changes in leisure time the impact on tourism

Changes in Leisure Time:The Impact on Tourism

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Copyright © 1999 World Tourism Organization

Changes in Leisure Time:The Impact of Tourism

ISBN: 92-844-0316-2

Published by the World Tourism Organization

All rights reserved. No part of this book may be reproduced or transmitted in any form or byany means, electronic or mechanical, including photocopying, recording or by any informationstorage and retrieval system without permission from the World Tourism Organization.

The designations employed and the presentation of material in this publication do not imply theexpression of any opinions whatsoever on the part of the Secretariat of the World TourismOrganization concerning the legal status of any country, territory, city or area or of itsauthorities or concerning the delimitation of its frontiers or boundaries.

Printed by the World Tourism OrganizationMadrid, Spain

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ACKNOWLEDGEMENTS

The World Tourism Organization Business Council would like to thank Horwath UK,consultants to the Tourism, Hotel and Leisure Industries, for their thorough preparation of thisreport on Changes in Leisure Time and its Impact on Tourism, particularly Colin G. Clark forhis dedication in the coordination of the study.

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FOREWORD

Today’s use of leisure time and the trends foreseen for the future are very different from thepatterns established in the 1960s – when economic miracles in many countries triggered thebeginning of the modern era of tourism. The future development of tourism will depend onhow the industry manages to compete with increasingly attractive options for spending leisuretime.

The WTO Business Council’s study Changes in Leisure Time: The Impact on Tourism givesan overview on leisure time trends relevant to tourism in 18 major tourism generatingcountries.

Initial findings of the study were presented and discussed at three seminars on the evolution ofleisure time held during 1998 and 1999 in Washington D.C., London and Madrid. In addition,the study was presented at meetings of the WTO Regional Commission for Africa in Mauritius,at the International Conference on European Tourism and Leisure Research in Austria, at theEast Mediterranean International Travel and Tourism Fair in Turkey and at the University ofWestminster in the United Kingdom. These meetings and seminars constituted a forum fordebate and were used to expand the final report.

The WTO Business Council intends this book to be a reference for the many people involved inthe tourism industry to help them find solutions for success in an ever more competitive world.

Martin Brackenbury José Luis ZoredaChairman Chief Executive OfficerWTO Business Council WTO Business Council

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TABLE OF CONTENTSSECTION Page

1 INTRODUCTION, CONCLUSIONS AND RECOMMENDATIONS1.1 Background 31.2 Scope and Objectives 31.3 Method of Approach 41.4 Conclusions 51.5 Recommendations for Governments 71.6 Recommendations for the Tourism Industry 91.7 The Role of WTO 12

2 COUNTRY SUMMARIES BY REGION2.1 Americas 152.2 Asia Pacific 162.3 Europe, Africa and the Middle East 19

3 AMERICAS REGION3.1 Brazil 253.2 Canada 293.3 United States of America 33

4 ASIA PACIFIC REGION4.1 Australia 414.2 China 454.3 Japan 494.4 Korean Republic 564.5 Malaysia 604.6 Singapore 64

5 EUROPE, AFRICA AND THE MIDDLE EAST5.1 Austria 715.2 France 755.3 Germany 805.4 Italy 855.5 Netherlands 905.6 Sweden 935.7 Switzerland 985.8 United Kingdom 1025.9 South Africa 109

6 OVERVIEW OF TRENDS AND IMPLICATIONS FOR TOURISM6.1 Population, Demography and Incomes 1156.2 Working Time and Leisure Background 1186.3 Overview of Regulation of Working Time and Holidays 1196.4 Overview of Findings on Leisure Time 1226.5 Leisure Time and Tourism by Region 1236.6 Summary Findings on Leisure Time and Tourism 137

APPENDIX

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Changes in Leisure Time: The Impact on Tourism 1

SECTION 1

INTRODUCTION, CONCLUSIONS AND RECOMMENDATIONS

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WTO Business Council2

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SECTION 1 INTRODUCTION, CONCLUSIONS AND RECOMMENDATIONS

1.1 BACKGROUND

Tourism is the world’s largest industry and growing significantly. International tourismarrivals worldwide grew by 36% to 625 million, and international tourism receipts grewby 65% to US$445 billion, from 1990 to 1998. Europe is the major generator of outboundinternational tourism, accounting for 54% of global expenditure in 1996. The Americasgenerated 22% of expenditure, Asia Pacific 21%, and Africa and the Middle East 3%.Domestic tourism accounts for many more trips than international tourism, but overallwith a significantly lower expenditure per trip. Detailed tourism statistics are publishedby WTO.

Until quite recently it was widely assumed, particularly in and concerning the richercountries, that working hours were steadily reducing, the amount of leisure timeincreasing and that these trends would continue. Many people looked forward to a goldenage of leisure. In 1996 the Affiliate Members Committee of WTO agreed that the majorchanges which have been impacting on the world economy in recent years have made thesituation much more complex and that a study of current trends in leisure time and theirimplications for tourism should be undertaken.

Governments, industries and employees are facing the consequences of globalisation andliberalisation of the world economy and the resulting fierce competitive pressures.Attention has become focused on efforts to make industries more competitive, raiseproductivity and counter unemployment. As a result there is now less concern for betterworking conditions. Those working conditions which specifically affect leisure time -shorter working days, shorter working weeks, longer holidays with pay and reducing theage of retirement - have taken a back seat. At the same time demographic shifts areoccurring and also changes in the structure of family life and in the pattern ofemployment. All these factors bear upon the level of holiday taking.

In addition, there is a general absence of leisure time policies at government level.Tourism is now promoted by governments more for its economic benefits than for thehealth, social benefits and improved quality of life, which in the past justified increasingholiday entitlements in many countries.

1.2 SCOPE AND OBJECTIVES

This study examines the prospects for leisure time in a sample of 18 important tourismgenerating countries, to establish what changes in the pattern of leisure time are takingplace, how these are reshaping holiday taking, and how governments and the tourismindustry should respond. The countries are listed below by region.

