1. Travel and the economy
VisitEngland Visitor Economy Conference 2013
Graham Pickett
Lead Partner
Travel, Hospitality & Leisure
December 2013
1
© 2013 Deloitte LLP. Private and confidential.

2. Important notice
The document is proprietary to Deloitte LLP and should not be discussed, presented, copied, reproduced
or circulated without the express written authority of Deloitte LLP. Where Deloitte is accredited as the
author/source, such authority will not be unreasonably withheld.
Any requests should be forwarded (via email) to:
Graham Pickett
Senior Lead Partner, Travel, Hospitality & Leisure
Deloitte LLP
2 New Street Square
London
EC4A 3BZ
Tel: +44 (0)1293 761232
Email: gcpickett@deloitte.co.uk
2
© 2013 Deloitte LLP. Private and confidential.

3. Agenda
• The role of travel in the global economy
• The UK context
• Consumer economy
• Travel economy
• Infrastructural challenges
• Actions for the travel sector
3
© 2013 Deloitte LLP. Private and confidential.

4. The role of travel in the global economy
A notable global economic power
9% of Global GDP
4
Source: World Travel & Tourism Council, UNWTO
1 out of every 11
jobs
6% of World’s Exports
– ($1.3 trillion)
© 2013 Deloitte LLP. Private and confidential.

5. The role of travel in the global economy
Contribution to global GDP and employment is set to increase
Travel & Tourism - Contribution to Global
GDP
15,000
12%
500
Travel & Tourism- Contribution to Global
Employment
10%
8%
10,000
10%
400
8%
6%
4%
12%
6%
300
4%
2%
2%
200
5,000
0%
-2%
0%
-2%
100
-4%
0
-6%
Total Revenues (USD billion)
Total Contribution to GDP (% Share)
Real Growth, YoY(%)
5
Source: World Travel & Tourism Council, UNWTO
-4%
0
-6%
Total Employment (million)
As % of Global Employment (% Share)
© 2013 Deloitte LLP. Private and confidential.

6. The role of travel in the global economy
Emerging economies fuelling growth
% Change in Outbound International Tourism Expenditure
42%
32%
31%
33%
29%
29%
22%
15% 14% 13% 13%
12%
10%
10%
7%
8%
10%
8% 8% 8% 7%
7%
7% 7%
4%
4%
6%
-1%
5% 7%5%
5%
3% 5% 3% 4% 2%
-2%
8%
1%
-2% -2% -4%
-7%
-11%
-18%
2010/11
6
2011/12
Source: UNWTO Note: % change over same period the year before, local currencies at current prices
© 2013 Deloitte LLP. Private and confidential.

7. The UK context
General economic situation improving, with GDP and employment levels picking up
UK GDP and Employment levels
75.0%
110
72.5%
105
70.0%
100
67.5%
95
2006 Q1
2006 Q4
2007 Q3
2008 Q2
2009 Q1
2009 Q4
2010 Q3
2011 Q2
2012 Q1
2012 Q4
Employment rate
GDP Index (Base period = 2010)
115
65.0%
2013 Q3
UK Gross domestic product index (Seasonally adjusted)
UK Employment rate (Aged 16-64%, Seasonally Adjusted)
7
Source: ONS
© 2013 Deloitte LLP. Private and confidential.

8. -4%
8
Source: ONS
Average earnings including bonuses (%)
Jul-13
May-13
Mar-13
Jan-13
Nov-12
Sep-12
Jul-12
May-12
Mar-12
Jan-12
Nov-11
Sep-11
Jul-11
May-11
Mar-11
Jan-11
Nov-10
Sep-10
Jul-10
May-10
Mar-10
Jan-10
Nov-09
Sep-09
Jul-09
May-09
Mar-09
Jan-09
Nov-08
Sep-08
Jul-08
May-08
Mar-08
Jan-08
Nov-07
Sep-07
Jul-07
May-07
Mar-07
Jan-07
Nov-06
Sep-06
Jul-06
May-06
Mar-06
Jan-06
The consumer economy
Lack of growth in real incomes remains a key concern
Average earnings growth and inflation in UK
8%
6%
4%
2%
0%
-2%
UK annual inflation, CPI (%)
© 2013 Deloitte LLP. Private and confidential.

9. UK consumers’ personal debt
Relying on UK consumers to stimulate further growth is risky
GBP 54,178
Average household debt
GBP £158.7 billion
Q3 2013
GBP 1.428 trillion
GBP 163 million
Daily interest paid
Outstanding personal debt
Every 5 mins 3 sec
Outstanding unsecured
lending in UK
One declared insolvent
or bankrupt
Total household debt projected to reach GBP 1.931 trillion in Q1 2018
9
Source: The Money Charity
© 2013 Deloitte LLP. Private and confidential.

