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Tourism Intelligence International

Figure 1:5
Tourism Expenditure of Selected Countries - 2006

While tourism expenditure from the emerging

markets might seem low in comparison to the
main traditional markets, what needs to be
considered is that these markets are growing at a
phenomenal rate.

High rate of growth from

emerging markets

Brazil leads the way with 38% average annual

growth in tourism expenditure between 2003 and
2006. India was in second place with 28%
followed by China with 19 percent. The more
traditional markets showed lower growth rates
over the same period. The UK did pretty well
with 10% growth followed by USA and Germany
with 8% and 5% respectively. Still these rates
were considerably lower than the emerging

Brazil leads the way in

terms of growth followed by
India and China

Travel and Tourisms Top Ten Emerging Markets

Tourism Intelligence International

Figure 1:6
Growth in Tourism Expenditure for Selected Countries, 2003-2006


Factors Driving Growth

We have seen that, historically, travel and tourism

demand has increased phenomenally in developed
countries like Germany, the UK, France and
USA. This was as a result of a number of
fundamental factors that were mainly favourable:
 Post war peace and economic prosperity;
 An increase in paid holidays;
 The emergence of the jet aircraft and
chartered flights;
 The search for sun, sea and sand;
 Government promotion of tourism;
 Extensive hotel construction, franchising and
 Cheap oil;
 The emergence of the computer and the
 Mass marketing; and
 Inexperienced, sun-lust travellers.


Travel and Tourisms Top Ten Emerging Markets

Tourism Intelligence International

Figure 1:7
Factors Driving Growth in travel and Tourism



Mass Consumers

Jet aircraft
Computers, telephone, telex
Limited reservation systems
Back office systems
Emergence of the Internet

Growth Factors
Driving Travel &



Sameness of hotels
Hotel & holiday branding
Promotional airfares
Mass marketing
Credit cards

Cheap oil
Extensive hotel construction
Charter flights
Packaged tours
Multinational hotel chains

Frame Conditions
Post-war peace and prosperity
Government tourism

In this section, we will examine the extent to

which these same factors are driving the growth
of outbound tourism demand from the emerging
markets and what other factors, if any, are at play
as well.

Travel and Tourisms Top Ten Emerging Markets

Paid holidays
Regulation of air transportation

Are the same factors

driving growth in Emerging



Tourism Intelligence International

Economic Growth and Prosperity

Post-war economic prosperity drove demand from

many of the now well-established travel markets.
And interestingly, it is also driving demand from
emerging markets. Emerging markets on a
whole, account for almost 40% of world GDP at
purchasing power parity, although still only 20%
at market value. The emerging markets featured
in this publication the BRIC markets, Eastern
Europe, South Africa and the United Arab
Emirates account for almost 16% of total world
GDP at market value, according to the
International Monetary Fund.

Emerging markets account

for 40% of Worlds GDP

China is ranked as the fourth largest economy in

the world after USA, Japan and Germany. Brazil,
India and Russia rank 10th, 11th, and 12th
Figure 1:8
Gross Domestic Product at Market Value of Selected Countries as at 2007
(Billion USD)

Source: International Monetary Fund, 2008


Travel and Tourisms Top Ten Emerging Markets

Tourism Intelligence International

While these economies are already large, what is

more striking is that they continue to grow
vigorously, at more than 7% per annum on
average over the past six years more than 2%
percentage points above the world average.
China has performed remarkably well with over
11% in real GDP growth in 2007. India has also
been growing rapidly, at close to 10% that same
year. Russia grew just over 8% and Eastern
Europe averaged 6.3% in 2007. Within Eastern
Europe, Slovakias economy stood out the most.
In 2007, Slovakia grew at over 10%. All other
Eastern European countries grew by 6% or more
with the exception of Hungary, which grew at 1.7

More than 7% annual

growth more than USA,
Germany and the UK

By contrast, the top traditional outbound travel

markets performed below the world average. The
UK, Germany and USA each had real GDP
growth of less than 3% in 2007. Indeed, the
emerging markets have become some of the main
engines of world economic growth today. The
vigour of growth in emerging markets and its
resilience are good news for the travel and
tourism industry. It suggests that the international
travel and tourism industry may be better able to
rely on the dynamism of these markets, in
particular, should growth in other traditional
markets lose momentum.
Indeed, tourism
destinations would be wise to take these new
markets very seriously. In fact, sluggish growth
from many traditional destinations, particularly in
Europe, is being boosted by a new dynamism
from the emerging markets.

Emerging economies are

the main engines of global
economic growth

Travel and Tourisms Top Ten Emerging Markets


Tourism Intelligence International

Figure 1:9
Real GDP Growth (%) of Selected Countries 2007

Source: CIA World Factbook, 2008

Consider now the microeconomic evidence for
the growing importance of the emerging markets
that is perhaps even more compelling. A few
examples follow: four companies among the
worlds 50 largest in terms of market value
originate from emerging markets. The first three
companies are Sinopec, State Grid and China
National Petroleum all from China and the fourth
one is Petrleo Brasileiro S.A. from Brazil.
Moreover, according to Forbes, seven of the 20
richest individuals in the world are from the
emerging markets.

Do not underestimate these

emerging markets

Table 1:2
Richest Emerging Market Citizens in the World

World Rank

Net Worth (USD)


Lakshmi Mittal

$45.0 billion


Mukesh Ambani

$43.0 billion


Anil Ambani

$42.0 billion


Rinat Akhmetov

$31.1 billion


Kushal Pal Singh

$30.0 billion


Oleg Deripaska


$28.0 billion



Travel and Tourisms Top Ten Emerging Markets