Americas: Brazil, Canada and USA.

Asia Pacific: Australia, China, Japan, Korean Republic, Malaysia and Singapore.

Europe, Africa and the Middle East: Austria, France, Germany, Italy, Netherlands,Sweden, Switzerland, UK and South Africa.

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14 of these countries are currently leading generators of outbound tourism. To ensure abroadly based study, avoid over concentration on Europe and North America, and look togrowth markets of the future, Australia, China, South Africa and Malaysia are alsoincluded. The 18 selected countries generated 73% of international tourism expenditure,and 61% of international tourism arrivals in 1996.

When comparing the country positions in terms of trips and expenditure, Japan’srelatively low ranking in terms of number of trips and third placing in terms ofexpenditure highlights its high average international tourist spend. The opposite appliesto Malaysia, ranked fourth in terms of trips and the lowest in terms of expenditure whencompared to the other selected countries.

Leisure time is shaped by hours of work, public holidays, paid leave entitlements andretirement arrangements, all of which vary widely between countries. Each has its ownnational values and traditions in terms of the importance attached to leisure and theinstitutional arrangements that shape it.

This study focuses on leisure time in relation to holiday taking, but there are manycompeting claims for leisure time and discretionary income in the vicinity of the home.As discretionary leisure time increases it at first frees people to take more holiday awayfrom home. However, as leisure time increases further the proportion taken away fromhome falls.

Some of the countries included in the study have long standing traditions of leisure timeand holiday taking, often buttressed by law and collective agreements between employersand employees. In other countries leisure patterns depend more upon convention andcustomary provisions in employment contracts. In these countries changes in the generaleconomic climate can affect leisure provision quite quickly. There is a third group ofcountries, often with strong traditions of public holidays, in which the idea of regularholidays of several days, perhaps used to travel abroad, is still quite new and less wellestablished in the social and economic fabric.

This study examines leisure time trends in each of the countries and changes in theinternational economy, which are creating new pressures on leisure time.

1.3 METHOD OF APPROACH

The study has been carried out by desk research, correspondence and discussion with thekey interests in each country, including the governments departments and agenciesresponsible for tourism and related matters, national travel industry bodies andrepresentative bodies of employers and employees. We have consulted internationalorganisations with an interest in leisure and tourism, including OECD, ILO, the EuropeanCommission and Eurostat. Offices of Horwath International in the relevant countrieshave also assisted with our research. The study has also benefited from a series ofseminars and meetings, organised by WTO, at which preliminary conclusions werediscussed and valuable input received.

The information gathered enabled us to identify the institutional arrangements whichshape leisure time in each country, recent trends and the factors which are nowinfluencing how leisure time will develop in the future and how consumer behaviour andtourism are likely to be affected. We have analysed this information and set out our

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conclusions and recommendations for policy and action by governments, the tourismindustry and WTO.

1.4 CONCLUSIONS

1.4.1 Importance of Tourism

Tourism is among the fastest growing sectors of the world economy. Governmentsthroughout the world support the industry and compete for a share of the revenues andemployment it can bring. International tourism is forecast by WTO to grow from 1995 to2020 at an average annual rate of 4.3% for tourist arrivals and 6.7% for touristexpenditure.

Much of the growth will be from the countries included in this study and will therefore beinfluenced by the trends we have identified in working time and leisure in each country.These trends reflect world economic circumstances and, in particular, aspects ofglobalisation, liberalisation and technological change which are impacting on nationaleconomies. Fierce international competition leads governments to focus on policies tosharpen economic performance.

1.4.2 Employment Security and Productivity

Businesses seek to raise productivity and trade unions are more concerned to stabiliseemployment and maintain incomes than to press for improvements in conditions ofemployment. Commercial pressures make for greater flexibility in the terms on whichemployment is available. For many employees this means less security.

A 1997 OECD report on job insecurity in member countries concluded that there has beena widespread and, in some countries, very sharp increase in individuals perceptions of jobinsecurity between the 1980s and the 1990s. In these circumstances many employees aremore concerned about security of employment than long holidays or shorter workingweeks. They are also likely to consider long term financial provision more carefully than inthe past and to plan on the basis that, looking to the future, personal resources forretirement will become increasingly important as national social security provision isreduced.

1.4.3 Employment Flexibility

Within the broader trend towards employment flexibility, increasing the flexibility ofworking hours can provide benefits to employees in terms of greater freedom to choosewhen to go on holiday. This is important for tourism. However if within more flexiblearrangements, employees are to take holidays they still need to be able to plan their leisuretime, to know how much time they will have and when.

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1.4.4 Paid Leave and Leisure Time

Employers in highly competitive markets work to control employee benefit costs, ofwhich paid holiday and pensions are among the most expensive. Hence the tendency tominimise the number of permanent employees and the consequent time pressures uponthose employees, especially more senior staff, who in many cases do not qualify forovertime payments and may fall outside controls on working hours.

In this employment climate it is improbable that paid leave entitlements will increasesubstantially, at least in the short to medium term. For many of those in employmentleisure time will be increasingly shaped by the terms of new, more flexible working hoursregimes.

However, paid leave in countries within the European Union is now under pinned by the1993 Working Time Directive which gives a right to four weeks paid holiday from 1999.This holiday cannot be exchanged for cash. A related development is the move by someEuropean employers towards flexible benefit packages enabling employees to choosebetween more holiday and, for example, additional pension contributions. Interactionbetween these developments will be important, especially as in several countries pressureof work is leading some employees to take less than their full holiday entitlement.

1.4.5 Retirement

Almost all the countries we have considered are reviewing social security provision toreduce or contain the cost of retirement pensions and encourage more private provision. Insome cases the value of pensions is being reduced over a transitional period and theretirement age raised. In Europe, the last few years have seen policies of encouragingearly retirement, in order to create jobs for the young, succeeded in some cases by policiesto defer retirement in order to reduce the burden on public expenditure.