10. Business confidence in the UK
CFO confidence at its highest for nearly three years
Net % of CFOs who are more optimistic about the financial prospects for their
company
60%
40%
20%
0%
-20%
-40%
-60%
-80%
07 Q3
10
08 Q3
Source: Deloitte CFO Survey Q3 2013
09 Q3
10 Q3
11 Q3
12 Q3
13 Q3
© 2013 Deloitte LLP. Private and confidential.

11. Eurozone indebtedness
Germany continues to pay for the rest of the Eurozone, as Eurosystem imbalances remains wide
Net Balance of interbank payments with the Eurosystem/Target (EUR billions)
1,000
800
600
400
200
0
-200
-400
-600
Germany
11
Ireland
Greece
Source: Institute of Empirical Economic Research - Osnabrück University
Spain
France
Italy
Portugal
© 2013 Deloitte LLP. Private and confidential.

12. The English Consumer
Improved confidence and labour market driving discretionary spending in England
Net spending up
Net spending down
Restaurants and hotels
(eating out and short breaks)
Utility bills
Q3 2013: -12%
Q3 2011: -25%
+13 points
+11 points
Going out
(cinema, theatre etc.)
Q3 2013:-19%
Q3 2011: -28%
12
Source: The Deloitte Consumer Tracker
-8 points
Transport
Holidays
(long breaks)
Q3 2013: -3%
Q3 2011: -14%
Q3 2013: 31%
Q3 2011: 39%
+9 points
Q3 2013: 15%
Q3 2011: 22%
-7 points
Grocery shopping
Q3 2013: 21%
Q3 2011: 22%
-1 points
© 2013 Deloitte LLP. Private and confidential.

13. International travel to the UK
Emerging markets are growing but US and Europe still lead on inbound visitors
3.8
Top 20 Markets by Volume (in million)
3.0
2.8
2.5
1.7
1.7
1.5
1.2
1.1
1.0
0.8
0.8
0.8
0.7
0.6
0.3
0.3
0.3
0.3
0.3
0.3
0.3
0.3
Top 20 Markets by Value (in $bn)
2.4
1.5
1.2
13
1.0
Source: VisitBritain.org
0.8
0.8
0.8
0.6
0.6
0.5
0.5
0.4
0.4
0.3
0.3
0.3
0.3
© 2013 Deloitte LLP. Private and confidential.

14. International growth in outbound travel
UK will compete with other countries to get their share of the growth
Average annual growth forecasts for outbound travel by region,
2010-2015 (%)
World
4.40%
Americas
4.60%
North America
4.08%
Central & South America
6.82%
Europe
2.68%
EU
1.92%
non-EU
5.38%
Asia & the Pacific
7.50%
South East
8.75%
South
9.18%
Africa
4.40%
Mid East
3.25%
0%
14
Source: Tourism Economics
2%
4%
6%
8%
10%
© 2013 Deloitte LLP. Private and confidential.

15. Infrastructure challenges
Heathrow’s capacity constraining ambitions to be an international travel hub
Flight capacity & European Players
1,000
100%
99%
800
80%
71%
66%
Flights (‘000s)
62%
600
54%
60%
400
40%
200
20%
0
0%
Heathrow
Paris
Flight capacity (in '000s)
15
Frankfurt
Flights handled in 2012 (in '000s)
Source: Heathrow Airport Limited (“One hub or None”, November 2012)
Amsterdam
Madrid
Percentage Full (%)
© 2013 Deloitte LLP. Private and confidential.

16. Infrastructure challenges
Rail and road travel infrastructure also needs strengthening
Roads
Rail Network Length and Passenger Usage since
1960
Traffic Growth Vs. Government Investment
in Major Road Projects since 1960
40
15,000
30
10,000
20
5,000
10
0
0
Length of National Rail route (miles)
Passenger Journey (billion miles)
16 Source: Department of transport and HM treasury - UK
400
3
300
2
200
1
100
0
Investment in projects (GBP billion)
50
Billion vehicle miles
20,000
Passenger Journey (billion miles)
Length of National Rail route (miles)
Rails
0
Billion vehicle miles (all vehicles)
Investment in major projects (GBP billion)
© 2013 Deloitte LLP. Private and confidential.

17. Driving economic growth through focused investment
Actions to make UK and England a more attractive tourism destination
Wide focus on
infrastructure
development
Promoting England
beyond London as a
destination
17
Targeted marketing to
attract high-spender
visitors
Pushing the digital
agenda across the travel
sector
© 2013 Deloitte LLP. Private and confidential.

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© 2013 Deloitte LLP. Private and confidential.