TRAVEL & TOURISM CITY TRAVEL & TOURISM IMPACT 2017 EUROPE

TRAVEL & TOURISM CITY TRAVEL & TOURISM IMPACT 2017 EUROPE

TRAVEL & TOURISM CITY IMPACT As the world rapidly urbanises, there is a need to manage that growth with effective planning. A successful city is one where business, infrastructure, resources, and environment meet with quality jobs and effective government support. Gloria Guevara Manzo, President & CEO World Travel & Tourism Council THE IMPORTANCE OF CITIES 54.5% of the global population live in urban areas in, and is predicted to increase to 60% by 2050. 1.8BN international tourism arrivals per year expected by 2030, with particular growth in cities. 65 global cities analysed in the latest research from the World Travel & Tourism Council. F or over 25 years, the World Travel & Tourism Council (WTTC) has been quantifying the economic and employment impact of Travel & Tourism at the country and regional level. This data is a key source of information for decision-makers within governments, investment banks, academia, and multilateral organisations across the world and particularly within the 185 countries for which we provide detailed reports. It allows us to state with confidence the fact that Travel & Tourism is one of the largest sectors in the world, supporting more than 10% of global economic activity and 292 million jobs: 1 in 10 jobs worldwide 1. Now, for the first time, WTTC has produced research that looks at the economic and employment impact of Travel & Tourism in cities. Future growth and success for the sector requires recognising and monitoring the trends that will drive future travel habits. According to the UN, the urban population of the world has grown rapidly from 746 million in 1950 to over four billion in and today, 54.5% of the world s population lives in urban areas. This proportion is expected to increase further to 60% by 2050, with nearly all of the increase concentrated in Asia and Africa. With international tourism arrivals set to rise to 1.8 billion a year by 2030 (UNWTO), and billions more domestic travellers expected, the city share of these arrivals shows particular growth. Understanding the rate and concentration of city tourism compared to country tourism growth is an important need for policy makers. Our research looks at 65 global cities, chosen for being among the top ranked for arrivals and spending by visitors. Across all cities in our study, even despite being selected as key Travel & Tourism centres, there are enormously differing levels of importance. Travel & Tourism s share of city GDP in Cancún, for example, is as much as 49.1%, whereas in Los Angeles, with its much more diversified economy, the sector represents only 1.2% of its GDP. The difference in the share of employment is also just as marked, ranging from supporting 38.5% of all employment in Cancún to just 0.8% in Osaka. With highest levels of growth concentrated in Asia, this research importantly provides forecasts for how these figures may change over the decade ahead. As the world rapidly urbanises, there is a need to manage that growth with effective planning. A successful city is one where business, infrastructure, resources, and environment meet with quality jobs and effective government support. Goal 11.4 of the UN Sustainable Development Goals calls out the need for cities to strengthen efforts to protect and safeguard the world s cultural and natural heritage. The role of Travel & Tourism in contributing to this goal in cities cannot be underestimated, both in creating civic pride and jobs, and, on a pure financial basis, through the export revenue generated by international visitors. Cities are growing increasingly large and influential and are accounting for a greater proportion of global tourism demand. WTTC is proud to provide the evidence base to help public and private bodies make the correct decisions for the future growth of a sustainable Travel & Tourism sector. Gloria Guevara Manzo President & CEO FOREWORD 1 WTTC annual economic impact analysis https://www.wttc.org/research/economic-research/economic-impact-analysis/ For more information, please contact: ROCHELLE TURNER Research Director rochelle.turner@wttc.org EVELYNE FREIERMUTH Policy & Research Manager evelyne.freiermuth@wttc.org Cover: Aerial view, Hong Kong CITY TRAVEL & TOURISM IMPACT 2017

