EyeforTravel Full Year Round-up and Forecast 2016 Analysis and forecasting of major markets Understand the outlook for travel with analysis of the world s major economies and their tourism markets Industry and company outlooks Concise round-ups of all the major verticals, as well as overviews of the established players and the companies disrupting the travel industry Technology trends The most important facts and figures covering the rapidly changing face of distribution and ecommerce
EyeforTravel Full Year Round-up and Forecast 2016 Disclaimer The information and opinions in this report were prepared by EyeforTravel Ltd and its partners. EyeforTravel Ltd has no obligation to tell you when opinions or information in this report change. EyeforTravel Ltd makes every effort to use reliable, comprehensive information, but we make no representation that it is accurate or complete. In no event shall EyeforTravel Ltd and its partners be liable for any damages, losses, expenses, loss of data, loss of opportunity or profit caused by the use of the material or contents of this report. No part of this document may be distributed, resold, copied or adapted without EyeforTravel s prior written permission. Author Chima Simpson-Bell Geoff Whiting Sally White Alex Hadwick, EyeforTravel Head of Research EyeforTravel Ltd 2016 www.eyefortravel.com EYEFORTRAVEL FULL YEAR ROUND-UP AND FORECAST 2016 2
Welcome Welcome Dear Colleague, Welcome to our round-up of 2015 and our forecast for the coming year. We hope that this report will give you a comprehensive overview of the travel industry right now and its future for the next 12 months. I am pleased to say that 2015 was a strong year for our industry, with some remarkable performances in several countries and a record-breaking year for the airline industry in terms of profits. A more mixed picture awaits in 2016 as some markets struggle under less favorable conditions and global growth weakens as a whole. Although I would sound a note of caution, we predict that our industry will outperform other sectors of the economy and continue on an overall growth trajectory in the next 12 months. Rock-bottom oil prices means that the airline industry has plenty of room to play with in terms of reducing prices to stimulate demand, and gains in discretionary spending rates in developed countries are increasingly directed at travel and leisure. Furthermore it is getting easier and easier for travelers to get inspired, research and book travel than ever before. Mobile continues to be the defining technological trend but social media is increasingly a space where travelers consider their vacations. If companies can harness these direct routes to the consumer through better social media marketing and successful apps, then they will be in a strong position for the future. Therefore, travel companies should be aware of economic turbulence and perhaps dampen expectations if they were expecting the same figures as 2015, but they should be able to approach the coming year with confidence. I hope that this report will arm you with the intelligence to navigate the market and improve your business performance in 2016. Alex Hadwick, Head of Research, EyeforTravel www.eyefortravel.com EYEFORTRAVEL FULL YEAR ROUND-UP AND FORECAST 2016 3
CONTENTS Contents List of Figures...6 List of Tables...7 1. The Numbers You Need to Know...8 2. Market Trends...10 3. Key Major Economies.......................................................................................... 12 3.1 Americas...12 3.1.1 US...12 3.1.2 Canada...15 3.1.3 Mexico...17 3.1.4 Brazil...19 3.2 Europe...21 3.2.1 France...21 3.2.2 Germany...23 3.2.3 Russia...25 3.2.4 UK...27 3.3 Asia...29 3.3.1 Australia...29 3.3.2 China...31 3.3.3 India...33 3.3.4 Japan...35 3.3.5 South Korea...37 4. Industry Trends...39 4.1 Hotels and Accommodation...39 4.1.1 RevPAR Performance...39 4.1.2 Mergers, Acquisitions and Investments...40 4.1.3 The US Hotel Market Looks Strong in 2016...40 4.2 Airlines...40 4.2.1 Jet-Fueled: Why Low Fuel Prices Will Continue...44 4.3 Cruise...46 4.4 Online Travel...48 4.5 Business Travel...49 4.5.1 US Business Travel...50 4.5.2 European Business Travel............................................................................ 51 4.5.3 Business Travel Inflation...51 5. Technology and Distribution................................................................................... 52 5.1 Mobiles Increase Its Role in Travel...52 5.1.1 Mobile Access Continues to Grow in Scale...52 www.eyefortravel.com EYEFORTRAVEL FULL YEAR ROUND-UP AND FORECAST 2016 4