The leisure time of the retired will be modified by changes in retirement age and pensions,but many will continue to retire younger and fitter than previous generations and withmore leisure interests.

This market will continue to grow. The proportion of the population aged 60 and overwill rise significantly in all countries included in the study. Between 1996 and 2010 theincrease will be over 85 million (a 27% increase).

1.4.6 The Young

The leisure of the young is constrained by limited incomes rather than time but many takethe opportunity to travel before embarking on their careers and the changing pattern ofemployment, with less emphasis on lifetime careers, encourages some to take furtherbreaks between periods of work. With employment increasingly offered on the basis oflimited time contracts, this trend is likely to continue.

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1.4.7 Consumer Response

The findings of this study, particularly the views of the travel industry, show howconsumer behaviour is changing in response to these economic and social developments.Despite the squeeze on leisure time, the market response is not a weakened but a changingpattern of tourism demand towards shorter, more frequent and more intensive breaks.Increased work pressure may well be making holidays even more vital. So there are manyopportunities for the industry. Higher spend, shorter stay visitors can mean a better returnon investment.

However, the industry should recognise two important factors:

• the dichotomy between the money rich / time poor and time rich / money poor sectorsof the population;

• traditional tourism products are increasingly competing for time and/or money withother tourism related products (such as second homes, time-share and cruises) andwith leisure activities and other consumer expenditure in the vicinity of consumers’homes.

Both of these factors illustrate the increasing segmentation of the market and thecontinuing demand shift from standardised mass tourism products towards products withlocal identity and authenticity, designed to meet more individual needs.

1.5 RECOMMENDATIONS FOR GOVERNMENTS

1.5.1 Recognition of the Tourism Industry

For some governments the most important concern may be the overall distribution of workand leisure. Governments wishing to reduce the involuntary leisure resulting fromunemployment, and which recognise tourism as a powerful job creator, should developpolicies for their countries both as tourism generators and tourism destinations.Traditionally governments have been much more responsive to inbound than to outboundtourism issues but policy will be more effective if the links between the two are recognised

1.5.2 Areas for Action

A flourishing tourism sector requires:

• economic policies which encourage the natural acceleration in growth of the servicesector, including the leisure industries, as consumer incomes rise, thus improving thequality of life and stimulating leisure related demand both by residents and tourists;

• development of the synergy between outbound, inbound and domestic tourism markets.

Transport and accommodation facilities developed or facilitated by government to servethese markets also serve broader economic objectives by improving communications,access and ease of movement to and within the country;

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• that the income, employment and regional development benefits which tourism canprovide are not limited by a taxation burden which inhibits growth or weakensinternational competitiveness;

• that tourism development is effectively co-ordinated across government departmentsand particularly with environmental and transport policy;

• that transport policies facilitate market developments. A particular instance, highlighted

in this study, is the trend towards shorter but more frequent holidays, which makes thequality of air transport services, including airport capacity and related ground facilities,especially important;

• that more flexible working hours regimes take account of the family and social

responsibilities of employees and provide for a balance between work and other aspectsof life.

1.5.3 Lifestyle Trends

The large increase in the number of women in the work force in many countries makesflexible working regimes especially important. The rising proportion of dual incomehouseholds greatly reduces family leisure time and puts pressure on family life, includingdifficulty in synchronising times when both parents and children can take holidaystogether. The increasing number of families affected by divorce further complicatesorganising family holiday groups.

Providing balance between work and other aspects of life - a family friendly working hoursregime - is a humane issue and a strategic one in relation to long term social and economichealth. In certain countries, for example the USA, Japan and the UK, the work pressure onsome employees is particularly intense and we have identified a level of public concern toachieve a more balanced approach to work and leisure.

In the past it was often predicted that economic advance, rising incomes and the progressof technology would improve the quality of life. Widespread concern about workpressures suggests that, for many employees caught up in situations where leisure time isconstantly squeezed, the quality of life may be falling.

1.5.4 Working Hours and Competitiveness

In a number of countries unemployment is made worse by the high level of wage relatedcosts associated with taking on employees. This encourages employers to structure jobs tominimise head count and thus the burden of associated costs, making it difficult for manyof the employed to achieve the balance they would like between work and leisure andmaking it difficult for others to find employment.

Governments may wish to review the relationship between working hours andcompetitiveness. Long hours are not necessarily effective hours. The USA and Japan, thetwo wealthiest countries, have respectively given the world two new words. FromAmerica comes “downshifter” (one who makes a deliberate decision to withdraw fromfinancially rewarding but stressful work so as to achieve a more meaningful and happylife). From Japan “karoshi” (death caused by overwork or job related exhaustion). Thesetwo words indicate the price in terms of creativity and health which is being paid for the

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working hours regimes now established in the two largest economies. They alsodemonstrate the importance of applying the fruits of increasing productivity to improvingthe quality of life generally and broadening the opportunity for individuals to achieve abetter balance between work and leisure.

Increased leisure, if it is voluntary, is one of the most prized benefits of economic growthand one person’s leisure can provide another person’s employment.

