European capital city tourism

European capital city tourism Report – Analysis and findings Vienna, January 2012 Contents Page Management summary Paris, Amsterdam and Stockholm ...
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European capital city tourism Report – Analysis and findings Vienna, January 2012

Contents

Page

Management summary Paris, Amsterdam and Stockholm lead the ranking

3

A. Methodology and sources This study is based on online material, statistical data and expert interviews

5

B. Analysis and evaluation European capitals have been evaluated along a set of seven criteria

10

C. Conclusion City tourism is a key growth driver for the economy and professional strategy development is a key success factor

32

This document shall be treated as confidential. It has been compiled for the exclusive, internal use by our client and is not complete without the underlying detail analyses and the oral presentation. It may not be passed on and/or may not be made available to third parties without prior written consent from Roland Berger Strategy Consultants. RBSC does not assume any responsibility for the completeness and accuracy of the statements made in this document. © Roland Berger Strategy Consultants

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Management summary Paris, Amsterdam and Stockholm lead the ranking

European capital city tourism study: Management summary OBJECTIVE

ANALYSIS

RANKING

> Tourism to capital cities is a growth driver, outperforming both tourism to countries as a whole and GDP growth

> We use seven criteria to evaluate tourism in capital cities: growth in overnight stays, total number of overnight stays, bed capacity growth, value creation, internationality, accessibility and congresses

> To allow better comparisons, the cities were split into two clusters: Cluster 1 contains the top ten cities in terms of the number of overnight stays in 2010

> The study compares the figures for tourism in different European capitals, looking at current status, growth and success

> Berlin, Stockholm and Ljubljana saw the highest growth in the number of overnight stays over the last five years > London and Paris had by far the most overnight stays in 2010; Berlin and Rome came fourth and fifth > Amsterdam and Lisbon have most overnight stays per inhabitant, followed by Prague > Amsterdam, Lisbon, Stockholm, Zurich, Vienna, Rome and Copenhagen are the top performers in terms of growth in the number of overnight stays in the last five years and the number of overnight stays per inhabitant > London and Prague enjoy the longest overnight stays

> Paris tops the ranking in Cluster 1, followed by Amsterdam, Stockholm, Vienna and Berlin, in that order > Zurich tops the ranking in Cluster 2, followed by Lisbon and Copenhagen

> Ljubljana is the top performer in terms of growth in bed capacity in the last five years. Tallinn and Istanbul follow in second and third place, a long way behind > In terms of value creation in the form of revenue per available room, Paris, London and Amsterdam top the ranking. Prague and Madrid come at the bottom end of the ranking > London and Paris lead in terms of accessibility by air, followed at some distance by Amsterdam and Istanbul > Vienna hosts the most congresses, followed at some distance by Paris and Berlin 111129_Europ Capital City Tourism_final.pptx

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A. Methodology and sources This study is based on online material, statistical data and expert interviews

The study analyzes 24 European cities' success in the area of tourism Objective and focus cities Objective > The objective of the study is to benchmark the success of European cities in the area of tourism… > … and to produce findings on key developments, trends and challenges in the market

Focus cities Capitals of EU-27 countries Helsinki Oslo Stockholm

Belgrade, Istanbul, Zagreb and Zurich1)

Copenhagen London

Amsterdam

Berlin Brussels Prague Paris Luxembourg Bratislava Vienna Budapest Zurich Zagreb Ljubljana Belgrade

Cities for which data was out-of-date or insufficient to allow comparisons

Madrid Lisbon

24

Tallinn

Istanbul Rome Athens

focus cities 1) Zurich is included as it is more significant for tourism than the capital , Bern Source: Roland Berger

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The study is based on information from popular databases and interviews with experts Methodology and sources METHODOLOGY

SOURCES

1

2

3

4

5

Gather online material (tourism master plans, etc.)