1 SUMMARY Europe is the most established Travel & Tourism region of the world. Its grand and historical cities are filled not only with world-renowned art and architecture but also with global and international business and intergovernmental headquarters. They have attracted visitors for centuries. The Travel & Tourism sector makes a substantial contribution to European economies. In total in, including the services that Travel & Tourism businesses use through their supply chains. Travel & Tourism supported 14 million jobs, one in ten of all jobs in Europe, and made over 2 trillion in contribution to gross domestic product (GDP), or 9.7% of total European GDP. With its market mature and future development constrained by space, the region has the lowest growth forecast over the next ten years of all areas of the world. Still, by 2027, the Travel & Tourism sector s total economic contribution is expected to grow to 17 million jobs and 2.8 trillion in contributions to GDP (10.9% of total European GDP). WTTC s economic data on Travel & Tourism covers all 28 countries of the European Union plus an additional 15 countries for a total of 43 countries in the wider region of Europe. This report looks within the countries at the 17 cities of Amsterdam, Antalya, Barcelona, Berlin, Brussels, Dublin, Istanbul, Lisbon, London, Madrid, Moscow, Munich, Paris, Prague, Rome, Stockholm and Warsaw. Collectively, these 17 cities directly contribute 18% of the region s Travel & Tourism GDP. Cities are major destinations within countries 2 Cities are important hubs for tourism in many European countries, generating very large amounts of GDP and employment for the sector. The highest relative contribution is evident for cities which predominantly attract leisure visitors. While Travel & Tourism s absolute contribution is especially large in many of these European cities, as global business hubs, the share of the sector s overall contribution to city GDP often pales in comparison to cities in other parts of the world where the strength of other sectors of the economy may not be as dominant. TRAVEL & TOURISM IN EUROPE Still, three cities out of the 17 in this study of European cities account for over half of the direct tourism GDP generated within their respective countries: Carrer del Bisbe, Barcelona, Spain SUMMARY EUROPE 9.7% contribution to European GDP is. 10% of all jobs in the region are supported by Travel & Tourism. PRAGUE 60.3% DUBLIN 59.1% BRUSSELS 52.6% 2 Travel & Tourism GDP is generated by spending from both international and domestic visitors and has been calculated to be consistent with estimates of the sector impact for countries and with other economic activity. Calculation in this report also allows direct comparison across cities relying on consistent methodology and definitions. Calculations for this report focus on 65 important global city destinations and estimate the GDP and employment directly generated by Travel & Tourism activity. Calculation is fully consistent with the WTTC annual economic impact analysis by country and also relies on inputs from Oxford Economics Global City Travel (GCT) database. Study includes: Amsterdam, Antalya, Barcelona, Berlin, Brussels, Dublin, Istanbul, Lisbon, London, Madrid, Moscow, Munich, Paris, Prague, Rome, Stockholm, Warsaw. CITY TRAVEL & TOURISM IMPACT 2017 5

