Why is tourism so important to cities now?

An interview with Tim Kitchin, CEO of Euromonitor International

What has happened over the past few years for there to have been such a rise in the importance of tourism to cities?

Our research into Cities for Success illustrates that city tourism has benefited from global urbanisation. Already 53% of the world’s population is urbanised and it is expected to reach 67% by 2050. Connectivity is critical for these city economies to grow and tourism to flourish, and so governments continue to invest heavily in infrastructure.

At Euromonitor International, the top 100 cities for international tourism outperform overall tourism, growing over 5% growth. The sheer volume of arrivals to cities is impressive with Asian powerhouses like Hong Kong and Singapore leading the pack, with over 20 million international visitors each. Over half of the top 20 city destinations are in Asia, demonstrating the shift of global economic power eastwards. Asian cities benefit from the Chinese outbound traveller, as China millions of Chinese enter the middle class and cross the income threshold, boosting propensity to travel.

What would you say are some of the more successful cities today?

There are a multitude of factors that make a city successful so we’ve developed a broad framework for success. There are four key pillars — economy, business, innovation and people, where city governments aim to strike the right balance between the demands of tourists and residents.

Connectivity for a city is absolutely critical. Dubai and Istanbul are highly ambitious with their plans to more than double capacity within the next few years, investing billions of dollars in new airport projects, compared to London that struggles with its capacity problem.

London, on the other hand, has proved the naysayers wrong, riding on the success of the 2012 Olympics, proving that mega events when integrated into a long-term tourism growth strategy can work in even the most iconic and mature destinations.

Amsterdam stands out for its collaborative approach to working with the sharing economy brands, and was recently hailed Europe’s top sharing city in 2015. In the age of the smartphone, international tourists expect a choice of lodging formats and the flexibility to book on multiple platforms. Cities that integrate new and old business models are more likely to appeal to Generation Y and non-traditional families.

What are they doing right?

When you look at the city economies that will join the ranks of the world’s leading economies, the majority of them are from Asia, especially China.

By 2030, Guangzhou’s economy will be greater than the Netherlands and the city is expected to quadruple its GDP to US$1.2 trillion. Guangzhou benefits from its geographic location, strong transport links being China Southern’s hub, heavy investment in infrastructure and offering 72 hour visa-free transit to enable greater freedom to travel as also offered in Beijing, Shanghai and Chengdu.

Hong Kong and Chicago are recognised for their world-class multi-modal transport systems and many follow their example to find alternatives to cars. Urban transport has seen much disruption from new ride share and taxi apps that have caused much controversy. Chicago announced the go-ahead for a mobile app to compete with Uber and Lyft, taking the ‘if you can’t beat them, join them’ approach.

Creating a vibrant tech sector was identified by Euromonitor as a critical factor for innovation so it’s not surprising that the home of Silicon Valley — San Francisco — has the highest smartphone penetration, followed by Dubai, Seoul and New York. Going forward, the ubiquitous smartphone, big data and the Internet of Things will help cities gain efficiencies and achieve greater sustainability.

New York and Tokyo were the world’s only mega cities in 1950 and their economic prowess is expected to endure, however, Tokyo will lose its crown as the most populous city to Jakarta by 2030. The challenge for Jakarta is that average household income will remain low and distribution of wealth constrained.

What are some of the biggest challenges that this urban growth is uncovering?

There appears to be an irreversible shift to urban living, which brings opportunities and many challenges. One of the most severe threats is the scarcity of resources and water stress. The world’s urban population is expected to grow from 3.8 billion to 6.2 billion by 2050, adding an extra 2.5 billion new urban consumers. The flipside is that after 2021, the rural population will enter a perpetual decline which is a major concern. The UN reports that already cities generate 70% of the world’s greenhouse gases are generated by cities. Ensuring that economic and demographic growth occurs in a sustainable way is a major concern.

Hear Euromonitor International’s CEO Tim Kitchin speak at the WTTC Global Summit in Madrid, 16th April 2015, 10.30 am.

You can watch the livestream at www.wttc.org/lievstream

Tim Kitchin is Chief Executive at Euromonitor International. Tim has 20 years of international experience at Euromonitor, joining the company as an analyst in 1993, after graduating from Leeds University with a BA Hons in Geography. He quickly transitioned through the business, playing an integral role in the creation and development of Euromonitor’s flagship market research database, Passport.

Established in 1972, Euromonitor International is the world leader in strategy research for consumer markets with more than 1,000 employees in 12 offices worldwide. Euromonitor International was recently recognised by the prestigious PwC/HSBC UK Private Business of the Year Award and received the Queen’s Award for Enterprise in 2014. As an independent company, Euromonitor offers unmatched detail and unbiased content for every region, country, category and channel. Euromonitor has the world’s most comprehensive research on the travel and tourism industry, monitoring and analysing industry trends in travel and tourism globally.

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