Collect and analyze statistical data

Interview experts on methodology and trends in city tourism

Evaluate focus cities along predefined dimensions

Derive conclusions

> Websites of city tourist boards and marketing agencies

> ECM Benchmarking Report 2011

> Berliner Hotelverband

> Roland Berger

> Eurostat data on country level

> Deutscher Hotelund Gaststättenverband

> Minor differences in some criteria could not be avoided – accepted for the purpose of this report

> Intern. Congress and Convention Association (ICCA) > International Hotel Association (IHA) > TourMIS, statistical database for city tourism1)

> Österreichische Hoteliervereinigung > Wien Tourismus > Roland Berger experts with relevant project experience

1) TourMIS data lumps business and leisure together Source: Roland Berger

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4

EVALUATION OF FOCUS CITIES – BACKUP

We use a "barometer model" to evaluate and rank cities – Similar approach to the World Economic Forum ranking Evaluation method Evaluation criteria I

Overnight stays, CAGR 2005-2010 [%]

II Overnight stays per inhabitant [no.]

City

Published data

A

7.3

B

3.5

C

-0.5

D

-0.4

E

4.3

Barometer Criteria results weighting1)

Calculation

City with the highest value given 100 100

City with lowest value given 0 0

A

100

B

51

C

0

D

1

E

61

A

42

A

6.1

B

13.0

Remaining values interpolated, e.g. E:

B

100

C

6.4

C

44

D

1.0

(7.0-1.0)/ (13.0-1.0) x 100

D

0

E

50

E

7.0

= 50

Total barometer results

Rank

A: 100 x 60% + 42 x 40% =

77

B:

71

2

C:

18

4

D:

1

5

E:

57

3

1

60%

40%

1) Indicative only Source: Roland Berger

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4

EVALUATION OF FOCUS CITIES – BACKUP

We group cities into two clusters for the final ranking to ensure we are comparing like with like Ranking of cities in two clusters Cluster 1

Overnight stays, 2010 [m]

Cluster 2

Overnight stays, 2010 [m]

> London

48.7

> Lisbon

6.2

> Paris

35.8

> Budapest

5.9

> Berlin

20.8

> Brussels

5.6

> Rome

20.4

> Athens

5.4

> Madrid

15.2

> Copenhagen

5.1

> Prague

12.1

> Zurich

3.7

> Vienna

11.7

> Oslo

3.3

> Amsterdam

9.7

> Helsinki

3.2

> Istanbul

9.1

> Tallinn

2.3

> Stockholm

6.3

> Bratislava

1.4

> Belgrade

1.3

> Zagreb

1.0

> Luxembourg

0.8

> Ljubljana

0.7

Source: Roland Berger

COMMENTS

> Interviewees pointed out that cities generally compare their performance to a limited set of other cities > Their selection of cities for comparison depends mainly on performance, size, maturity of the tourism industry and visitor motivation

> Accordingly, we grouped cities into two clusters for the final ranking > Data on revenue per available room, average daily room rate and occupancy was only available for the ten cities in Cluster 1 – the clustering means that we can analyze value creation in city tourism for this group at least

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B. Analysis and evaluation European capitals have been evaluated along a set of seven criteria

Tourism has expanded much faster than the overall economy in Europe in recent years – City tourism has performed best Development of the tourism industry City tourism, CAGR 2005-2010 [index =100]

COMMENTS

116

> City tourism suffered less during the economic crisis than expected

114

114

> In the crisis year 2009, the GDP of the EU-27 fell 4.3% while city tourism decreased by just 3.5%

112

112

111

110 108

108 106 104

104

102

103

100

106

107

107

106

107

105

108 104

103

100

2005

2006

2007

Overnight stays in focus cities

2008

2009

2010

> In 2010, GDP recovered slowly while city tourism recovered fast, with overnight stays up 6.8% > Tourism is a key growth driver for the overall economy. City tourism outperforms the rest of the industry > We analyze the top cities, their performance, trends and challenges in the report

GDP of EU-27

Overnight stays in focus countries Source: ECM, Eurostat, TourMIS, Roland Berger

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We analyze the cities along seven different dimensions Evaluation criteria Dimensions

Selected benchmarking criteria

Period

Weighting Weighting cluster 1 [%] cluster 2 [%]

I

GROWTH IN OVERNIGHT STAYS

CAGR for overnight stays

20052010

20

30

II

NUMBER OF OVERNIGHT STAYS GROWTH IN BED CAPACITY

No. of overnight stays relative to inhabitants

2010

10

10

CAGR for bed capacity

20052010

15

20

IV

VALUE CREATION

Revenue per available room

2010

20

n.a.