1 SUMMARY With GDP contribution of 22.5, Paris is the largest European city destination covered in this study, and is the third largest in the world. Paris directly generates over a quarter of French tourism activity. Travel & Tourism generates 3.2% of the city s total GDP, and 230,000 jobs. London s Travel & Tourism sector generates 15 billion ( 12.3 billion) of GDP and 228,000 jobs and is the second largest in Europe and number 11 in the world. The city accounts for 18.6% of the UK s total Travel & Tourism GDP. However, Travel & Tourism's contribution to London s overall GDP is low at 1.9%, due to the city s large banking & finance sector. Lisbon and Madrid are examples of other European cities with large travel markets, but which have a greater reliance on other sectors compared with the rest of the country. Three cities in this study contribute over half of their country s Travel & Tourism GDP Prague (60.3%), Dublin (59.1%) and Brussels (52.6%). A further seven account for more than a quarter of their country s. The importance of international demand across Europe in Travel & Tourism over the past decade has varied considerably across cities related to their diverse source markets. Cities in Europe have all gained in their share of wider tourism demand as hubs and gateways to other destinations within the country, helped by good connectivity. In the ten years to, international arrivals grew most in Berlin, which experienced a doubling of foreign visitors. The cities of Lisbon, Prague, Moscow, and Warsaw all saw international visitor arrivals increase between 51% and 64% in that same period. However, the largest cities tend to be among the slowest growing due to market maturity. Greater development in capacity and infrastructure would be required for more rapid growth. European cities are largely reliant on international demand, with the USA the leading long haul market for five of the cities in this study: London, Madrid, Munich, Paris, and Rome. However, intra-regional travel from other European source markets provides the bulk of this international demand. Paris is set to slip further in the rankings of top global destinations to become the fifth largest Travel & Tourism destination out of the cities in this study. Growth will be constrained by infrastructure and compared to other global centres will lag that in the large Chinese cities. Similarly, London is expected to grow more slowly than the emerging destinations. For Paris, however, while a large global destination, it also benefits from a significant domestic demand. Dublin and Istanbul have a very high reliance on international demand (over 90%) which is boosted by the impact of airport revenues on these important hubs within their countries. Prague, London, Amsterdam, Barcelona, and Brussels also have high reliance on international visitors, each city contributing over 80% of Travel & Tourism spend. At the other extreme, within Europe, Moscow is the only city in the study that relies on domestic spending for over 75% of demand. This proportion has risen in recent years as international travel fell with the imposition of sanctions. The other European cities, Berlin, Munich, Stockholm, and Warsaw, receive over half of their visitor spend from the domestic market. These cities may be more exposed to risks in the domestic economy. Arc de Triomphe, Paris, France Ha'Penny Bridge, Dublin, Ireland FIGURE 1: INBOUND SPEND ( BN) AMSTERDAM 11.8 ANTALYA 7.3 BARCELONA 13.6 BERLIN 6.9 BRUSSELS 6.3 DUBLIN 9.2 ISTANBUL 17.5 LISBON 6.4 LONDON 18.9 MADRID 6.1 MOSCOW 3.7 MUNICH 7.4 PARIS 10.4 PRAGUE 5.9 ROME 10.1 STOCKHOLM 5.9 WARSAW 4.7 Travel & Tourism is an important tool for job creation in cities Growth in tourism activity can have a disproportionately large impact on job creation. For example, in Amsterdam Travel & Tourism contributes % of the city s GDP, but 9.6% of employment. Nearly 1 in 10 jobs in Amsterdam are directly generated by Travel & Tourism. contribution in Paris is forecast to return to 4% over the coming years Cities are recovering from the impact of terrorist attacks Paris has been affected by some lower demand due to the terrorist attacks that it has suffered over the past few years. The contribution of Travel & Tourism in Paris in was smaller than in previous years. Paris has been more affected than the rest of France by lower levels of travel demand with international arrivals in falling by 8 percentage points in Paris in 2015 compared to a 2.2 percentage point drop for France as a whole. However the economic contribution of Travel & Tourism is rising once again, and is expected to return to around 4% of GDP in the coming years. Golden Horn, Istanbul, Turkey Travel & Tourism accounts for 8.4% of Prague s employment, compared