for tourist letting purposes in Africa and the Middle East will be pleased to know that these regions are experiencing higher growth rates than the world average, at 5.9% and 5.2% respectively.

Middle East markets thrive

Considerable ground has been made by emerging markets such as Dubai which are experiencing rapid economic growth. John Walker, Chairman of Oxford Economics, explains, "In particular, China, India and other emerging markets are still growing rapidly, which will increase both business and leisure travel, while many countries in the Middle East are undertaking massive tourism-related investment programmes."

The United Nations World Travel Organization reported in October, through its World Tourism Barometer, that “In the Middle East, upcoming developments in destinations such as Abu Dhabi in the United Arab Emirates or the completion of the Palm Jumeirah in Dubai, will continue to mark tourism in the region, whose intra-regional traffic is expected to continue benefiting from increased disposable income as a result of rising oil prices.”

The International Property Investment Network (IPIN) highlights one of their key investment projects in Dubai: Eagle Heights.   The development offers an opportunity to invest in Dubai’s tax-free society within the Sports City development, which is set to become the world’s largest sporting, cultural and lifestyle destinations. The project will be constructed to the latest of modern standards to include 14 floors  enjoying direct views over the Ernie Els designed championship golf course and the Sports City central canal.

Sara Romera, IPIN Product Analyst, explains: “Apart from location, the project features further benefits such as a 3 year rental guarantee at 8% p.a., along with an impressive estimated 30% p.a. capital appreciation by completion in late 2009.”

Domestic tourism saves mature markets

Mature markets such as Europe, are falling below the world average growth at 2.3%; however, the Council stresses that “even in countries where economic growth slows, there is likely to be a switch from international to domestic travel rather than a contraction in demand for travel and tourism.”

A good example of strong domestic tourism demand is the fast emerging southern region of Calabria in Italy, which alone saw over 209,000 Italian visitors in 2006, with 2007 figures still under review. Indeed, prospects for buy-to-let investors in southern Italian regions are high: domestic demand, complemented by a distinguished international presence, creates a perfect combination for landlords looking forward to having as few vacant weeks a year as possible.

 
propertyshowrooms.com