V

INTERNATIONALITY

Share of European tourists

2010

5

Share of non-European tourists

2010

5

III

10

5

VI

ACCESSIBILITY

Number of direct flight connections

2011

15

20

VII

CONGRESSES

Number of congresses

2009

10

10

 100% Criteria for all cities Source: Roland Berger

Criterion for Cluster 1 cities only

> The different dimensions selected for the evaluation are well balanced

10

5

COMMENTS

 100%

> The growth in the number of overnight stays is used as the key criterion; increasing this figure is the overall goal. The current number of overnight stays is also included as otherwise mature markets would be at a disadvantage > Due to limited data, revenue per available room is used for Cluster 1 cities only 111129_Europ Capital City Tourism_final.pptx

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I

GROWTH IN OVERNIGHT STAYS

Berlin, Stockholm and Ljubljana enjoyed the biggest increase in the number of overnight stays in the last five years Growth in the number of overnight stays, CAGR 2005-2010 [%] 7.3 5.7

5.2

4.5

4.4

4.3

4.2

4.1

3.9

3.6

3.5

3.4

3.3

2.8

Avg. 2.4

2.4

1.5

1.2

0.5

0.1 -0.4 -0.5 -0.7 -2.1

-5.4 BER STO1) LJU HEL MAD VIE ROM ZUR LIS BRU AMS TAL OSL COP ZAG PRA PAR BRA LUX1) IST1) LON BEL BUD ATH1) 1) 2005-2009 only Source: TourMIS, ECM, Roland Berger

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II

NUMBER OF OVERNIGHT STAYS

London and Paris had by far the most overnight stays in 2010 – However, some cities are much bigger than others Number of overnight stays, 2010 [m] Inhabitants [m]

7.7 4.4 3.4 2.7 3.2 1.2 1.7 0.7 8.8 0.8 0.5 1.7 1.0 0.8 0.5 0.4 0.6 0.6 0.4 0.4 1.2 0.8 0.1 0.3 48.7

35.8

20.8 20.4 15.2 12.1 11.7

9.7 9.1

6.3 6.2 5.9 5.6 5.4 5.1

3.7 3.3 3.2 2.3 1.4 1.3 1.0 0.8 0.7

LON PAR BER ROM MAD PRA VIE AMS IST1)STO1) LIS BUD BRU ATH1) COP ZUR OSL HEL TAL BRA BEL ZAG LUX1) LJU 1) 2009 Source: TourMIS, ECM, Eurostat, Roland Berger

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II

NUMBER OF OVERNIGHT STAYS

Amsterdam and Lisbon had the most overnight stays relative to the number of inhabitants Overnight stays per inhabitant, 2010 Amsterdam Lisbon Prague Copenhagen Zurich Luxembourg Paris Stockholm Rome Vienna Athens London Berlin Oslo Tallinn Helsinki Brussels Madrid Budapest Bratislava Ljubljana Zagreb Belgrade Istanbul

1.3 1.1 1.0

3.4 3.2 2.7

Source: TourMIS, ECM, Eurostat, Roland Berger

4.7

7.0 6.7 6.4 6.1 5.9 5.7 5.7 5.3

8.2 7.7 7.5

Avg. 6.4

9.0

10.3 10.1 9.7

13.0 12.6

COMMENTS

> Amsterdam and Lisbon had by far the most overnight stays relative to the number of inhabitants > The number of inhabitants can be hard to define as it depends on how the area of the city is defined, however it gives the figures more context > Prague was the best performer in CEE > Most CEE countries have a below-average number of overnight stays per inhabitant

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II

NUMBER OF OVERNIGHT STAYS

Amsterdam and Lisbon are the top performers – Large number of overnight stays today and strong growth since 2005 Current volume and growth matrix CAGR for overnight stays 2005-20101) [%] 8 BER STO 6 MAD HEL VIE LIS LJU ZUR ROM 4 OSL AMS BRU COP TAL 2 ZAG PRA PAR BRA IST LON LUX 0 BEL

B

CONCLUSIONS

– Above-average number of overnight stays per inhabitant and A A STARS above-average growth

-2

B C

BUD

-4

D 0

ATH 1

2

3

4

C D

5 6 7 8 9 10 11 12 13 Overnight stays per inhabitant, 2010

1) 2005-2009 only for Athens, Istanbul, Luxembourg and Stockholm Source: TourMIS, ECM, Eurostat, Roland Berger