to 5% of GDP; and 7% of Lisbon s employment, compared to % of GDP. In all of the European cities covered by this research, the proportion of employment generated by Travel & Tourism will increase, highlighting the growing importance of the sector as a creator of jobs in the future. Following the attacks in Brussels in early 2015, the city experienced a fall in international demand of 17 percentage points. That said the city s Travel & Tourism sector grew at double the rate of Belgium s over the past ten years (2.1% per year, compared to 1.1% for Belgium), and is forecast to continue to grow at a rate of 7.3% per year over the next decade. A positive outlook for Brussels as tourism GDP is forecast to grow at a rate of 7.3% per year over the next decade Turkey s Travel & Tourism has suffered from continued safety concerns and political unrest, and this was reflected in both Antalya, where Travel & Tourism s relative contribution to the city s GDP dropped by nearly 3 percentage points between and, and Istanbul. However, over the next ten years Antalya and Istanbul are forecast to be the fastest growing of the European cities in this study at 9.8% and 8.6% respectively. St Basils cathedral, Moscow, Russia 6 WORLD TRAVEL & TOURISM COUNCIL CITY TRAVEL & TOURISM IMPACT 2017 7

1 SUMMARY 4 5 6 9 10 11 12 13 14 15 16 8 17 FIGURE 3: TOP EUROPEAN CITY DESTINATIONS, * Tourism Market Size (Tourism GDP, bn) 7 3 2 1 INTERNATIONAL DOMESTIC FIGURE 2: % INTERNATIONAL SPEND OF CITY TRAVEL & TOURISM* 1 96.1% Dublin 2 91.2% Istanbul 3 88.0% Prague 4 86.6% London 5 85% Amsterdam 6 84.6% Brussels 7 81.9% Barcelona 8 73.6% Lisbon 9 70.3% Paris Share of City GDP (City tourism GDP % of total city GDP) Share of Country GDP (City tourism GDP % of country tourism GDP) 1 Paris 22.5 Antalya 21.2 Prague 60.3 2 London 15.0 Lisbon Dublin 59.1 3 Munich 9.4 Barcelona Brussels 52.6 4 Istanbul 8.2 Prague 5.0 Warsaw 4 5 Rome 7.8 Warsaw Stockholm 38.1 6 Barcelona 7.1 Rome Lisbon 31.8 7 Madrid 6.0 Istanbul 4.6 Amsterdam 31.7 8 Berlin 6.0 Munich 4.4 Istanbul 31.6 9 Brussels Amsterdam Paris 27.9 10 Stockholm 4.4 Berlin 4.0 Moscow 26.4 11 Amsterdam Brussels 3.7 London 18.6 12 Lisbon 3.8 Paris 3.2 Barcelona 12.4 13 Moscow 3.7 Madrid 2.8 Madrid 10.6 14 Warsaw 3.4 Stockholm 2.7 Rome 10.1 15 Dublin 2.9 Dublin 1.9 Munich 7.6 16 Prague 2.7 London 1.9 Antalya 6.6 17 Antalya 1.7 Moscow 1.5 Berlin 10 68.7% Rome 11 64.5% Madrid 12 63.5% Antalya 13 48.2% Warsaw 14 47.7% Munich 15 45.5% Berlin 16 34.2% Stockholm 17 24.7% Moscow FIGURE 4: TOURISM MARKET SIZE & GROWTH* City tourism GDP % growth, -16 CAGR 6 5 4 3 2 1 0-1 FIGURE 5: EUROPE CITIES SUMMARY* Amsterdam Antalya Barcelona Berlin Brussels Dublin Istanbul Lisbon London Madrid Moscow Munich Paris Prague Rome Stockholm Warsaw Moscow Dublin 0 2 4 6 8 10 GDP Contribution Employment Contribution (000s) GDP Growth Employment Growth - - 3.3 4.3 1.4 24.3 5.9 4.8 3.7 3.5 3.6 3.4 1.6 1.8 4.5 3.9 2.5 3.8 13.7 2.2 4.8 2.6 2.9 1.5 6.8 4.2 20.0 3.6 2.0 5.4 6.0 2.5 2.3 1.7 Stockholm Madrid Paris 1.7 21.2 7.1 6.0 4.0 3.7 2.9 1.9 8.2 4.6 3.8 15.0 1.9 6.0 2.8 3.7 1.5 8.4 4.4 22.5 3.2 2.7 5.0 7.8 4.4 2.7 3.4 Madrid London Berlin Brussels Amsterdam 6.5 4.7 3.5 22.3 9.7 9.2 4.4 8.9 4.7 2.2 18.7 5.5 24.4 2.1 8.8 2.9 6.3 1.7 13.4 4.6 36.1 3.9 4.2 5.0 11.2 5.2 7.5 2.8 5.9 Istanbul Warsaw Lisbon City tourism GDP, city GDP, 78.0 9.4 38.4 15.0 109.9 4.8 108.3 5.6 48.0 18.3 2.2 90.5 2.3 79.8 230.6 3.0 89.6 2.7 77.7 1.3 131.7 6.4 242.7 3.8 92.1 8.5 88.7 43.9 3.5 67.1 4.6 Munich Rome Prague 88.5 9.8 33.1 9.6 10 145.5 6.5 52.8 22.4 2.6 114.4 2.1 101.0 7.0 227.9 2.5 85.4 2.7 106.6 1.5 157.9 6.5 230.1 3.4 99.4 8.4 119.1 6.0 60.1 98.8 5.7 Barcelona Antalya 108.2 11.0 5.8% 2.0% 47.7 12.0 8.6% 3.7% 113.1 5.0 4.4% 0.8% 179.4 7.6 5.5% 2.1% 72.0 7.3% 3.2% 29.9 3.1 6.6% 3.0% 184.4 2.9 9.8% % 112.3 7.6 4.7% 1.1% 280.5 2.9 6.2% 2.1% 97.9 2.8 5.0% 1.4% 125.1 1.8 6.6% 1.6% 189.8 7.4 % 1.9% 30 4.3 6.1% 2.9% 108.6 8.8 5.9% 0.9% 153.8 7.1 % 2.6% 69.2 4.3 6.7% 1.4% 114.4 6.2 7.0% 1.5% 8 WORLD TRAVEL & TOURISM COUNCIL *Source: Oxford Economics CITY TRAVEL & TOURISM IMPACT 2017 9