1.6 RECOMMENDATIONS FOR THE TOURISM INDUSTRY

Tourism services should be developed taking into account that:

1.6.1 Working Time and Leisure

Increasingly flexible working hours, including in many countries the substantial rise inthose working at weekends, is changing the rhythm of leisure time. The work and leisuretime of individuals, through the week and through the year, is increasingly variable.Working hours are being annualised to fit work peaks and troughs more closely. Morepeople are employed on fixed term contracts and simply take time off betweencommitments. One effect of these developments is to reduce the traditional weekend andseasonal peaks in the leisure market. Other considerations include:

• more flexible market driven working patterns, and the growth of self employment, willlead to an increase in working hours for many;

• those working under more flexible employment regimes may be less able to plan theirholidays far in advance, less confident in budgeting for them and book on shorter leadtimes;

• more flexible work regimes, the continuing decline of "factory close down" traditionsand the growth of “winter sun” travel between the hemispheres will lead to holidaysbeing spread more evenly through the year;

• increases in the number of public holidays or in paid annual leave are unlikely over the

next few years in any of the countries we have reviewed; • main holidays will tend to decrease in length, with growth most likely in additional

shorter holidays, often, particularly in the case of North America and Asia, taking theform of extended weekends;

• in some countries where it has been the tradition there are moves away from Saturday

school, which will ease family weekend leisure time, but there may be compensatingreductions in the length of school holidays;

• there may be more staggering of school holidays to avoid congestion; • in the USA there are some experiments in making school holidays more education

driven, with shorter, more frequent breaks. Similar possibilities are being considered inthe UK. This could have an important impact on the pattern of holiday taking;

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• in countries where paid holiday entitlements are established by law there are noindications that reductions are being considered;

• • in countries where there is no statutory right to paid holidays, or where the holiday

tradition is not strong economic difficulties, rising unemployment and workplacepressure may erode holiday taking;

• • the introduction by employers of flexible employment packages can benefit tourism to

the extent that employees choose more holidays in preference to alternative benefits.

1.6.2 Market Factors

• whilst the retired will continue to be a strong and growing market, many countries arereducing social security retirement benefits, raising the retirement age and encouragingmore self funding of retirement income. So this important market is likely to becomeeven more cost and value conscious;

• the retired, free of the constraints of summer and other traditional holiday seasons, will

contribute to the seasonal spread of holiday taking and present many marketingopportunities;

• the pressures of working life will continue to stimulate the need to "get away from it

all", often for a short break; • the shortage of leisure time available to the employed in a number of countries,

particularly the USA and the Asian countries, will stimulate demand for time efficientshort breaks at easily and quickly accessible destinations;

• young people and the retired will be the groups with most leisure time available for

travel. Both markets are strongly segmented and that tendency will grow as consumersincreasingly link holiday activities with personal interests;

• working couples may find difficulty in synchronising holiday time between themselves

and family circumstances, arising from divorce or from responsibility for dependentrelatives, may be a further complication;

• in some countries liberalisation of the economy will continue to lead to greater income

polarisation. This will add to the number of comparatively wealthy seekers of new,high quality travel opportunities.

1.6.3 Product Implications

• there are many competing claims on consumers' limited leisure time. Holidays need asubstantial commitment of time so the squeeze on time strengthens competition from inhome and near to home attractions. The industry should analyse the benefits, in termsof satisfaction and personal development, which time pressed consumers really wantfrom holidays and develop precisely tailored, flexible products;

• whilst the range of leisure opportunities promoted to consumers continues to grow thereis also a continuum of leisure interests which presents growth opportunities for tourism.Fitness enthusiasts are prime prospects for activity holidays. Cultural interests

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developed at home stimulate the market for an ever widening range of cultural tourismproducts;

• the time pressed will want to achieve maximum value from their tourism purchases. Bydeveloping relationship marketing the industry can identify particular consumer needsand offer products which consumers recognise as making an essential contribution tolifestyle, for which time must be found.

• reinforcing and strengthening the motivation for travel and tourism is increasinglyimportant as leisure industry investors compete for consumers time with near to homeattractions, including theme parks and alternatives to international travel, such as CenterParcs in Europe and Disney's Animal Kingdom in Florida.

Segmenting the tourism market to reflect time pressures we can identify -

• the time poor but money rich, interested in a wide range of high style, high fashion shortbreaks - city culture, total relaxation, the exotic. Their time is more valuable to themthan their money. They expect excellent products that can be tailored to their tightschedules.

• the money and time rich, these include the affluent retired, free to travel throughout theyear. Many will be sophisticated and demanding travellers, open to enjoying severalwidely different holidays each year, including luxury cruising and long haul travel butwith many home - and perhaps second home - based interests competing for their time.

• the money and time poor, interested in a wide range of affordable holidays, often in thedomestic market. Work pressures will incline them to get away for short breaks whenthey can, often at short notice.

• the money poor and time rich, often retired, interested in extended but inexpensive trips,including winter sun breaks, preferably with plenty of associated activities and,particularly for the young, backpacking.

Cost conscious consumers will look for the cost saving benefits of the traditional packageholiday. Those who are more pressed for time than for money will look to packages for thetime savings offered. The time poor and money rich, in particular, will expect highlyefficient services for selecting and purchasing holidays on short lead times, using the latestinformation technology. Their insistence on hassle free, efficient journeys will provideopportunities for nearby destinations to exploit same country, same region or same timezone advantages. The time pressed do not want avoidable jet lag, slow ground services oraccommodation with poor communication links. Many are never truly off duty; even onholiday they must keep in touch with work.There are opportunities for domestic products if consumers feel they get better value fromtheir limited time by reducing the proportion spent on travel.

Success will go to those who study changing consumer needs most closely and whoseproducts serve them best.

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These changing needs and, in particular, the increasing pressure on leisure time, were wellillustrated in a presentation on the position in the United Kingdom, “Tourism and Valuefor Time” by Paul Edwards of the Henley Centre to the WTO World Travel Marketseminar in London in November 1998. A summary of the presentation is included asAppendix to this Report.

1.7 THE ROLE OF WTO

The future levels and patterns of holiday taking will depend upon economic growth and theextent to which people share in this in terms of additional leisure time, as well as additionalincome.

In view of the pressures on leisure time and the economic opportunities which tourismpresents, WTO decided to lead a major debate on the importance of leisure and leisuretime. This debate highlighted growing concerns in many countries about the time pressureson many of the employed whilst others are unemployed or underemployed.

