1. Analysis of deviations of 2010.

This paper is intended as an overall initial synthesized assessment on the forecast made by the Tourism Activity Index for the year 2010 of the UAB (IUAB 2010) and to comment on the expectations for 2011. Because of the availability of data and the type used in the forecasts of IUAB, the bulk of the comparisons will be made regarding the Spanish case. For the Catalan case we already have a couple of indicators that enable us to see what happened.

Focusing first on the experience drawn from Catalonia, we must remember that the 2010 Index forecast a considerable slowdown of the adjustment of the flow of demand with respect to the strong decrease experienced in 2009. In any case, the general idea was one of reduction. Thus, for example, they had predicted a reduction in the number of foreign tourists of/by 4%, far, in any case, from the fall of 9.5% experienced in 2009. The data already available from the FRONTUR survey revealed that, on the contrary, the number of foreign tourists in 2010 would have grown by 3.7%.

Besides, the IUAB 2010 estimated real costs of 3.4% adjustment in Catalonia, but the implementation has been in fact an increase of 7.8%. Segmented data source markets are not yet available. In any case the error in the trend has been clear. Predictably, there may be two technical reasons to explain the bulk of this shift: first, the effect of the adjustment in prices of tourism products to the crisis on demand, which is evident in the housing sector, since the models used did not display a very significant effect in this direction, and the underlying idea is that managing price series closer to reality as possible is difficult. Secondly, the existence of a type of bottoming out of demand of certain markets which leads to, after a certain level, difficulties in further declines. Obviously, these situations will be specified better in the estimates for 2011.

As regards the analysis of the deviations for the Spanish case -of which we now have more information- though the idea of evolution was not as predicted, the absolute deviations of the variations are not high, e.g. the flow of tourists and costs. Specifically, the IUAB 2010 predicted a decline in the number of overseas tourists by 0.2% but it has actually increased by 1%. Quantitatively, the deviation is not high. In the case of overseas tourists' spending, our forecasts pointed to a real decline of 1.3%, but it remained stable. Errors are, however, greater regarding hotel room demand. The deviation in the case of foreign markets is relevant.

Table 1: Estimated growth of UAB Index 2010 based on the main tourist figures for Spain versus achievements (percentages)

Source: Compiled from data from the UAB Index 2010, Institute for Tourism Studies and National Institute of Statistics.

Despite the deviations occurred in 2010, which leads us to intensify our work even more, if possible, to refine the estimates for 2011, we believe that these are highly atypical in the history of the UAB Index, which generally has predicted well ahead of global trends and market bulk. We also point out that what is intended to clarify are not the levels of indicators, but the evolution, which implies a higher level of exigency in the study.

Learning outcomes to be applied in 2011 are: first, improving the price series, second, considering the distinction between the values of the estimated parameters (prices and income-effects) for markets, and, thirdly, reviewing/ checking the base series.

2. Forecast for 2011

The forecasts for 2011, at least at this point, seem to be moderately optimistic. For example, according to a survey conducted in January WTM, the bulk of the professionals surveyed reveal an improvement in the activity this year worldwide. The WTO predicts a growing number of international tourists between 4% and 5%, with nearly 1000 million tourists worldwide, an increase driven by a strong demand in the Asian and American market.

In the Spanish case, the projected recovery of the flows are favored, first, by economic growth in key source markets: so, according to the expectations of the European Commission in early March, the German economy is expected to grow at a rate of 2.4%, French 1.7% and 2% British. Second, we should mention the expected deterioration in emerging markets because of its good economic performance and offer measures taken (i.e. Russia, China). And third, the opening of new a positive outlook for 2011 on the basis of the problems of socio-political instability in the competing destinations in North Africa is predicted. Concerning the uncertainties that this situation generates in countries such as Tunisia, Libya and Egypt, tourists, and in early 2011, have embarked upon the replacement of tourism consumption, among other places, have helped Spain In particular, and the Canary Islands (with a rise in the first two months of 13.5%).

A greater weakness in the Spanish market, than in overseas markets may be evident, strongly influenced by weak growth, high unemployment rates and the impact on demand for public adjustment measures, in particular, developed in certain autonomous communities. This disparity can be seen very clearly in the evolution of hotel demand in Catalonia for the first two months of the year.

In any case, the situation is viewed with caution by operators, as shown in the last newsletter produced by CEHAT situation (OHE) or moderate growth projections developed by Exceltur tourism GDP (growth of tourism GDP 1%).

At the end of next June we plan to introduce the new IUAB 2011, with predictions for Catalonia and Spain, a task that is already working, with a monograph on the evolution and prospects of cruise tourism in Spain and Catalonia.

Table 2: Evolution of tourism demand in Spain and Catalonia for the period January-February 2011, and 2010 (percentages)

Source: Compiled from data from the Institute for Tourism Studies and National Institute of Statistics.

CINERT of the EUTDH-UAB Team