2 SELECTED CITIES BY MARKET SIZE (GDP) PARIS LONDON Foreign spend constitutes 70% of in Paris, in contrast to 70% spend from domestic travel in the rest of France Brexit uncertainty may deter business travellers, but leisure travel benefits from weakened pound 3.2% 70% USA 17% UK 10% Germany 5% Italy 5% Spain 4% Paris is one of the largest global destinations for international travel and is more dependent on foreign than domestic tourism demand. 70% of tourism spending in Paris is by international visitors. For France as a whole, the reverse is true as over 70% of travel spending is by domestic tourists. FIGURE 6: TOURISM SHARE OF TOTAL GDP, -26* Paris France % Share Paris also attracts visitors from a more diverse set of source markets than the wider country. Most foreign travel to the rest of France comes from short-haul Western European markets. By contrast, less than half of international travel to Paris comes from Western European markets while the largest single source market is the USA. China and other emerging markets have grown in importance as source markets. Travel to Paris fell in 2015 and due to security and safety concerns, with a fall in the contribution of the sector to the wider economy. The share of GDP generated by Travel & Tourism is currently lower than for France as a whole. The nature of terrorism attacks in Paris deterred some visitors to the city including a stronger reaction from potential foreign visitors than for domestic travellers. Recovery is now underway and the economic contribution of Travel & Tourism is rising once again. This will return to close to 4% GDP and employment in coming years as foreign visitors and spending returns. London is an important global tourism destination attracting large numbers of visitors from around the world. A high proportion of tourism revenue is from spending by international visitors, helped by significantly higher spending per trip by these visitors than by domestic tourists. Over half of the foreign visitors to London are from Western Europe, although the USA is the largest single source market. Being outside the Schengen zone deters some potential visitors from long-haul emerging markets. However, those that do travel to the UK tend to stay longer than in many other European destinations. Further alignment of the UK visa application with the Schengen visa application would benefit the UK and London as destinations by facilitating travel for long-haul visitors. FIGURE 7: TOURISM SHARE OF TOTAL GDP, -26* London UK % Share 4 1.9% 87% USA 13% France 10% Germany 8% Spain 7% Italy 7% % 3.9% 3.7% 3.5% 3.3% Uncertainty related to Brexit may deter some visitors in the near-term, especially business travellers as investment activity is subdued due to the uncertain environment. However, leisure travel is receiving a boost from the associated weakness of sterling. 3.5 3 2.5 3.1% 2.9% 2.7% 2.5% Over the longer-run, continued increase in travel to London is likely. But other sectors will remain crucial for the city and the share of GDP generated by Travel & Tourism will remain relatively low. 2 1.5 Paris Summary France Summary London Summary UK Summary -16-26 -16-26 -16-26 -16-26 22.5 36.1 0.0% 6.1% 80.7 98.6 0.5% 5.0% ( bn) 12.3 20.6-0.3% 6.2% 66.3 101.4-0.2% % 3.2% 3.9% - - 3.6% 3.9% - - 1.9% 2.1% - - 3.4% 3.6% - - 230.1 30-0.5% 2.9% 1180.3 1403.2 0.2% 1.7% 227.9 280.5-0.1% 2.1% 1589.3 1789.0 0.5% 1.2% 3.4% 4.3% - - 4.2% 4.8% - - 2.5% 2.9% - - 4.6% 5.0% - - 10 WORLD TRAVEL & TOURISM COUNCIL CITY TRAVEL & TOURISM IMPACT 2017 11

2 SELECTED CITIES BY MARKET SIZE (GDP) ISTANBUL MADRID Istanbul is heavily reliant on international visitor spend, which contributes 91.2% of Strong prospects for Madrid, a European hub for Latin America Nearly a third of Turkey s tourism activity occurs in Istanbul. The country s largest city relies more heavily on the foreign travel market than almost any other global city in the study. Spending from overseas visitors constitute 91.2% of its tourism revenue up from just half in. All data point to a high level of spend relative to the number of paid overnights in Istanbul. Spend on food & beverages and shopping is relatively high for Istanbul as is the