> Amsterdam, Lisbon and Stockholm are top performers HIGH POTENTIALS – Relatively small number of overnight stays but above-average growth > Berlin, Stockholm and Ljubljana have the strongest increase in the number of overnight stays – Berlin is well on its way to joining the "stars" > Ljubljana shows positive growth, but current volumes are still low FOLLOWERS – Above-average number of overnight stays but belowaverage growth > Paris, Prague & Luxembourg have had below-average growth since 2005 > Athens has the lowest CAGR of the focus cities LAGGARDS – Below-average number of overnight stays and belowaverage growth > Belgrade and Budapest risk losing ground to other cities if no action is taken > Need to identify reasons for poor performance Average 111129_Europ Capital City Tourism_final.pptx

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II

NUMBER OF OVERNIGHT STAYS

Overnight stays per arrival are low in city tourism – Even small increases here help draw people away from the well-beaten path Overnight stays per arrival1), 2010 CAGR 20052010 [%]

-1.2 -1.3 -0.4 -1.8 1.5 2.6

2.5

2.4

2.4

2.4

0.3 -1.1 0.1

2.3

2.2

2.2

1.1 -1.3 -0.6 -1.4 0.8

2.1

2.1

2.0

0.0 -0.8 0.3

0.7 -0.5 -1.5 -0.8 -10.7

Avg. 2.0

1.9

1.9

1.9

1.9

1.8

1.8

1.8

1.7

1.7 1.2

LON PRA ROM2) BUD2) PAR BER

VIE

LIS

BEL ATH2) BRA MAD LJU BRU2) LUX2) AMS TAL

HEL ZAG ZUR IST2)

1) No figures available for Copenhagen, Oslo and Stockholm 2) 2005-2009 only Source: TourMIS, ECM, Roland Berger

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III

GROWTH IN BED CAPACITY

Ljubljana shows outstanding growth rates in bed capacities over the last five years – Good indicator of market trust by private investors Bed capacity, CAGR 2005-20101) [%] Hotel beds '000, 2010

5

15 106 112 12

34

44

48

83

19

56

6

94

76

27

7

16

17

35 152 31 213

7

11.4

7.0

6.4

5.9 5.8

5.3 5.0 4.5 4.5 4.0 3.7 3.4 3.3 3.0 2.8 2.5 2.4 2.3

Avg. 3.4

1.6 0.3 -0.5 -2.5 -3.0

LJU TAL IST BER BRA STO BUD AMS PRA OSL VIE LUX ROM MAD COP ZAG HEL ZUR LIS PAR BRU LON BEL 1) No data for Athens; 2005-2009 only for Bratislava, Brussels, Budapest, Istanbul, London, Luxembourg and Stockholm Source: ECM, Roland Berger

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IV

VALUE CREATION (CLUSTER 1 CITIES ONLY)

Paris and London achieve the highest revenue per available room for Cluster 1 cities Revenue per available room (RevPAR)1) Revenue per available room, 2010 [EUR]

Avg. daily room rate and occupancy rate, 2010

PAR

Average daily room rate [EUR]

131

LON

122

180

AMS

95

160

ROM

92

140

STO

82

VIE

60

BER

60

MAD PRA

ROM AMS

STO

100

VIE

MAD 80

PRA

BER

60

57 44

LON

120

67

IST

PAR

Avg. 81

50

55

60

65

Average 1) Comparable data available for Cluster 1 cities only; For Istanbul only RevPAR 2009 available Source: IHA, STR Global, Factiva, Roland Berger

70

75 80 85 90 Occupancy rate [%]

COMMENTS

> RevPAR is calculated by multiplying the average daily room rate by the occupancy rate > Paris and London achieve highest RevPAR among Cluster 1 cities, with both the highest room rate and highest occupancy rate > Clear positive correlation between occupancy rates and room rates > Prague, Madrid and Berlin have both below-average room rates and below-average occupancy rates – need to examine possible reasons, e.g. oversupply of hotel beds 111129_Europ Capital City Tourism_final.pptx

19

IV

VALUE CREATION (CLUSTER 1 CITIES ONLY)

Increasing bed capacity is not always a sign of good prices and occupancy levels Revenue per available room (RevPAR) and changes in bed capacity CONCLUSIONS