It is widely recognised that most new employment will be generated by the serviceindustries. However, the challenge of creating more jobs which leisure industries cangenerate, particularly tourism, is to ensure that leisure time is not compromisedexcessively. In an increasingly flexible employment market some individuals will wish towork relatively long hours to maximize income, others will prefer to work shorter hours tohave more time for other interests, including leisure activities. This choice should be avoluntary one, which individuals in all countries should be free to make.

The examination of the current situation and trends of leisure time has been a first steptowards monitoring leisure time developments relevant to tourism. A central source ofinformation has been declared valuable for governments and the industry. This initiative istimely, in that economic circumstances now, are so different from those of the 1960s -when economic miracles in many countries established the conditions for leisure to emergeand led to the phenomenon of tourism.

WTO’s aim for the future is to encourage governments to monitor the increasinglyimportant leisure sector more closely at national level, particularly trends in holidayentitlements, the amount of holiday actually taken and the proportion of that which is spentaway from home.D

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SECTION 2

COUNTRY SUMMARIES BY REGION

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SECTION 2 COUNTRY SUMMARIES BY REGION

2.1 AMERICAS

2.1.1 Brazil

• Brazil generated US$6.6 billion of outbound international tourism expenditure in 1997,and was ranked 15th in the world with 1.7% of global expenditure;

• the population of Brazil is forecast to rise by 29 million to 190 million between 1996and 2010; the proportion of the population aged 60 or over will increase by 47% to total17 million;

• leisure provision is entrenched by law and both paid holiday entitlement and publicholidays are generous;

• continuing economic reforms are likely to increase unemployment and reduce jobsecurity.

• In the short term, the 1999 devaluation and subsequent floating of the currency willinhibit outbound but may strengthen domestic tourism;

• in the longer term economic prospects and holiday entitlements are favourable.

2.1.2 Canada

• Canada generated US$11.3 billion of outbound international tourism expenditure in1997, and was ranked 7th in the world with 3.0% of global expenditure;

• the population of Canada is forecast to rise by 3 million to 33 million between 1996 and2010; the proportion of the population aged 60 or over will increase by 37% to total 7million

• paid annual leave and public holidays, which are entrenched by law, are more generousthan in the USA.

Market trends are characterised by:

• reducing length of main holidays; • growth in additional breaks, especially extended weekends; • growth in short haul rather than long haul or domestic travel; • growth in tailored and independently organised holidays; • a general trend towards activity, cultural and special interest holidays; • a growing retired population, interested in learning and health breaks and who expect

to remain active longer than previous generations.

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2.1.3 USA

• USA generated US$51.2 billion of outbound international tourism expenditure in 1997,and was ranked 1st in the world with 13.6% of global expenditure. The USA domestictourism market is also particularly well developed;

• The population of the USA is forecast to rise by 29 million to 294 million between 1996and 2010; the proportion of the population aged 60 or over will increase by 27% to total55 million

• holiday entitlements are likely to remain modest; • continuing growth can be expected in short breaks, especially extended weekends and

trips around public holidays;

• domestic and nearby destinations will benefit from short travel times and theopportunity to offer very time efficient packages to make optimum use of limitedleisure time;

• the growth of two earner households will continue to make holiday timingsynchronisation difficult. For divorced couples, where more than two parents have aninterest in the children, there can be further difficulty.

2.2 ASIA PACIFIC

2.2.1 Australia

• Australia generated US$6.1 billion of outbound international tourism expenditure in1997, and was ranked 19th in the world with 1.6% of global expenditure;

• the population of Australia is forecast to rise by 2 million to 20 million between 1996and 2010; the proportion of the population aged 60 or over will increase by 39% tototal 4 million;

• the Australian economy has been severely affected by the Asian economic crisis; • the decline of outbound tourism from Asia led to reduced capacity on airline routes

serving Australia. This, together with the weakness of the Australian dollar, hasnegatively impacted outbound tourism from Australia;

• a growing trend is the ability for employees to exchange paid overtime for leave,

increasing the opportunity to take long weekend breaks; • the continuing trend in the growth of short break additional holidays is likely to benefit

domestic and easily accessible short haul destinations.

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2.2.2 China

• China generated US$10.2 billion of outbound international tourism expenditure in 1997,and was ranked 10th in the world with 2.7% of global expenditure;

• the population of China is forecast to rise by 134 million to 1,349 million between1996 and 2010; the proportion of the population aged 60 or over will increase by 35%to 161 million;

• China’s outbound tourism is at an early stage of development and the longer termgrowth potential is very great;

• the Chinese enjoy annual leave entitlements of 10 days in line with other countries in

the region; • growth has been strongest in intra regional traffic and this may be stimulated by the

recent devaluations in a number of neighbouring countries; • any weakening of Chinese economic performance arising from the difficulties in the

region is likely to inhibit growth in the short term.

• Weakness in the inbound market arising from economic difficulties in the region andthe consequent availability of capacity may stimulate domestic market growth

2.2.3 Japan

• Japan generated US$33 billion of outbound international tourism expenditure in 1997,and was ranked 3rd in the world with 8.7% of global expenditure;

• the population of Japan is forecast to rise by 1 million to 127 million between 1996 and2010; the proportion of the population aged 60 or over will increase by 43% to total 38million;

• recent economic developments will make the market more cost conscious and subduegrowth;

• no increase in holiday taking among the employed is likely until the economystrengthens. Therefore Japanese executives (“salary men”) will have little opportunityfor long haul leisure travel and their holidays, and those of their families, will continueto focus around weekends and the public holidays;

• the more leisure orientated young (particularly “office ladies”) and the retired, in arapidly ageing society, will present growth opportunities for intra regional and longhaul tourism. A wide range of activity and cultural breaks will be popular, with skiingand theme parks appealing to the young and cruises, golf and health tourism to theretired;

• the 1998 Asian devaluations increased the competitiveness of intra regionaldestinations.

