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Euromonitor International’s Top City Destinations Ranking

Author: Caroline Bremner

Date published: 12 Dec 2008

Euromonitor International is pleased to release the results of its latest Top City Destinations Ranking, covering over 200 of the world's leading and most dynamic cities in terms of tourist arrivals. London ranked once again on top of Euromonitor International's Top City Destinations in 2007, but Asian cities – led by Hong Kong, Bangkok and Singapore - further reduced the gap on the UK capital and seriously threatened London's leadership in the mid term.

The deep economic turbulences of 2008 will not only impact the next Top City Destination Ranking but will completely reshape the city tourism market in the years to come. The hike in fuel prices has hurt the low cost carrier model in which most of European city travel relies on. However most worryingly, the financial crisis evolved into a global recession with unknown consequences that Euromonitor will aim to analyse below.

London still holds strong

London attracted 15.3 million tourists in 2007, down 2% in growth terms on the previous year. However, the UK capital maintained its rank at the top of Euromonitor International's Top City Destinations in 2007.

Hong Kong in second place was the most dynamic city within the top 5 City Destinations, attracting 12 million overseas tourists, 9% up on the previous year. Bangkok and Singapore in third and fourth place also surpassed the 10 million barrier, as the number of tourists increased by around 5% on 2006.

Top City Destinations Ranking 2007
'000 arrivals Ranking 000 tourist arrivals % growth 2006/2007
London  1 15,340 -1.9
Hong Kong  2 12,057 8.8
Bangkok  3 10,844 4.8
Singapore  4 10,284 5.4
Paris   5 8,762 -10.2
New York City  6 7,646 23.0
Antalya  7 7,292 13.8
Toronto  8 6,627 -3.6
Dubai  9 6,535 6.8
Istanbul  10 6,454 21.8
Rome  11 6,123 1.5
Barcelona  12 5,044 7.4
Seoul  13 4,994 1.5
Shanghai  14 4,800 11.2
Dublin  15 4,627 4.4
Kuala Lumpur  16 4,403 0.8
Pattaya  17 4,387 5.3
Mecca  18 4,200 10.5
Moscow  19 4,050 9.6
Macau  20 3,953 28.7
Amsterdam  21 3,909 0.2
Beijing  22 3,900 8.5
Cairo  23 3,896 10.0
Prague  24 3,696 -0.2
Vienna  25 3,637 4.5
Madrid  26 3,404 12.1
Guangzhou  27 3,300 31.4
Phuket  28 3,160 9.9
Vancouver  29 3,127 -0.9
Montreal  30 2,736 -5.0
Shenzen  31 2,700 41.8
Ho Chi Minh  32 2,700 14.8
Los Angeles  33 2,652 5.5
Rio De Janeiro  34 2,627 10.1
Mexico City  35 2,560 -6.3
Berlin  36 2,552 10.5
Mumbai  37 2,436 11.9
Tokyo   38 2,422 13.8
Miami  39 2,341 18.7
Brussels  40 2,328 2.6
Athens  41 2,300 7.9
Buenos Aires  42 2,286 9.0
San Francisco  43 2,270 13.9
Warsaw  44 2,210 9.8
Baii  45 2,183 13.0
Budapest  46 2,119 3.7
St.Petersburg  47 2,100 10.0
Munich  48 2,098 8.9
Orlando  49 2,055 3.1
Cancún  50 2,022 27.2
Delhi  51 1,920 11.9
Milan  52 1,914 0.7
Hangzhou  53 1,900 21.7
Sydney  54 1,869 0.9
Lisbon  56 1,863 8.6
Ryad  55 1,798 3.4
Venice  57 1,798 1.9
Johannesburg  58 1,739 23.9
Florence  59 1,729 0.8
Las Vegas  60 1,720 4.4
Jerusalem  61 1,610 1.7
Marrakech  62 1,600 6.7
Chiang Mai  63 1,584 -4.8
Honolulu  64 1,553 -10.4
Calgary  65 1,546 0.8
Frankfurt/Main  66 1,542 0.1
Zurich  67 1,418 3.6
Cape Town  68 1,374 3.8
Suzhou  69 1,350 5.0
Abu Dhabi  70 1,340 21.5
Zhuhai  71 1,340 1.6
Varadero  72 1,326 -8.4
Edinburgh  73 1,320 -1.3
São Paulo  74 1,307 19.3
Ha Noi  75 1,306 9.8
Copenhagen  76 1,300 -5.4
Nice  77 1,235 0.6
Tel Aviv  78 1,225 9.1
Washington DC  79 1,195 12.6
Manchester  80 1,180 29.4
Palma de Mallorca  81 1,172 -4.9
Chicago  82 1,147 8.0
