Euromonitor International's Top City Destination Ranking

Author: Caroline Bremner

Date published: 10 Jan 2010

Euromonitor International is pleased to release its latest Top City Destinations Ranking, covering 100 of the world's leading and most dynamic cities in terms of international tourist arrivals.

As the global economic crisis worsened in Q4 2008, international arrivals declined worldwide as travellers felt financially constrained and decided to stay close to home. However, the top 100 cities managed to end the year with 5.2% growth. A number of cities, such as New York and São Paulo, however, enjoyed double digit growth thanks to favourable exchange rates, aggressive government stimulus, increased air links and efficient promotional campaigns.

London still on top

London attracted a total of 15 million tourists in 2008, topping Euromonitor International's Top City Destinations. In late 2008, the pound weakened significantly against the euro, encouraging Eurozone visitors, especially from France, to do their Christmas shopping in London. This helped compensate for the shortfall of visitors from main source markets like the US.

New York City was the second most visited city with almost 11 million arrivals, up 23% in 2008. Thanks to its proximity and historic links, it is the number one destination for Western Europeans to the US. With the depreciation of the US dollar, many leisure visitors took advantage of inexpensive shopping and dining. The city is also the home to more headquarters of Fortune 500 companies than any other city in the US. However, the Lehman collapse had a direct impact on business arrivals.

Bangkok was the third most visited city and is highly dependent on inbound tourism from key markets such as the US, UK and Japan. It suffered a 6% decline in international visitors due to civil unrest leading to the closure of its airports in November 2008. To counter the weakening demand of long-haul travellers, the Tourism Authority of Thailand started to target alternative source markets from ASEAN, the Middle East and China.

Top City Destination Ranking

City	Ranking	2008 Arrivals ('000)	% growth 2007/2008
London	1	15,033.2	-2.0
New York City	2	10,786.1	23.1
Bangkok	3	10,209.9	-5.8
Singapore	4	10,115.6	-1.6
Kuala Lumpur	5	8,935.0	4.2
Paris	6	8,375.0	-4.4
Antalya	7	8,295.6	13.8
Dubai	8	7,584.5	13.4
Hong Kong	9	7,290.4	-1.0
Istanbul	10	6,682.7	3.5
Mecca	11	6,586.0	0.4
Miami	12	6,532.5	18.9
Toronto	13	6,406.2	-3.3
Rome	14	6,245.5	2.0
Shanghai	15	5,764.3	9.9
Los Angeles	16	5,072.2	5.7
Las Vegas	17	4,920.9	4.6
Barcelona	18	4,906.3	-2.7
Dublin	19	4,538.0	2.0
Amsterdam	20	4,527.0	1.5
Macau	21	4,457.0	12.8
Moscow	22	4,414.5	9.0
Pattaya	23	4,406.3	0.4
Cairo	24	4,311.4	10.7
Prague	25	4,033.5	3.6
Guangzhou	26	3,715.4	9.4
Kiev	27	3,700.0	5.7
Vienna	28	3,552.0	4.2
Madrid	29	3,423.5	0.6
Beijing	30	3,357.2	-13.0
Phuket	31	3,344.7	5.8
San Francisco	32	3,301.6	14.0
Shenzhen	33	3,153.3	12.8
Bucharest	34	3,147.9	17.8
Vancouver	35	2,978.0	-4.8
Taipei	36	2,939.3	-4.9
Orlando	37	2,929.6	3.2
Budapest	38	2,868.9	-2.4
Mugla	39	2,856.8	11.1
Rio de Janeiro	40	2,820.0	7.3
Berlin	41	2,747.1	7.5
Tokyo	42	2,642.6	9.1
Mexico City	43	2,598.2	1.5
Montreal	44	2,597.1	-5.1
Edirne	45	2,545.7	12.2
Brussels	46	2,413.3	3.7
Buenos Aires	47	2,399.0	2.5
St Petersburg	48	2,386.0	12.9
Seoul	49	2,342.0	8.6
Athens	50	2,310.0	5.8
Jerusalem	51	2,269.7	41.0
Seattle	52	2,256.0	13.2
Delhi	53	2,252.8	11.6
Sydney	54	2,235.0	-2.5
Mumbai	55	2,141.9	6.1
Munich	56	2,139.5	2.0
Cancún	57	2,072.1	2.5
Denpasar	58	2,045.8	17.4
Warsaw	59	1,989.0	-10.0
Sharm el Sheikh	60	1,973.7	13.6
Ho Chi Minh	61	1,972.0	16.0
Milan	62	1,954.2	2.1
Oslo	63	1,916.0	-2.2
Chennai	64	1,900.4	-1.0
Lisbon	65	1,872.1	6.5
Punta Cana	66	1,852.6	4.0
Johannesburg	67	1,835.0	5.5
Venice	68	1,832.2	1.9
Florence	69	1,767.0	2.2
Tel Aviv	70	1,718.0	40.3
Burgas	71	1,704.6	16.0
São Paulo	72	1,704.0	30.4
Marrakech	73	1,670.2	4.4
Agra	74	1,666.2	11.6
Varna	75	1,633.6	15.0
Riyadh	76	1,623.0	6.5
Jakarta	77	1,622.3	26.4
Chiang Mai	78	1,604.6	1.3
Auckland	79	1,580.4	1.6
Jaipur	80	1,563.4	11.6
Calgary	81	1,558.3	0.8
Cape Town	82	1,551.0	12.9
Hurgada	83	1,543.2	13.6
Frankfurt/Main	84	1,526.6	-1.0
Washington DC	85	1,521.6	12.7
Chicago	86	1,453.1	8.2
Hangzhou	87	1,436.4	13.6
Honolulu	88	1,393.4	-10.3
Zhuhai	89	1,345.4	16.7
Edinburgh	90	1,335.8	1.2
Abu Dhabi	91	1,312.0	6.8
Kolkatta	92	1,288.6	11.6
Wellington	93	1,287.5	4.4
Christchurch	94	1,236.5	6.0
Halong	95	1,235.7	12.3
Nice	96	1,235.0	2.0
Minsk	97	1,234.0	-24.7
Manchester	98	1,224.2	3.7
Zurich	99	1,205.0	15.0
Suzhou	100	1,195.3	8.8