Revenue per available room, 2010 [EUR] 140

B

130 120 110

– Above-average increase in bed capacity and above-average A A STARS revenue per available room

Paris

London

100

Rome

90

B Amsterdam Stockholm

80 70

Vienna

60

Madrid Berlin

50 40

Prague

D

30 -3

-2

-1

0

Statistical correlation

C

Istanbul

C D

1 2 3 4 5 6 7 8 Bed capacity, CAGR 2005-20101) [%]

> Amsterdam, Stockholm are the top performers, with both high RevPAR and strong capacity growth CASH COWS – Above-average RevPAR but below-average capacity growth > In London, bed capacity has been falling over the last five years; in Paris, it remained almost static QUESTION MARKS – Above-average bed capacity growth but belowaverage RevPAR > Risk that revenue per available room will fall further as bed capacities rise > However, if there is sufficient demand for the new capacity, significant potential for positive development exists LAGGARDS – Below-average growth in bed capacity and belowaverage RevPAR > Madrid is below-avg. in terms of both capacity growth and RevPAR > Need to find out why

1) 2005-2009 only for Istanbul, London and Stockholm

Source: ECM, IHA, STR Global, Roland Berger

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V

INTERNATIONALITY

Share of international overnight stays indicates the diversification of a city's tourism markets – Significant differences between cities Share of inbound overnight stays, 2010 [%] 96

94

20

13

90 18

90 5

86 17

86

81

79

21 23

Avg.

77 19

39

77 29

75 18

74

72

70

22

70

66 9

29

65

63

14 28

76

81

711) 57 7

24

85 72

54

69

65

54 14

19 41

41 10

59

58 40

48

57

52

57 41

51

50 34

31

40

35

55

31

LJU LUX PRA TAL BUD BRU AMS LON VIE ZUR ZAG LIS IST ATH ROM BEL COP PAR BRA MAD HEL STO BER OSL Non-European inbound

European inbound

Total inbound (split between European and non-European not available)

1) Including Istanbul, Rome, Stockholm and Oslo, for which the split between European and non-European was not available Source: TourMIS, ECM

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VI

ACCESSIBILITY

London and Paris are by far the most accessible cities in Europe for tourists arriving by air Number of direct flight connections1) [flight schedule for summer 2011] London Paris Amsterdam Istanbul Rome Madrid Brussels Zurich Vienna Stockholm Berlin Copenhagen Prague Athens Lisbon Helsinki Budapest Luxembourg Zagreb Tallinn Oslo Ljubljana Bratislava Belgrade

29 28 24 23 22 16

43

65

80 78

96 93

130 129 118 111 111

153 146

176 168

205

301 292

COMMENTS

> Low-budget airlines with more affordable tickets have been a crucial growth driver in city tourism > The increasing significance of accessibility by air is a risk factor for cities not located close to international hubs > Apart from offering tax incentives, it is difficult for cities to increase the number of flight connections they have

Avg. 110

1) Destinations connected with at least one direct flight per week Source: Roland Berger

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VII

CONGRESSES

Vienna is the clear leader in congress tourism in Europe, followed by Paris and Berlin No. of congresses hosted1), 2009 CAGR '04-'09 [%]

7.0 -0.7 1.5 5.4 6.6 3.9 4.9 4.4 -0.2 0.5 1.8 9.0 6.4 4.7 0.3 23.3 0.4 0.4 15.5 1.6 20.1 -5.2 0.0 0.0 160 131 129 103 102 98

98 87

87

86

83

80

75

73

69 57

56

50 35

26

25 13

12

10

VIE PAR BER COP STO LIS AMS MAD BUD PRA LON IST ATH BRU ROM ZUR HEL OSL TAL LJU BEL BRA LUX ZAG 1) Most recent year with comparable data is 2009 Source: ICCA

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VII

CONGRESSES

A significant correlation exists between the number of congresses hosted and the number of overnight stays Correlation between congresses and overnight stays, 2009 COMMENTS

Overnight stays (m) 48

LON ROM

12

MAD

BER

PRA

10

IST

8 ZUR

BRA

4

LUX BEL ZAG

2

OSL LJU

0 0

10

20

30

TAL 40

Statistical correlation

Source: TourMIS, ECM, ICCA, Roland Berger

BUD

BRU

VIE AMS

LIS

ATH

6

> In 2010, for the third year in a row, Vienna hosted the largest number of congresses