Guilin  83 1,094 7.1
Boston  84 1,075 7.9
Bucuresti  86 1,073 2.2
Lima  85 1,063 18.0
Stockholm  87 1,063 6.0
Alexandria  88 1,013 4.6
Krakow  89 1,012 2.0
Rotterdam  90 1,009 -0.6
Luxor  91 1,009 5.8
Birmingham  92 970 24.5
Sharjah  93 970 5.1
Tallinn  94 965 -3.5
Cuzco  95 960 20.0
Melbourne  96 954 3.4
La Habana  97 943 -1.1
Osaka  98 937 13.8
Helsinki  99 903 7.3
Santiago  100 886 5.0
Lyon  101 869 2.2
Sevilla  102 865 -1.5
Tianjin  103 855 0.7
Nanjing  104 853 1.2
Salzburg  105 851 -2.7
Manila  106 839 8.0
Xi'an  107 810 1.2
Qingdao  108 803 1.0
Xiamen  109 800 1.0
Kyoto  110 788 13.8
Cebu  111 773 33.0
Cologne  112 768 1.1
Hamburg  113 754 2.1
Glasgow  114 743 0.3
Yakarta  115 740 12.7
Granada  116 738 4.2
Geneve  117 722 5.6
Poznan  118 683 25.8
Dalian  119 679 1.9
Mombasa   120 677 12.0
Valencia  121 670 16.5
Ras Al-Khaimah  122 660 7.6
Salvador de Bahia  123 650 0.6
San Diego  124 645 -0.8
Bruges  125 644 0.5
Chiba  126 639 13.8
Antwerp  127 636 0.1
Düsseldorf  128 632 0.4
Liverpool  129 627 0.3
Bogota  130 617 13.5
Kunming  131 615 1.3
Casablanca  132 610 6.7
Kolkata  133 609 11.9
Wuxi  134 606 1.9
Porto  135 603 9.0
Gdansk  136 600 7.1
Nairobi  137 598 12.0
Foz do Iguacu  138 588 18.0
Chongquing  139 568 4.2
Innsbruck  140 556 3.8
Florianópolis  141 516 64.5
Chengdu  142 514 1.1
Oslo  143 513 9.9
Leeds  144 510 74.7
Göteborg  145 497 1.3
Jaipur  147 492 11.9
Houston  146 478 5.0
Atlanta  148 478 0.3
Bristol  149 470 16.6
Bratislava  150 462 1.5
Oxford  151 450 0.2
Dubrovnik  152 449 7.4
Yokohama  153 448 13.8
Lucerne  154 447 0.5
Zagreb  155 432 11.1
San Jose  156 430 4.4
Quito  157 429 60.0
Goa  158 428 11.9
Luxembourg City  159 427 5.0
Aix-en-Provence  160 410 32.0
Reykjavik  161 407 9.7
Seattle  162 406 24.9
Tangier  163 393 6.7
Caracas  164 391 -10.0
Lille  165 384 1.4
Naples  166 381 -1.6
York  167 370 46.2
Stuttgart  168 363 1.3
Belgrade  169 360 2.7
Dallas  170 358 3.5
Fortaleza  171 358 1.5
Cardiff  172 356 0.3
Ljubljana  173 354 6.0
Nürnberg  174 352 -1.3
Cambridge  175 350 0.6
Montevideo  176 349 10.0
Monaco  177 343 9.6
Fès  178 342 6.7
Kamakura  179 332 13.8
Basel  180 319 1.3
Newcastle-upon-Tyne  181 319 0.6
Pune  182 316 11.9
Palermo  183 316 1.0
Sapporo  184 315 13.8
Rabat  185 305 6.7
Rhodes  186 296 2.1
Córdoba  187 290 14.6
Verona  188 289 1.9
Rimini  189 284 1.2
Málaga  190 282 4.5
Bologna  191 279 1.6
Ghent  192 278 6.6
Fukuoka  193 265 13.8
Brighton  194 264 -0.4
Dijon  195 262 8.4
La Paz  196 255 4.0
Inverness  197 253 0.4
Reims  198 249 10.1
Bath  199 247 0.8
Genua  200 243 1.5
Heidelberg  201 240 -2.1
Alicante  202 240 10.1
Turin  203 240 -2.2
Blackpool  204 230 -2.2
Bilbao  205 230 15.6
Dresden  206 230 1.3
Udaipur  207 221 11.9
Nottingham  208 218 -0.5
Lausanne  209 215 0.1
Santiago de Compostela  210 215 18.5
Strasbourg  211 214 1.7
Stavenger  212 213 16.3
Thessalloniki  213 213 4.9
Graz  214 210 2.0
Bergen  215 209 11.1
Bern  216 203 1.6
Reading  217 203 0.5
Shefield  218 200 0.8
Linz  219 200 0.2
Aberdeen  220 196 0.5
Bordeux  221 195 1.0
Avignon  222 186 2.2
Marseille  223 185 2.8
Rethymnon  224 181 1.7
Lugano  225 176 0.7
Zaragoza  227 170 5.7
San Sebastian  228 169 1.1
Siena  229 163 0.6
Tarragona  230 161 4.5
Trondheim  231 150 8.7
Agra  232 150 11.9
World Tourism Organisation, European Cities Tourism, National Statistics, National Tourist Boards, Local Tourism & Convention Bureaux, Trade Press (local and national newspapers, business travel news), Euromonitor International
Mainland China cities exclude visits from Hong Kong and Macao (and vice versa), but include visitors from Taiwan