relative importance of air transportation revenue. Istanbul airport revenue is higher, relative to the size of the city tourism market, than for the other cities. The sector therefore suffered particularly badly in when the number of international tourists to the city dropped sharply to 9.2 million (from 12.4 million in 2015). Security concerns and political unrest were a major cause of this, following a spate of terrorist attacks and an attempted coup in summer. There was an especially large fall from Russian travellers as relationships deteriorated between the two countries. Unsurprisingly, tourism spending also decreased in and the sector s share of the city s GDP dipped from 5.1% to 4.6%. However, when seen over a ten-year period, the picture is rosier - tourism GDP has in fact grown by a healthy %. And in the years to, Istanbul s tourism growth will improve as arrival numbers are set to return to previous peaks and the economic contribution of Travel & Tourism to the city s GDP will rise. Out of all the 65 cities in the fuller study, Istanbul is 11th fastest growing and the fastest outside Asia. In most European cities, Travel & Tourism s share of employment is larger than its share of city GDP. In contrast, its contribution in Istanbul is 2.1% of total city employment - significantly less than its share of GDP. Labour productivity in Travel & Tourism is higher than for other sectors in Istanbul and for Turkey as a whole. FIGURE 8: TOURISM SHARE OF TOTAL GDP, -26* Istanbul Turkey % Share 6 5 4 3 4.6% 91.2% Germany 14% Saudi Arabia 7% UK 5% France 3% Iran 3% Nearly 10 million people visited Madrid in higher than in any previous year this century. This number was split evenly between domestic and international arrivals. Foreign visitors spent more on average and accounted for two thirds of the city's tourism revenue (64.5%). Arrival numbers are set to continue rising year on year. Madrid is a mature market and established destination. A focus by both the authorities and private sector to promote the city's tourism product has helped drive growth in recent years. There is still an opportunity to increase length of stay by developing attractions and neighbourhoods to keep visitors for longer, particularly given that the city's top international source market is the US. With 85,400 jobs directly supported by Travel & Tourism, the sector provides 2.7% of the city s employment. Over the past decade, Madrid has seen a slight drop in the number of direct tourist-related jobs, although this was amid a challenging economic period that brought higher unemployment in other sectors too. Employment growth averaging 1.4% per annum is expected over the next ten years. As in other European capitals, sectors such as finance, public administration and technology are important in the Spanish capital, dampening down the contribution from tourism. Tourism s share of Madrid s overall GDP is higher than the share in London, Dublin or Moscow, but relatively low (2.8%) when compared with the sector s 5.1% of national GDP. Madrid's contribution to Spain's overall tourism GDP is 10.6%, a significant figure, and reflecting the city's position as a hub for flights between Europe and Latin America. It is, however, lower than many other capital cities - a result of the breadth and diversity of Spain's tourism product. FIGURE 9: MADRID & SPAIN DIRECT GROWTH, -26* Madrid Spain % growth 20 15 10 5 0-5 -10-15 -20 2.8% 64.5% USA 12% UK 8% Italy 7% France 7% Germany 5% Istanbul Summary Turkey Summary Madrid Summary Spain Summary -16-26 -16-26 -16-26 -16-26 8.2 18.7 % 9.8% 32.5 89.3 2.5% 9.4% 4.8 8.8 1.1% 5.0% 63.7 78.4 0.3% 5.1% 4.6% % - - % 4.7% - - 2.8% 2.9% - - 5.1% 5.4% - - 114.4 184.4 2.4% % 495.1 767.6-0.1% 4.5% 85.4 97.9-0.5% 1.4% 862.2 994.0-0.8% 1.4% 2.1% 2.9% - - 1.8% 2.5% - - 2.7% 2.8% - - 4.7% 5.1% - - 12 WORLD TRAVEL & TOURISM COUNCIL CITY TRAVEL & TOURISM IMPACT 2017 13