PAR

> Other CEE capitals have a very small number of both congresses and overnight stays > The correlation reveals that congresses are a strong driver of tourism

STO COP

HEL 50

60

70

80

90 100 110 120 130 140 150 160

No. of congresses 111129_Europ Capital City Tourism_final.pptx

24

VI+VII ACCESSIBILITY & CONGRESSES

Good accessibility by air is a prerequisite for being a successful congress location Correlation between direct flight connections and congresses1) COMMENTS

No. of congresses 160

VIE

140

PAR

BER

120

COP

100

LIS BUD

80

PRA ATH

60

HEL ZUR

OSL

STO

AMS

MAD BRU

IST ROM

LON

0 0

20

40

Statistical correlation

60

> The analysis shows that fewer than 60 direct flight connections means insufficient accessibility and congress numbers are significantly lower > From 60 to 180 connections, the criterion of accessibility is met – most successful congress destinations fall into this group

40

TAL BEL LJU BRA 20 LUX

> A significant correlation is found between flight connections and number of congresses

ZAG

> Additional connections above 180 do not correlate with a significant increase in congresses Flight connections

80 100 120 140 160 180 200 220 240 260 280 300 320

1) Number of direct flight connections [flight schedule for summer 2011]; most recent year with comparable data on congresses is 2009 Source: ICCA, Roland Berger

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Paris and Amsterdam score best – Rome, Stockholm, Berlin and Vienna follow, neck and neck Results of the ranking1)

1 2

Paris Amsterdam

1

6

Rome

2

7

London

3

8

Madrid

3

Stockholm

4

Vienna

9

Prague

4

Berlin

10

Istanbul

1) Cluster 1 cities Source: Roland Berger

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26

BACKUP

Paris and Amsterdam score best – Stockholm, Vienna and Berlin follow, neck and neck Evaluation of Cluster 11) – barometer (100 = best performer) Overnight stays, CAGR

Overnight stays per inh.

City/weight [%]

20

10

15

20

5

52)

15

10

TOTAL

1 Paris

22

60

31

100

45

64

96

68

62

2 Amsterdam

51

100

79

59

81

46

53

32

61

3 Stockholm

80

56

87

44

0

n.a.

11

36

51

4 Vienna

61

50

69

26

74

31

16

100

50

4 Berlin

100

42

94

18

0

0

7

66

50

6 Rome

60

54

66

55

59

n.a.

35

0

49

7 London

0

44

0

90

77

100

100

15

48

8 Madrid

62

31

62

15

27

48

28

20

38

9 Prague

26

78

78

0

100

28

0

19

33

10 Istanbul

1

0

100

19

62

n.a.

39

12

31

Evaluation criteria

Bed capacity, RevPAR CAGR

Non-domestic share

Non-Eur. share

Accessibility

Congresses

1) Top 10 cities in terms of absolute number of overnight stays 2010 – clustering enables better benchmarking 2) Where the non-European share was not available, the criterion's percentage weight was distributed equally among the other criteria for calculating the total result Source: Roland Berger

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27

BACKUP

The barometer is based on the results of the evaluation Evaluation of Cluster 1 – summary of results Evaluation criteria

Overn. stays, CAGR [%]

Overn. stays per inh. [no.]

Bed capacity, CAGR [%]

RevPAR [EUR]

Non-domestic share [%]

Non-European share [%]

Accessibility [no. dir. flights]

Congresses [no.]

City/weight [%]

20

10

15

20

5

5

15

10

1 Paris

1.2

8.2

0.3

131

62.9

28.4

292

131

2 Amsterdam

3.5

13.0

4.5

95

80.9

23.1

205

98

3 Stockholm

5.7

7.7

5.3

82

40.9

n.a.

118

102

4 Vienna

4.3

7.0

3.7

67

77.3

18.8

129

160

4 Berlin

7.3

6.1

5.9

60

40.9

9.9

111

129

6 Rome

4.2

7.5

3.3

92

70.0

n.a.

168

69

7 London

-0.5

6.4

-2.5

122

79.0

38.7

301

83

8 Madrid

4.4

4.7

3.0

57

54.4

23.8

153

87

9 Prague

1.5

10.3

4.5

44

90.3

17.9

96

86

10 Istanbul

-0.4

1.0

6.4

60

71.5

n.a.