The currency issue

New York, ranked in 6th place, outperformed all other cities in the top 15 in terms of growth in the number of tourist arrivals. The Big Apple received 7.6 million overseas tourists in 2007, 23% more than in 2006. The depreciation of the US dollar against international currencies, notably the Euro and the British pound, attracted many Europeans to the streets and shops of New York.

Between 2002 and mid-2008 the Euro jumped 45% against the dollar. The six year run-up of the Euro boosted not only the number of Europeans travelling to US cities, but also to many other destinations in which most tourism transactions are still dealt with in dollars.

Since July 2008 the Euro has lost 19% of its value against the greenback, while the British pound has fallen by 24%. The sudden strength of the US dollar will have a great impact on next year's Top City Destinations ranking, especially if, as the global economy continues to sour, the dollar rises even more.

Paris, ranked fifth, lost 10% of its international tourists in 2007, a figure only matched by Honolulu and Caracas. The sharp decline in tourist arrivals in Paris - and to a lesser extent in London - coupled with the sluggish performance of other European cities such as Rome, Amsterdam or Prague mark a turning point for European capitals.

The slowdown of the European city market in 2007 was partly due to the strength of the Euro, which pushed many Europeans to fly to other continents for the price of what would have cost them a long-weekend in any continental capital. It was also the result of an on-going trend towards the European countryside to the detriment of big cities.

Nevertheless, 2007 was not so gloomy for all European cities. Istanbul, ranked 10th, received 22% more international tourists in 2007 to reach 6.5 million. Meanwhile top cities such as Madrid, Berlin, St Petersburg, Birmingham and Manchester also witnessed two-digit growth rates.

Emerging regions outperform Europe in growth

The top 230 city destinations accounted for 35% of global tourist arrivals in 2007. International tourists to these destinations increased by over 6% on previous year, totalling 335 million tourists.

European cities received 40% of all international visitors. Despite the number of tourists experiencing an increase of 4% in 2007, European cities were outperformed by the impressive growth rates witnessed in other regions. The number of tourists visiting Asian and Latin American cities grew by 9% in 2007 on the previous year, while in the Middle East and North Africa region the number of visitors grew on average by 8%.

Asian city tourism is a golden opportunity

In the future, Asian cities will continue to outpace European city destinations in terms of international city tourist arrivals. Euromonitor International predicts that by 2013 more international travellers will visit more large cities in Asia than in Europe.

China is expected to be the key driver of this growth. Not only will Chinese cities attract more international visitors, but an increasing number of Chinese tourists will flock to visit cities in other Asian countries, with outbound tourism driven by rising disposable income and increased air connectivity.

In the meantime, Japanese and South Korean tourists will continue flocking to Asian cities, as long as their current economic recession does not plunge them into a deep and long depression. Furthermore, the dynamism expected in Asia will be driven by emerging source markets such as Russia, Malaysia or the Philippines.