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2.2.4 Korean Republic

• the Korean Republic generated US$6.3 billion of outbound international tourismexpenditure in 1997, and was ranked 18th in the world with 1.7% of global expenditure;

• the population of the Korean Republic is forecast to rise by 4 million to 50 millionbetween 1996 and 2010; the proportion of the population aged 60 or over will increaseby 62% to total 7 million;

• economic stress, and the changes required by IMF assistance, will subdue consumerspending in the short term;

• the prospect of rising unemployment makes it unlikely that employees will increase thevery modest proportion of annual leave which is actually taken;

• the general growth in demand, together with some increase in the proportion of annualpaid holiday actually taken, which was envisaged at the time of our consultation withthe Association of Travel Agents, is now likely to be deferred in the short term;

• the January 1998 discouragement of the promotion of overseas travel, and thecampaign for holidays at home, is further depressing outbound travel and airlinecapacity has been reduced.

2.2.5 Malaysia

• Malaysia generated US$2.5 billion of outbound international tourism expenditure in1997, and was ranked 28th in the world with 0.7% of global expenditure;

• the population of Malaysia is forecast to rise by 5 million to 26 million between 1996and 2010; the proportion of the population aged 60 or over will increase by 62% tototal 2 million;

• the regional economic crisis, and the imposition of currency controls, have had a majoreffect on Malaysian outbound tourism and leisure;

• the government are seeking to increase the domestic tourism market; • recovery of the outbound market is likely to be slow.

2.2.6 Singapore

• Singapore generated US$3.2 billion of outbound international tourism expenditure in1997, and was ranked 25th in the world with 0.9% of global expenditure;

• the population of Singapore is forecast to remain stable at 3 million between 1996 and2010; but the proportion of the population aged 60 or over will increase by 33% to total1 million;

• the economy has been less affected than other economies in the region by financialdifficulties;

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• outbound traffic is heavily intra regional and may be encouraged by the devaluations inneighbouring countries;

• the travel industry has identified the easing of Chinese visa restrictions as a key to

travel growth, particularly for short breaks; • the travel industry anticipates that weekly working hours may increase. It also

recognises that the retirement age is set to rise but believes this, by raising incomes ofolder people above retirement level, may stimulate a higher level of tourism among theelderly.

2.3 EUROPE, AFRICA AND THE MIDDLE EAST

2.3.1 Austria

• Austria generated US$11.0 billion of outbound international tourism expenditure in1997 and was ranked 8th in the world with 2.9% of global expenditure;

• the population of Austria is forecast to remain unchanged at 8 million between 1996and 2010; the proportion of the population aged 60 or over will increase by 19% tototal 2 million;

• working time and paid annual leave are underpinned by the law and by collectiveagreements;

• no major changes are expected but the retirement age is set to rise and the unions areconcerned about the quality of future employment, especially in view of the trendtowards part-time jobs;

• holiday entitlements are generous, but the travel trade is cautious about the level ofholiday spend in the short term and anticipates some decrease in additional holidays.

2.3.2 France

• France generated US$16.6 billion of outbound international tourism expenditure in1997, and was ranked 6th in the world with 4.4% of global expenditure. France alsohas a strong domestic tourism and second home market;

• the population of France is forecast to rise by 2 million to 60 million between 1996 and2010; the proportion of the population aged 60 or over will increase by 15% to 14million;

• • government initiatives have encouraged the reduction of working time through the

sharing of work between the employed and unemployed. The Government has alsosought to increase the numbers of people retiring early;

• a law, adopted in 1998 and to be introduced in 2000, reduces the working week to 35

hours with no reduction in pay. Employers believe that this will have a negative effectupon competitiveness and productivity;

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• the Syndicat National des Agents de Voyages reported that French government policy isto encourage increased leisure time and that outbound tourism is growing.

2.3.3 Germany

• Germany generated US$46.2 billion of outbound international tourism expenditure in1997, and was the world’s second leading generator with 12.2% of global expenditure;

• the population of Germany is forecast to fall by 1 million to 81 million between 1996and 2010; but the proportion of the population aged 60 or over will increase by 18% tototal 20 million;

• no increase in the generous holiday entitlements is expected and the travel tradeenvisages a possible fall in additional holidays, and in willingness to take full holidayentitlements, in the short term;

• the continuing debate on the need to contain the costs of the unfunded pension schememay make the retired more cautious about leisure spending.

2.3.4 Italy

• Italy generated US$16.6 billion of outbound international tourism expenditure in 1997,and was ranked 5th in the world with 4.4% of global expenditure. Italy also has astrong domestic tourism market;

• the population of Italy is forecast to fall by 2 million to 55 million between 1996 and2010; but the proportion aged 60 or over will increase by 14% to total 14 million;

• the travel industry has noted a trend towards shorter but more frequent holidays; • despite adverse changes in retirement age and income, the industry expects some rise in

holiday expenditure, especially in short breaks and extended weekends and beyond2000;

• the Italian State Tourist Board advises that by 2005 there may be some decrease inholiday entitlements and therefore in the number of days holiday taken.

2.3.5 Netherlands

• Netherlands generated US$10.2 billion of outbound international tourism expenditure in1997, and was ranked 9th in the world with 2.7% of global expenditure;

• the population of the Netherlands is forecast to remain stable at 16 million between1996 and 2010; but the proportion of the population aged 60 or over will increase by24% to total 4 million;

• no increase in paid leave entitlement is expected and there is some discussion inHolland about whether the Dutch have too much holiday;

• trade unions want members to have the right to sell back to their employers the "extra"

five days above the legal entitlement which many collective agreements include;

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• the length of main holidays is expected to decrease but the frequency of holidays toincrease;

• long haul travel is expected to rise more than short haul;

• the retirement age is expected to rise.