Source: Euromonitor International from national tourist offices and national statistics

Volatile exchange rates

The fluctuating exchange rates of the euro, the British pound and the US dollar had a major impact on tourism flows in 2008. The pound weakened throughout 2008, accelerating its decline against the euro in Q3 as the global financial crisis unfolded. This discouraged UK outbound travel to Europe with Spanish cities, in particular, feeling the impact of a 3% decline in British arrivals in 2008. Barcelona endured a 2.7% decline in visitors.

The US was one of the biggest beneficiaries of a weak currency as the dollar hit new lows in the first half of the year. All top cities with the exception of Honolulu experienced growth.

Other big winners included Turkey and North Africa where the cost of travel is less expensive than in Europe, becoming even more attractive as the euro strengthened. Antalya in Turkey experienced growth of 13.8% in 2008 as the Turkish lira weakened. Cairo also experienced double digit growth of 10.7%. These countries had a strong advantage over other Mediterranean destinations such as Greece, Spain and Italy.

European cities lose share

As a mature destination, Europe continues to lose share to emerging markets, especially as international airlift, increased marketing efforts and infrastructure improves in developing countries. The two largest Western European cities, Paris and London, both saw declines in 2008. The region, based upon the cities in the top 100, experienced a sluggish 2.4% growth—the second slowest behind Australasia.

Cities located in the Middle East and Africa showed the strongest growth spurred by increasing business travellers and a rush of Europeans to inexpensive holiday destinations. The North American region, suprisingly, grew the second fastest thanks to strong tourist attractions and a weak dollar.

Latin America—a rising star

Although Latin American cities only accounted for 4.1% of city arrivals, the region saw an increase of 6.4% in 2008 and gained share. An increasing middle class and regional airlift expansion are fuelling inter-regional traffic. São Paulo was the third fastest growing city on the list.

In 2008 five major connections were established from São Paulo, linking the city to to North America (New York), Latin America (Mexico City), Europe (Paris), the Middle East (Dubai) and South Africa (Johannesburg). Adding to the 30 or more airlines that already fly to and from São Paulo, three airlines started operating flights to the city in 2008: Mexicana, OceanAir and Emirates. Emirates established the first connection between Brazil and the Middle East. This helped make São Paulo the third fastest growing city on the list.

Disappearing business traveller

The contraction in the global economy that ensued in late 2008 took a large toll on business travellers in the last quarter of the year. As corporations slashed travel budgets and forced business travellers to be more price-conscious, there was a shift away from luxury to mid-priced and budget segments, using the Internet as the first port of call for cheap deals. The dearth of business travellers hit global financial centres like London, one of the most affected business hubs due to its dependency on financial services.

The meetings and incentives segment also suffered as some exhibitions were either cancelled or postponed in 2009. According to the International Congress & Convention Association, European cities still held the largest number of meetings in 2008. Nevertheless, Athens, Buenos Aires, São Paulo and Tokyo were cited as remarkable newcomers in 2008, due to the positive results achieved in MICE tourism.

Disappointing results for Beijing

Tourism generated directly by the Beijing Olympic Games in 2008 was disappointing, curbed by tightened visa requirements and the effects of the global financial crisis on business travel. The city saw 13% fewer visitors in 2008.

The Beijing Olympic Games were intended to be a "coming out" party for China, demonstrating its role as a world economic power, and promoting itself as a tourist destination to a global audience. However, tighter visa restrictions were introduced without warning a few months before the Games due to concerns by the Chinese government about the potential for political unrest. Multiple-entry visas were particularly restricted, creating difficulties for business travellers and resulting in many meetings and conferences being rescheduled or cancelled.

Religious tourism shows resilience

While business travel was severely inhibited by the global economic crisis, other types of tourism such as religious tourism showed some resilience. The city of Mecca achieved small, but positive, growth in international arrivals in 2008, attracting 6.6 million tourists. The results for Rome were even stronger, registering a 2% growth in international arrivals and welcoming 6.2 million tourists in the same year.