The impact of fuel prices

During the first half of 2008 fuel prices rocketed to an unprecedented level, causing operating costs to spiral for all airlines. A direct consequence by some airlines was the introduction of fuel surcharges that increased the final price paid by travellers. That struck at the heart of European city tourism which relies on the short, discretionary trip where Europeans decide to take trips last minute tempted by special offers.

Furthermore, this also undermined the low fares sector, with some of the weaker carriers going bust such as XL or Sterling. The rise in fuel prices affected also the legacy carriers that could not compete with the more efficient cost-cutting model of large budget companies such as Ryanair and easyJet.

Although fuel prices have dropped dramatically since last summer's peak, the economic slowdown and the financial difficulties of the air travel industry will lead to further consolidation in coming years.

As carriers streamline their business, unprofitable flights will be closed. And as small no-frills carriers and charter airlines file for bankruptcy, many regional airports are set to see fewer planes landing in 2009. For example, Ryanair closed seven of its European bases in November. The budget airline will no longer land at Basel, Budapest, Mallorca, Krakow, Rzeszow, Salzburg and Valencia airports.

Valencia ranked 121st in 2007, up eight places on the previous year, partly as a result of the America's Cup that was held in Valencia that year. In 2008, the city will jump several places further thanks to the F1 European Grand Prix that was raced there for the first time, attracting many overseas tourists. However, Valencia will suffer from Ryanair's decision in 2009, as its airport will lose 60 weekly international flights, which could mean around 750,000 fewer passengers per year.

The global economic turmoil takes its toll

As most of the Western world slips into recession and emerging economies slow down sharply, the outlook of city tourism looks increasingly worrisome. Throughout 2008, what began with a credit crunch of financial markets developed into a real economic recession in North America, Europe and Japan that threatens to have serious consequences on the global tourism industry.

Consumers, unable to borrow and fearful for their jobs, are increasingly cutting their spending. The data published to this date on tourist arrivals points out that city tourism has been one of the first victims, as consumers cut their spending on travelling. Most European hotel chains have already reported fewer bednights figures during the first half of the year in key European cities. Although only a fragment of potential holidaymakers renounced to their annual holidays, data shows that they have reduced their short breaks abroad.

Research Analyst, Pablo Sáez Gil, comments “this not only affects European and North American cities, but significantly also Asian cities. Recently published data from IATA singles out Asia as the second region where passenger traffic has declined most sharply, only surpassed by Africa. This does not come as a surprise when the major Asian source markets of Japan, South Korea, also Singapore and Hong Kong (China) have all joined the recession club”.

The number of foreign tourists visiting China declined by nearly 2% during the first 10 months of 2008, despite the Beijing 2008 Olympic Games. The decline was mainly driven by the sharp slump of tourists from its major source markets. The number of South Koreans visiting China declined by 24% over the same period, while the number of Japanese tourists was down by 16%. Monthly like-for-like figures in cities such as Beijing, Hong Kong and Tokyo have steadily declined since September.

Meetings and Incentives deals with financial distress

In recent years, Meetings and Incentives travel has played a key role in developing city tourism with total business arrivals accounting for 20% of global arrivals. Fuelled by the globalisation of the world economy, Meetings and Incentives activities have helped to set some cities firmly on the map. According to the International Congress & Convention Association, Spain jumped two positions in 2007 to become the third most important country in terms of organising international events, after the US and Germany. Cities such as Madrid and Valencia strongly benefited from MICE activity in 2007.

The sudden downturn in the global economy in 2008 will hinder MICE travel activities across the globe. Several trade shows related to new technology have already been postponed as companies cut their marketing expenses, such as Digital Life in New York and Simo in Madrid. Although the amount of conferences and exhibitions will not suffer from a sudden slump, the market will experience a slowdown as some exhibitions are cancelled throughout 2009. What seems clear is that organised business events will gather fewer professionals in 2009, especially in Europe.

The credit crisis also caused financial distress to many local authorities across the globe. That, in turn, has put on hold some of the urban city projects planned, which partly aimed to increase city competitiveness in a global tourist market. The urban development in many cities – including development for the Olympics in London 2012 - could be hindered as a result. The way the different economies emerge from the economic gloom will shape the future of city destination tourism.

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