176

80

Source: TourMIS, ECM, ICCA, Roland Berger

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Zurich wins the Cluster 2 ranking ahead of Lisbon and Copenhagen Results of the ranking1)

1 2 3 4 5 6 7

Zurich

1

Lisbon

2

Copenhagen

3

Brussels Ljubljana Helsinki Tallinn

8 9 10 11 12 13 14

Oslo Budapest Athens Luxembourg Zagreb Bratislava Belgrade

1) Cluster 2 cities Source: Roland Berger

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29

BACKUP

Zurich, Lisbon and Copenhagen top the ranking for Cluster 2 cities Evaluation of Cluster 21) – barometer (100 = best performer) Evaluation criteria

Overnight stays, CAGR

Overnight stays per inh.

Bed capacity, CAGR

Non-domestic share

Non-European share

Accessibility

Congresses

City/weight [%]

30

10

202)

5

52)

20

10

TOTAL

1 Zurich

90

75

36

69

100

88

51

73

2 Lisbon

88

100

32

64

69

49

95

69

3 Copenhagen

77

78

40

49

38

73

100

68

4 Brussels

85

36

17

84

65

100

68

67

5 Ljubljana

100

14

100

100

62

5

17

62

6 Helsinki

93

40

37

31

37

48

49

57

7 Tallinn

83

40

70

90

0

9

27

52

8 Oslo

82

42

49

0

n.a.2)

6

43

46

9 Budapest

31

20

55

85

50

38

83

45

10 Athens

0

49

n.a.2)

58

100

59

70

43

11 Luxembourg

52

68

44

98

34

21

2

42

12 Zagreb

73

2

38

67

56

10

0

38

13 Bratislava

56

18

61

37

10

5

3

34

14 Belgrade

44

0

0

51

17

0

16

18

1) Top 11-24 cities in terms of absolute number of overnight stays 2010 – clustering enables better benchmarking 2) Where bed capacity CAGR or the non-European share was not available, the criterion's percentage weight was distributed equally among the other criteria for calculating the total result Source: Roland Berger

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30

BACKUP

The barometer is based on the results of the evaluation Evaluation of Cluster 2 – summary Evaluation criteria

Overnight stays, CAGR [%]

Overnight stays per inh. [no.]

Bed capacity, CAGR [%]

Non-domestic share [%]

Non-European share [%]

Accessibility Congresses [no. direct flights] [no.]

City/weight [%]

30

10

20

5

5

20

10

1 Zurich

4.1

9.7

2.3

76.7

29.0

130

57

2 Lisbon

3.9

12.6

1.6

73.7

21.6

80

98

3 Copenhagen

2.8

10.1

2.8

64.8

14.1

111

103

4 Brussels

3.6

5.3

-0.5

85.8

20.7

146

73

5 Ljubljana

5.2

2.7

11.4

95.6

19.8

23

26

6 Helsinki

4.5

5.7

2.4

53.7

13.8

78

56

7 Tallinn

3.4

5.7

7.0

89.7

4.8

28

35

8 Oslo

3.3

5.9

4.0

34.8

n.a.

24

50

9 Budapest

-2.1

3.4

5.0

86.4

17.0

65

87

10 Athens

-5.4

6.7

n.a.

70.1

29.1

93

75

11 Luxembourg

0.1

9.0

3.4

94.4

13.0

43

12

12 Zagreb

2.4

1.3

2.5

75.4

18.3

29

10

13 Bratislava

0.5

3.2

5.8

57.5

7.3

22

13

14 Belgrade

-0.7

1.1

-3.0

65.8

9.0

16

25

Source: TourMIS, ECM, ICCA, Roland Berger

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31

C. Conclusions City tourism is a key growth driver for the economy and professional strategy development is a key success factor

City tourism strategies are available online for just 7 of the 24 capital cities in the study Tourism strategies available online1)

AMSTERDAM 2009-2012

BERLIN 2011

HELSINKI 2011

LISBON 2011-2014

LJUBLJANA 2007-2013

LONDON 2009-2013

VIENNA 2010-2015

Strategic marketing & communication plan

Tourismuskonzept Berlin

Helsinki's tourism strategy

Turismo de Lisboa strategic marketing plan

Strategic development and marketing plan

London Tourism Action Plan

Tourismuskonzept 2015

> SWOT > Tourism product development > Strategy and objectives > Marketing tools > Financial framework