2.3.6 Sweden

• Sweden generated US$6.6 billion of outbound international tourism expenditure in1997, and was ranked 16th in the world with 1.7% of global expenditure;

• the population of Sweden is forecast to remain stable at 9 million between 1996 and2010; but the proportion of the population aged 60 or over will increase by 15% to total2 million;

• Swedish annual leave provision is good and includes provision to enable employees tocarry forward holiday, in order to take longer periods of leave, and to link publicholidays to weekends and thus have a longer break;

• trade unions are most concerned with the prospects for the quality of future employmentopportunities. Their interest in leisure time is mainly focused on improving flexibleworking hours regimes, so that they meet family and social needs as well as improvingcommercial efficiency;

• there is also interest in developing "free time banks" to enable employees to accumulatefree time when they wish and use it how they wish, even using holiday time to shortenthe working week for a period;

• it is unlikely that there will be any increase in holiday entitlements in the next few

years.

2.3.7 Switzerland

• Switzerland generated US$6.9 billion of outbound international tourism expenditure in1997, and was ranked 13th in the world with 1.8% of global expenditure;

• the population of Switzerland is forecast to remain stable at 7 million between 1996 and2010; but the proportion of the population aged 60 or over will increase by 21% to 2million;

• trade unions have been campaigning for a 10% reduction in working time, but this isopposed by the Confederation of Swiss Employers;

• little change is expected in working time or holiday entitlement; • in the longer term the retirement age may be reduced but there may also be a fall in

retirement income;

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• economic growth has been disappointing and a 1997 poll indicated worries aboutunemployment and pensions. However, expenditure on main and additional holidays isexpected to increase with growth predicted in the long haul and short break markets.

2.3.8 United Kingdom

• UK generated US$27.7 billion of outbound international tourism expenditure in 1997,and was ranked 4th in the world with 7.3% of global expenditure;

• the population of the UK is expected to remain stable at 59 million between 1996 and2010; but the proportion of the population aged 60 or over will increase by 12% to 14million;

• implementation of the European Union Working Time Directive means that workinghours and paid holiday leave have a statutory basis, which may result in slightly moreshort breaks and holidays;

• more flexible working regimes will result in shorter more frequent breaks; • no other significant changes in leisure time are likely;

• the retired will continue to be an important market, with a steadily increasing proportionenjoying supplementary pensions.

2.3.9 South Africa

• South Africa generated US$1.9 billion of outbound international tourism expenditure in1997, and was ranked 35th in the world with 0.5% of global expenditure;

• The population of South Africa is forecast to rise by 8 million to 46 million between1996 and 2010; the proportion of the population aged 60 or over will increase by 36%to 3 million;

• South Africa has been seriously affected by the global financial crisis, which hasresulted in high interest rates, currency devaluation and fears of recession;

• outbound tourism growth is expected to be slow in the short to medium term.

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SECTION 3

AMERICAS REGION

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SECTION 3 AMERICAS REGION

3.1 BRAZIL

3.1.1 Key Facts

1997 2010 ProjectionPopulation millions 169 190% of Population over 60 *7 9Labour Force millions *72 87GDP per head ppp US$ 6,300 n/a

* 1996 ppp = purchasing power parityStatutory Leave *30 daysPublic Holidays 10 daysRetirement Age Men 65 Women 60

* maximum1994 1995 1996 1997

Unemployment % 6 6 5 7

1980 to 1990 1990 to 1996 1997Consumer Prices % Increase pa 371 644 5

1980 1996Service Imports US$ millions 4,871 13,630Travel as % of Total Service Imports 7.5 24.9Travel Imports US$ millions 365 3,394

Working Week 44 hours per weekSources: World Bank, ILO, Embratur

3.1.2 Working and Leisure Time

3.1.2.1 Overview

Working hours are regulated by law and practice. The Federal Constitution and theconsolidation of labour laws of 1943, with subsequent additions, regulate working hours.Collective agreements, which may be applied exclusively or in combination with legalprovisions, also establish working time rules for certain categories of employees.

3.1.2.2 Trends

The Constitution of 1988 maintained the eight hour normal working day but reduced theworking week from 48 to 44 hours. There is a trend to greater flexibility of workinghours as part of a modernisation and simplification of working hours, and reduction ofsocial costs. There is a union view in favour of prohibition of overtime work on thegrounds that it is an obstacle to job creation. However, the experience when Brazilintroduced the eight hour day was that rather than increasing the number of jobs it led to a

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rise in overtime. This tendency is probably due to low salaries and to the high employeerelated costs of hiring new workers.

3.1.2.3 Normal Hours of Work

Law: the Constitution provides for an 8 hour working day and a working week of 44hours.

Practice: Embratur (the Brazilian tourism agency) advises that, over the period 1994 to1996, the average working week was six days. In August 1998, the Governmentintroduced extensive labour law reform to try to stem rising unemployment. The measuresintroduced greater flexibility into work contracts and encourage more part-timeemployment.

3.1.2.4 Paid Annual Leave

All employees have the right to paid annual leave, subject to a qualifying period of 12months service. Length of leave is proportional to the number of unauthorised absencesfrom work of the employee: 30 days if not absent more than five times, 24 days if absentbetween six and 14 times and so on. The full amount of holiday entitlement is normallytaken. Leave is normally to be taken in one period. There is no provision for additionalleave, for example, on grounds of length of service. The Constitution establishes a wagepremium of one third of salary for the leave period.

Embratur did not expect any increase in paid holiday in the short to medium term.

3.1.2.5 Public Holidays

There are ten public holidays per year. No change in public holidays is expected.

I January World Peace Day 1 May Workers' DayVaries by location Foundation Day 7 September National Day21 April Tiradentes Day 2 November All Saints Day

Good Friday 15 November Republic DayCorpus Christi 25 December Christmas Day

3.1.2.6 School Holidays

These are broadly the months of December, January and July. There are plans to decreaseschool holidays

3.1.3 Retirement

Overview: the retirement age is expected to rise and there are moves to reduce the publiccost of retirement provision and encourage private pension provision.

