André Moura: Forecasting in tourism can be a risky business!

European City Tourism Monitor is an ECM-based survey project undertaken by the Research & Statistics Knowledge Group. Established three years ago, this forecasting tool delivers valuable data and over the years member city participation in the quarterly survey has steadily risen. In this piece, André Moura, a leading member of the Group, explains the background to the project and how the data are processed and used in ways which are relevant for operations and policy.

How did the project start? Was it meant as a long-term one?

The project started early in 2009. At the time, there were major concerns amongst city tourism professionals as to how the global economic downturn which had become pronounced in 2008 would impact on the volume and value of urban tourism affect city tourism (a bit like now, I’m afraid !). So, the Research & Statistics Knowledge Group decided to conduct a short survey every three months to gauge the ‘expert’ views of ECM members as to the likely level of tourism demand in their respective cities. We ask respondents to predict demand over the next quarter and to the end of the year – will it be up or down or more or less stable across the main business and leisure segments? When we started the Monitor, it was envisaged as a short-term exercise to give a more or less immediate barometer type reading of how city tourism was faring in the middle of the 2008 economic recession. However, once participating members started to get results from the survey, they found them useful and for this reason the project has continued into the medium-term and may well become a long-term feature.

What is the aim of the project?

The aim is to “feel the pulse” of European city tourism. What I mean by that is to get a reading of the extent to which tourism markets and activity are growing or declining in the current year. Just like a doctor feeling the pulse. The patients in this case are tourism professionals in the ECM network giving us their expert assessments.

How does it work?

Every three months, ECM Head Office emails members asking them to complete an online questionnaire giving their estimate for their respective cities the likely level of tourist bednights and average hotel prices during the next quarter. They are to do this on a ‘year on’ basis i.e. comparing expected level for the next quarter with actual from the previous year. Bednight estimates are disaggregated by reference to the following parameters: international/domestic; principal country ‘source’ markets (American, British, German, French, Italian, and Spanish); and leisure/business. Business tourism bednight forecasts are broken down further by reference to the following segments – MICE corporate, MICE non-corporate, and individual business travel. Finally, respondents are asked to assess likely end-year out-turns in respect of aggregate bednights. Once all the figures are collected, a short report and analysis of the main results is produced and distributed to ECM’s members.

How many cities usually participate in the survey?

Usually about 65 to 75 people, representing 55 to 60 city destinations.

In what way are the results useful for a city?

City tourism managers are inevitably preoccupied by trends in the demand for their respective offers, across business and leisure tourism segments. They want not only to see how they are doing but also they want to benchmark and compare themselves with other cities. The European City Tourism Monitor enables just such a ‘snapshot’ comparison to be made in the current year. Though nobody can predict the future with absolute certainty (and in that sense tourism forecasting can be a risky business), this is the next best thing and is as good as you can get! Moreover, there are few other forecasting vehicles and tools available. European City Tourism Monitor fills the vacuum in a fairly straightforward and easy manner, drawing on the interest and expertise ‘out there’ in the ECM network.

What can we learn from the results of the last edition of the survey in respect of trends in European city tourism?

I think the most important lesson is that after two years of recovering robustly for global economic recession, survey respondents are now taking a more cautious outlook into 2012. Many countries are faced with budget deficit and low economic growth scenarios, and the mood in the network might best be described as cautiously optimistic! There is concern as to the negative impact that financial crisis in Europe may have on domestic and international tourist flows during 2012. The growth rates sustained in 2010 and 2011 are not expected to be repeated this year, though the urban tourism sector will doubtless prove resilient and hopefully a dramatic downturn will not be experienced!

André Barata Moura was born on September 14th 1972. He graduated in economics at the New University of Lisbon and joined Turismo de Lisboa in 1998 where he is Head of Research and Statistics. His principal accountabilities activities are monitoring tourism demand, evaluating marketing activities, and input to strategic planning. André is an active member of ECM’s Research & Statistics Knowledge Group, and presently coordinates the activities of the Benchmark Group.