> SWOT > National/ international benchmarks > Visitor structures, market segments > Strategic targets and actions

> Strategic targets > Tasks > KPIs

> Vision and ambition > Objectives > Positioning/ branding: markets, segments, products > Implementation programs

> SWOT > Quantitative and qualitative objectives > Positioning, branding, selling proposition > To-do's, responsibilities, timing

> Balanced scorecard: objectives, KPIs, actions > Strategic framework with regional targets > Strategic priorities > Action plan/timing

> Trends and key success factors > Markets and competitors > Targets, positioning and image > Actions and stakeholders > Marketing concept

1) It is assumed that if a city has a professional tourism strategy, it also makes it available online Source: City tourism strategies, Roland Berger research

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33

Cities with a professional tourism strategy show stronger growth in the number of arrivals and overnight stays Impact of a professional tourism strategy Growth of tourism – CAGR 2005-20101) [%]

COMMENTS

ARRIVALS

> Only 7 of the 24 focus cities publish a tourism strategy online > Berlin, Lisbon, London and Vienna had professional tourism concepts even before 2005; for Ljubljana, the first document available is from 2007; for Amsterdam and Helsinki, the year the first document was published is not available > Cities publishing a tourism strategy show stronger growth in the number of arrivals and overnight stays > Publishing the strategy is essential for successful communication with stakeholders > Developing and communicating a professional strategy is an area with a large upside potential for most cities in the study

Cities publishing a tourism strategy2) Cities not publishing a tourism strategy

4.2 1.9

OVERNIGHT STAYS Cities publishing a tourism strategy2) Cities not publishing a tourism strategy

4.0

1.7

1) Luxembourg 2005-2009, Athens 2005-2007, Rome arrivals 2005-2009, Istanbul overnight stays 2005-2009 2) Amsterdam, Berlin, Helsinki, Lisbon, Ljubljana, London, Vienna Source: TourMIS, Roland Berger research

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34

Conclusions (1/3) – Capital city tourism is a key growth driver

> Capital city tourism significantly outperforms GDP development both in times of crisis and recovery > There is a negative correlation between bed capacity growth over the last five years and RevPARs, except in Amsterdam and Stockholm > There is a clear correlation between the number of congresses hosted by a city and the number of overnight stays

> 60 flight connections appears to be the minimum required to attract a significant number of congresses > A surprising number of capital cities do not publish a tourism master plan – only 7 out of the 24 focus cities do publish such a plan > Cities with a published tourism master plan have growth rates in arrivals and overnight stays of around twice as much compared to those not publishing a plan > Capital city tourism is a key driver of growth and should be exploited accordingly

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35

Conclusions (2/3) – Growth needs to be managed well in order to be sustainable > In general, cities should publish better data – professional, focused and up-to-date statistics are not universally available > Some cities that have a large number of overnight stays compared to the number of inhabitants need to manage potential friction between local residents and visitors – marketing tourism within the country itself is increasingly important to keep local residents happy and prevent them feeling like they are living in a zoo

> Many cities are trying to encourage repeat visits and attract tourists away from the city's main attractions to other parts of the city > Developing infrastructure is a key element in the strategies of successful cities > Changes in bed capacity are a measure of the success of the city's image and trust by investors – however, excessive growth generally results in low RevPAR for hotel operators and can threaten the survival of their business

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36

Conclusions (3/3) – Coordination and professional management is a key success factor > On average, 29% of overnight stays relate to domestic tourism, 55% to other European visitors and 19% to non-European visitors > The share of non-European guests is a good indicator for the city's global attractiveness and resistance to local/regional crises – diversification of visitors > The organizational structures for managing city tourism vary – Berlin has a highly professional DMO1): a public private partnership with a significant share of funding generated by profit-oriented activities > The main barriers to cities developing a tourism strategy are the uncoordinated involvement of a large number of stakeholders, too little responsibility assigned to the relevant body, excessive political influence and self-satisfaction regarding current performance > Capital city tourism offers a large upside potential in most European countries 1) Destination Marketing Organization 111129_Europ Capital City Tourism_final.pptx

37

It's character that creates impact!