2 SELECTED CITIES BY MARKET SIZE (GDP) BRUSSELS PRAGUE Brussels accounts for over half of all generated for Belgium Constrained capacity may limit growth within the city, but could facilitate further growth on a national level 3.7% 85% France 17% UK 10% Germany 8% Spain 7% USA 7% Brussels is an important city for tourism in Belgium, accounting for over half of all tourism GDP generated in the country. This is aided by connectivity - the city is an important gateway for the country. Brussels receives a high demand for leisure visitors but the location of institutions such as the European Commission and the European Parliament in the city also helps to attract a large amount of business travel. Brussels has been affected by terrorist activity in recent years. The impact on Travel & Tourism, similar to that in Paris, has been more evident in Brussels than in the rest of Belgium. This relates to the high concentration of international travel (85% of all tourism spending) to the city. Tourism spending has fallen from the peak, with an associated drop in the contribution of tourism to GDP and employment. Recovery is underway in terms of visitor demand, but average spending per trip remains relatively subdued: tourism businesses remain cautious and prices such as hotel room rates have yet to recover in 2017. As a share of total GDP, the tourism contribution is forecast to take several years to regain the prior peak of 4.0% achieved in. But the upward trend will continue over the longer-run. Prague accounts for a very high proportion of tourism activity in Czech Republic. Well over half of all Travel & Tourism GDP generated within the country is from visitors to the city. The city is highly reliant on international demand with 88% of tourism revenue due to spending by foreign visitors. Around three-quarters of all foreign tourism spending within the Czech Republic is in Prague; less than one-fifth of domestic travel spending is in the city. Prague receives a large number of foreign visitors compared to the resident population. The ratio of visitor per capita is higher than for most other European cities. Capacity constraints limit the potential for future growth, but the city could facilitate growth for the wider country by acting as more of a gateway to other destination in the Czech Republic. Average length of stay by foreign visitors to Prague are longer than for visitors to the rest of the country. Foreign visitors do not currently tend to combine visits to Prague with travel to the rest of the country. Tourism directly generates 5.0% of GDP in Prague, compared with a 2.5% contribution for Czech Republic as a whole. The contribution to employment is even higher: 1 in 12 of workers within Prague are directly employed by Travel & Tourism businesses. 5% 88% Germany 14% USA 7% UK 7% Italy 5% Russia 5% FIGURE 10: TOURISM SHARE OF TOTAL GDP, -26* Brussels Belgium % share FIGURE 11: PRAGUE TOURISM SHARE OF ECONOMIC ACTIVITY, -26* GDP Employment % Share 5 10% 4.5 4 9% 8% 7% 3.5 3 2.5 2 1.5 6% 5% 4% 3% 2% 1% 0% Brussels Summary Belgium Summary -16-26 -16-26 8.9 2.1% 7.3% 10.5 14.2 1.1% 6.3% 3.7% 4.7% - - 2.2% 2.6% - - 52.8 72.0 1.0% 3.2% 110.2 138.4 0.0% 2.3% Prague Summary Czech Republic Summary -16-26 -16-26 2.7 4.2 1.6% 5.9% 5.5 11.1 0.0% 6.1% 5.0% 5.0% - - 2.5% 2.7% - - 99.4 108.6 0.8% 0.9% 218.5 237.3-1.8% 0.8% % % - - 2.4% 2.9% - - 8.4% 8.8% - - 4.3% 4.7% - - 14 WORLD TRAVEL & TOURISM COUNCIL CITY TRAVEL & TOURISM IMPACT 2017 15

3 METHODOLOGY WORLD TRAVEL & TOURISM COUNCIL, AND OXFORD ECONOMICS City and Metro Definitions A wide geographic definition of cities has been used in this study to include metros or greater city areas rather than measuring just the urban core. The bulk of the reliable and consistent economic data across cities is available for this broader definition. Hence, to ensure consistent estimates of economic contribution this definition was adopted. Consistent definitions across cities have been used in all cases to ensure comparability. In the instances where travel data are only reported for a narrow city centre definition or for a wider geographic area, estimates are based on multipliers using all available sector or industry data. City travel data are collated in Oxford Economics Global City Travel (GCT) database using a narrow definition of the city in many cases, consistent with widespread reporting. GCT data