CONTENTS 5.1.2 Mobile Broadband Grows Across Every Region...52 5.1.3 Video Maintains Its Important Role...53 5.1.4 Smartphones Could Generate Emerging Market Opportunities...53 5.1.5 Tablets and PCs are Less Certain...53 5.2 Globally, Marketing May Improve by Being Location Aware...54 5.2.1 Apps Provide Strong Data Sources...54 5.3 US: Apps Overtake TVs but Not PCs, Yet...54 5.4 China s Mobile Shopping Spree...54 5.5 Recession and Olympics Collide in Brazil...55 5.6 Travel Dominates India s ecommerce...55 6. Ones to Watch...56 6.1 Business Embraces the Sharing Economy...56 6.1.1 Uber...56 6.1.2 Airbnb...56 6.2 Market Changes When Disruptors Become the Standard...57 6.2.1 Automakers Partner with Apps...57 6.2.2 Ford...57 6.2.3 GM...57 6.3 The Loss of a Staple: No Checkout Time...57 6.4 Social and Facebook Importance Shifts...58 6.4.1 Instagram Takes Hold...58 6.5 Local Connections in Any Destination...58 6.5.1 Startuptravels...58 6.5.2 CreateTrips...58 6.5.3 Withlocals...59 7. Company Profiles...60 7.1 Amadeus IT...60 7.2 American Airlines...60 7.3 Dalian Wanda Group...62 7.4 Hostelworld...62 7.5 MakeMyTrip...64 7.6 Marriott & Starwood...64 7.6.1 Size Matters...64 7.6.2 Looking Forward...65 7.7 Ryanair...65 7.8 TripAdvisor...67 7.9 TUI...69 8. Abbreviations...70 9. References...71 www.eyefortravel.com EYEFORTRAVEL FULL YEAR ROUND-UP AND FORECAST 2016 5
LIST OF FIGURES List of Figures Figure 1: US GDP Growth...12 Figure 2: Canada GDP Growth...15 Figure 3: Mexico GDP Growth...17 Figure 4: Brazil GDP Growth...19 Figure 5: France GDP Growth...21 Figure 6: Germany GDP Growth...23 Figure 7: Russia GDP Growth...25 Figure 8: UK GDP Growth...27 Figure 9: Australia GDP Growth...29 Figure 10: China GDP Growth...31 Figure 11: India GDP Growth...33 Figure 12: Japan GDP growth...35 Figure 13: South Korea GDP Growth...37 Figure 14: Top City Locations for Hotel Searches in 2015....39 Figure 15: 2016 Hotel Price Forecasts...41 Figure 16: US Rooms Under Contract 2014 vs. 2015...42 Figure 17: 2015 Global Growth in RPK and ASK...43 Figure 18: 2015 Regional Growth in RPK and ASK...43 Figure 19: Weekly US Gulf Coast Kerosene-Type Jet Fuel Spot Price FOB (USD per Gallon) January 2014-January 2016...46 Figure 20: Weekly Brent Crude and Gulf-Coast Kerosene Spot Price Comparison...46 Figure 21: Cruise Capacity Development - 2016 CLIA Cruise Industry Outlook..................................... 47 Figure 22: Changes in Business Travel Forecasts for 2015...50 Figure 23: Hostelworld Customer Destinations...63 Figure 24: Hostelworld Customer Nationality by Percentage of Bookings Made...63 Figure 25: Percentage Change in Marriott Lodging Performance from Q3 2014 to Q3 2015...66 Figure 26: Percentage Change in Ryanair Performance Year on Year 2014-15...67 Figure 27: TripAdvisor Revenue Growth by Segment Q3 2015...68 www.eyefortravel.com EYEFORTRAVEL FULL YEAR ROUND-UP AND FORECAST 2016 6
LIST OF TABLES List of Tables Table 1: US Arrivals and Receipts...14 Table 2: Canada Arrivals and Receipts...16 Table 3: Mexico Arrivals and Receipts............................................................................. 18 Table 4: Brazil Arrivals and Receipts...20 Table 5: France Arrivals and Receipts...22 Table 6: Germany Arrivals and Receipts...24 Table 7: Russia Arrivals and Receipts...26 Table 8: UK Arrivals and Receipts...28 Table 9: Australia Arrivals and Receipts...30 Table 10: China Arrivals and Receipts...32 Table 11: India Arrivals and Receipts...34 Table 12: Japan Arrivals and Receipts...36 Table 13: South Korea Arrivals and Receipts...38 Table 15: 2016 Hotel Price Forecasts...41 Table 16: US Hotel Construction Pipeline - US Construction Trends Report...42 Table 17: Year-on-Year IATA Global Growth up to December 2015................................................. 43 Table 18: Year-on-year IATA Regional Passenger Growth Figures up to December 2015...44 Table 19: Cruise Capacity Development - 2016 CLIA Cruise Industry Outlook...47 Table 20: GBTA Business Travel Growth Forecasts 2016...49 Table 21: Original and Revised GBTA Forecasts for Business Travel in 2015...50 Table 22: North America Airfare, Hotel and Car Rental Inflation Forecast...51 Table 23: Amadeus Financial Performance Q3 2015...60 Table 24: Amadeus IT Regional Travel Agent Bookings 2014-15...61 Table 25: American Airlines Financial Performance Q3 2015...61 Table 26: Dalian Wanda Group s Financial Performance (Latest Available in CNY billions)...62 Table 27: Bookings In Hostelworld Group...62 Table 28: Hostelworld Customer Destinations by Percentage of Bookings Made...63 Table 29: Hostelworld Customer Nationality by Percentage of Bookings Made...63 Table 30: MakeMyTrip Revenue Performance 2014-15...65 Table 31: MakeMyTrip Financial Performance...65 Table 32: Marriott Lodging Performance Q3 2015...66 Table 33: Marriott Financial Performance Q3 2015...66 Table 34: Ryanair Financial Performance Q3 2015...67 Table 35: TripAdvisor Financial Performance Q3 2015...68 Table 36: TUI Financial Performance...69 www.eyefortravel.com EYEFORTRAVEL FULL YEAR ROUND-UP AND FORECAST 2016 7