Tourism is one of Europe’s most important sectors, generating hundreds of billions in direct GDP benefits. The sector has been doing well in recent years, consistently growing above regional GDP since 2009. A number of cities are doing spectacularly well, according to Roland Berger research, and are far exceeding GDP growth. Istanbul leads the cities with more than 10 million overnight stays, Brussels leads in 2-10 million overnight stays and Dubrovnik in less than 2 million overnight stays.
Tourism in the EU is big business. EU-28 residents (aged 15 and above) alone made an estimated 1.2 billion tourism trips in 2014, for personal or business purposes. According to the European Tour Operators Association, the direct value of the total industry to EU-28 GDP comes to approximately $780 billion in 2014, with indirect effects reaching into the trillions. The sector employed more than 14 million directly in 2014 and is the region’s fourth largest industry behind retail, financial services and education.
Roland Berger’s recent report, titled ‘The European city tourism study 2015’, explores the growth of the industry, as well as star cities that together considerably outpace even country growth. It is the second study in a row after the European Capital city tourism study in the year 2012. The first study covered 24 European Capital cities, the current study enlarged the city scope and analysed 45 cities in Europe. The report used information and support supplied by the Austrian Hotel Association and STR Global.
The research highlights that recent years have seen a boom in European tourism. Growth in overnight stays in the focus countries has grown steadily from 101 in 2009 to 114 in 2014 on the 2005 based index. This is well above the GDP of the EU-28 at 105. The clear benefit of the tourism boom can be seen in the focus cities, throughout the index period, growing to 138 points by 2014.
In its report, the consulting firm clusters the cities in three rankings based on the number of overnight stays across 2014: ones with >10 million overnight stays, ones with 2-10 million stays, and ones with <2 million overnight stays. London has the most overnight stays, followed by Paris and Rome. Amsterdam comes in at number 11, while Germany has three contenders in the first category. Lisbon heads up the second category, while Brussels comes in at number 19.
Ranking by number of overnights is only a part of the analysis. Roland Berger further explores how the cities in the different ranking clusters performed across the sum of a range of metrics. These metrics include (with their weightings): growth in overnight stays (20%); number of overnight stays (10%); value creation/revenue per available room (20%); growth in bed capacity (15%); accessibility/number of direct flight connections (15%); congresses (10%); and internationality (10%).
The top 10-10-10
In the first cluster, Istanbul comes out on top, with the number one strongest performance in the growth of the number of beds and the growth in stays. Amsterdam, in the second spot, also performs well when it comes to the number of beds and visitor growth, while coming in second in stays per inhabitant. Paris is found on number three, with a strong performance in stays per inhabitant and value creation, and London comes in at number four. Rome and Moscow take the number nine and ten spots respectively; Rome performs poorly in capacity growth but high in value creation, while Moscow scores poorly in value creation, but highly in growth of beds.
Vladimir Preveden, Partner at Roland Berger and author of the study says: “After our first study conducted in 2011, Istanbul has experienced dramatic levels of growth in two key areas, namely in the increase in overnight stays as well as in the growth of bed capacities.” The very high tourism densities as measured by overnight stays per inhabitant with regards to Paris and Amsterdam reveal however some cause for concern. Preveden adds: “This would indicate increasing friction between sustainable tourism development in these cities and the quality of life for local inhabitants.”
In the second cluster, Brussels takes the cake, on the back of strong accessibility and congress attraction – yet scores badly in growth in stays. Copenhagen is attracting ever more visitors and is adding value; however, growth in capacity is a drag. Swiss capital Zurich comes in third with impressive value creation and internationality. Lisbon makes number four, with strong congress attraction and growth in stays. The third cluster is headed up by Croatia’s Dubrovnik, boasting the number one growth in stays and stays per inhabitant. Luxemburg comes in second, with relatively good scores across the board, besides growth in capacity in which it comes in at number 15. Lausanne comes in third, presumably due to its proximity to Geneva, with number-one accessibility and value creation.