used in this study have been adjusted accordingly. Further details are in the methodology appendix. GVA Methodology Calculation of economic impact reconciles two methodologies for cities consistent with the country level economic impacts estimated as part of the WTTC annual economic research. Results from the two methodologies are used as cross-checks to refine assumptions and derive a final combined estimate. Supply-side: Sectoral output by city is the starting point for analysis. Tourism ratios consistent with country level estimates are imposed to understand the proportion of output generated by tourism activity. As an example, if a city has a high concentration of activity in the hotels and restaurants sector then it is fair to assume that a large proportion of this activity is generated by tourist spending. This city will therefore have a large economic contribution from tourism. Demand-side: Tourism spend for each city as a destination is calculated first according to GCT definitions of cities which quantifies arrivals, overnights average spending and total tourism revenue. Where necessary, this is grossed-up to the wider metro definition for consistency. A ratio of GVA to Gross Output is then applied, consistent with the WTTC annual economic research and the industrial structure for the country and the city. Employment Methodology Tourism employment by city is derived from the Travel & Tourism GVA and labour productivity. Labour productivity for tourism characteristic sectors is estimated for the cities and the countries. A productivity multiplier is derived for the city relative to the country according to this sectoral detail and is then applied to country labour productivity from WTTC s annual economic research. METHODOLOGY The World Travel & Tourism Council is the global authority on the economic and social contribution of Travel & Tourism. WTTC promotes sustainable growth for the Travel & Tourism sector, working with governments and international institutions to create jobs, to drive exports and to generate prosperity. Council Members are the Chairs, Presidents and Chief Executives of the world s leading private sector Travel & Tourism businesses. Together with Oxford Economics, WTTC produces annual research that shows Travel & Tourism to be one of the world s largest sectors, supporting over 292 million jobs and generating 10.2% of global GDP in. Comprehensive reports quantify, compare and forecast the economic impact of Travel & Tourism on 185 economies around the world. In addition to the individual country reports, WTTC produces a world report highlighting the global economic impact and issues, and 24 further reports that focus on regions, sub-regions and economic and geographic groups. To download reports or data, please visit www.wttc.org Assisting WTTC to Provide Tools for Analysis, Benchmarking, Forecasting and Planning. Founded in 1981 as a commercial venture with Oxford University s business college, Oxford Economics is one of the world s foremost independent global advisory firms, providing reports, forecasts and analytical tools on 200 countries, 100 industrial sectors and over 3,000 cities. Their best-of-class global economic and industry models and analytical tools give an unparalleled ability to forecast external market trends and assess their economic, social and business impact. Headquartered in Oxford, England, with regional centres in London, New York and Singapore, Oxford Economics has offices across the globe in Belfast, Chicago, Dubai, Miami, Milan, Paris, Philadelphia, San Francisco, and Washington DC. The company employs over 300 full-time staff, including more than 200 professional economists, industry experts and business editors one of the largest teams of macroeconomists and thought leadership specialists underpinning the in-house expertise is a contributor network of over 500 economists, analysts and journalists around the world. For more information, please see www.oxfordeconomics.com, or email: mailbox@oxfordeconomics.com 16 WORLD TRAVEL & TOURISM COUNCIL CITY TRAVEL & TOURISM IMPACT 2017 17

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