Short term prospects look bleak

2009 will be one of the worst years on record for international travel and tourism. The global recession coupled with the H1N1 virus outbreak caused demand to plummet from both business and leisure tourists. Although there are signs of a recovery, with global real GDP growth revised upwards to -1.1% by the IMF, unemployment still remains at historic highs of over 7%. Arrivals data for the second half of 2009 suggest a bottoming out of demand and points to stabilisation in 2010, but not returning to pre-crisis levels until at least 2013.

Business tourism will take longer to revive as companies struggle to recover from the losses experienced during the global economic crisis. There are signs that corporations are increasing their travel budgets for 2010, but not resetting them to pre-crisis levels.

However, leisure tourism is expected to benefit from aggressive discounting and promotions to lure back tourists. The Secretary of Tourism from Mexico City, for example, has implemented a number of marketing actions to counter the negative publicity generated during the H1N1 outbreak, including the “Vive Mexico” or “Live Mexico” campaign, offering package holiday discounts.

Exchange rates will continue to be one of the main factors influencing tourism flows. After strengthening in the first quarter of 2009, the value of the dollar has declined, discouraging US travellers to Europe. Conversely, US gateway cities such as New York may experience growth if travel operators can tempt cautious long haul travellers with deals. The weak pound, in contrast, is likely to keep British tourists travelling to North Africa and Turkey.

Euromonitor International expects cities in emerging markets to continue to steal share of global arrivals. This shift will be accelerated by the expansion of low cost carriers and rising middle classes that are travelling in ever greater numbers, especially intra-regionally. Those cities serving as main airport hubs are expected to benefit from this regional movement, namely São Paulo, Buenos Aires, Johannesburg, Cairo and Kuala Lumpur.

Research Methodology

Euromonitor International's Top City Destinations Ranking (2009 edition) was built from the results of the company's global annual travel research programme conducted in 55 core countries by in-country analysts, in keeping with Euromonitor's global research methodology and definitions for travel and tourism.

The methodology applied for the 2009 edition of the Top City Destinations Ranking differs from previous editions. The past two editions were compiled by a global central analyst that collated arrivals data from select country and international sources such as the UNWTO and ETC.

For the 2009 edition, arrivals data was sourced directly from national tourist offices and national statistics offices at a national level for the 55 major markets under review. For the additional 150 market insight countries researched by Euromonitor at top-line level, the global travel research team identified a further 10 countries whose cities merited further investigation.

Main secondary sources include governmental, inter-governmental and other official sources; national and international specialist trade press and trade associations; industry study groups and other semi-official sources; reports published by major operators, travel retailers, online databases and the financial, business and mainstream press. Trade interviews were conducted with national tourist offices, trade associations and travel operators to fill gaps in secondary research.

Country data was then cross-checked on a regional basis by the regional research teams based in London, Vilnius, Chicago and Singapore. Examples of regional sources reviewed included TourMis and European Cities Marketing for Europe. Further top-down, global checks were conducted by the in-house global research team. Where irregularities were found between editions, supplementary research was conducted to confirm or amend those findings. We are satisfied that the results of the in-country research, coupled with the top-down global perspective ensures that the Top City Destinations Ranking is robust with a high level of data validation.

It is important to note that the Top City Destinations Ranking is not an exhaustive list and that its purpose is to highlight leading cities gleaned from the findings of Euromonitor's annual research programme with the emphasis on cities, rather than popular holiday resorts.

Definitions

International arrivals by city includes visitors from abroad that arrive at the city under review as their first point of entry, and also includes those visitors to the city that arrived in the country via a different point of entry, but then go on to visit the city in question during their trip.

Arrivals refers to international tourists, ie any person visiting another country for at least 24 hours, for a period not exceeding 12 months, and staying in collective or private accommodation. Each arrival is counted separately and includes people travelling more than once a year and people visiting several countries during one holiday. Domestic visitors are excluded.

Euromonitor International's arrival figures exclude same-day visitors, transit and cruise passengers as this can distort arrival figures at important border crossings and cruise destinations respectively. It also excludes those in paid employment abroad. Students that stay in a country for a period of more than 12 months are excluded and are considered as residents of the country of temporary residence. Military personnel and transportation crew are excluded, along with displaced people because of war or natural disasters.

The ranking focuses on capital city hubs and tends to exclude beach and ski resorts that may enjoy high volumes of international visitors.

Definitional Notes

All countries exclude day trippers and domestic visitors

Hong Kong excludes tourists from Mainland China

Macau excludes tourists from Mainland China and Hong Kong

Singapore excludes all Malaysian citizens arriving by land

Beijing excludes visitors from Hong Kong, Macau and Taiwan

Useful reference

Travel and tourism

http://www.unwto.org/index.php

http://tourmis.wu-wien.ac.at/index_e.html

http://www.europeancitiesmarketing.com/

http://www.strglobal.com/

For further information on travel and tourism research, including 35 travel city briefing reports from Beirut to Beijing, please contact Caroline Bremner, Global Travel and Tourism Manager, caroline.bremner@euromonitor.com