Normal Retirement Age: the official retirement age is 65 for men and 60 for womenand these are typically the actual ages of retirement. However, the actual retirement ageis expected to rise by 2000.Early Retirement: there are moves to discourage early retirement.

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Social Security Pension: there are moves to reduce the public expenditure costs ofretirement provision.

Private Pensions: to facilitate reducing public expenditure, private provision of supportin old age is being encouraged and the real disposable income of pensioners is expected torise.

3.1.4 Tourism Profile

3.1.4.1 Outbound Tourism

Outbound tourism from Brazil increased from 1.4 million trips in 1985 to 3.3 million tripsin 1997. 65% of trips were to destinations within the Americas region, followed byEurope (31%) and East Asia and the Pacific (3%). Inter-regional trips have increased at2.5 times the rate of trips to intra-regional destinations since 1985.

Average spend per trip has fluctuated slightly between 1991 and 1996. In 1996 theaverage spend per trip was US$1,534 and the average duration of trips was 17 days.Leisure travellers accounted for 63% of trips and the business related travel 27%.Holiday tourism is reported to be 45% packaged and 55% independently organised. Theleading ten destinations for Brazil tourists in 1996 are summarised in the table below.

Country Arrivals 000s Country Arrivals 000sUSA 838 UK 108Argentina 537 Germany 93Italy 351 Portugal 89Uruguay 175 Chile 62Spain 108 Switzerland 58

Source: WTO

3.1.4.2 Employment in Tourism

Limited tourism employment data was available. In 1994, total tourism employment wasreported to be approximately 5 million, compared to 5.7 million in 1990.

3.1.5. Leisure Time and Tourism: Industry view to 2005

The views of the Association of Brazilian Travel Agents are summarised below.

3.1.5.1 Socio Economic Factors

• total working hours may increase;

• paid holiday and public holidays may decrease, together with willingness to take fullholiday entitlement;

• the retirement age may rise with a fall in retirement income;

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• school holidays may be shortened;

• expenditure on holidays may fall.

3.1.5.2. Travel, Length and Type of Holiday and Accommodation

• any increase in travel is most likely tb be domestic or short haul;

• any growth in holidays is most likely to be in extended weekends and in tailored,package and all inclusive holidays;

• growth in accommodation demand is most likely to be for hotels.

3.1.5.2 Leisure Products

• increased demand from young people and young couples is expected for diving,trekking, theme parks, cruises, cultural and activity holidays;

• increased family demand is most likely for theme parks, multi city tours, skiing,fishing, coach touring and cruises;

• increased demand from those holidaying independently of their families is mostprobable for coach touring, trekking and winter sun.

• growth in demand from the retired is most likely for beach, winter sun, walking, coachtouring, pilgrimage, cultural and health related holidays.

3.1.6 Leisure Time and Tourism Conclusions

Brazil is the fifth largest country by population in the world and represents over 40% ofLatin America’s combined GDP. The population is predominantly young with an averageage of 23 years.

Embratur expects real incomes to rise in the medium term. Economic reforms haveresulted in the private sector being the driving force behind growth. Inflation has beenencouragingly low, enhancing investment. However, recent economic events havecreated a climate of uncertainty.

In January 1999, the Brazilian currency was devalued and then allowed to float. Theeconomic situation has yet to stabilise, but a general economic slowdown is expected andthis will adversely affect outbound leisure travel but may strengthen domestic tourism.

ABAV has advised on the likely pattern of demand as the economy recovers and outboundtourism strengthens

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3.2 CANADA

3.2.1 Key facts

1997 2010 ProjectionPopulation millions 30 33% of Population over 60 *16% 20%Labour Force millions 15 17GDP per head ppp US$ 21,700 N/a

* 1996Statutory Leave 2 weeks rising to 3 weeks after 5 years.Public Holidays 11 daysRetirement Age 65

1994 1995 1996 1997Unemployment % 10.4 9.5 9.7 8.6

1980 to 1990 1990 to 1996 1997Consumer Prices % Increase pa 5.3 1.8 1.8

1980 1996Service Imports US$ millions 10,558 35,772Travel as % of Total Service Imports 30.5 31.0Value of Travel Imports US$ millions 3,220 11,089

Working Week 40 hours per weekSources: World Bank, ILO, and Statistics Canada


3.2.2.1 Overview

Canada is a federal state and most employment regulation, including working hours, is atprovincial level.

3.2.2.2 Trends

Between 1986 and 1994 working hours reduced. The reductions were very gradual andessentially due to increases in both the length of paid annual leave and the number of paidstatutory public holidays. Unions have been prime movers in obtaining these reductionsin working hours.

Although the average working week had declined to 37 hours in 1994, an advisory reportfor Human Resource Development Canada found that this was misleading. Both full andpart time employees were counted and most job losses had been in full time jobs and mostnew jobs were part time. The apparent decline masked an increase in the number of fulltime employees working more than 50 hours a week. The report analysed the factors that

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led employers to prefer having full time employees work longer hours rather than hiringnew workers. The main factors were as follows:

• the costs associated with new personnel such as recruitment, training and benefit costs.The report noted that benefit costs can add up to some one third of payroll costs insome enterprises. Paid leave was found to be the largest benefit cost followed bypension and similar benefits, and social security costs. Most of these costs do notmaterially increase if an employee works longer hours;

• the wish to use capital equipment more efficiently; • supplementary hours worked by many salaried workers were not paid for by the

employer.

Between 1990 and 1995, average real incomes in Canada fell by as much as 6%. Thelosses fell entirely on men reflecting the loss of well paid primary resource andmanufacturing jobs.


Statutory hours of work are controlled on a daily and/or weekly basis. They are 8 hours aday and 40 hours a week at the federal level and in several provinces. However, someprovinces have a 44 hour week and Prince Edward Island has a 48 hour week.


Paid annual leave is a right of every employee in Canada in all jurisdictions. In alljurisdictions, except Saskatchewan, employees are entitled to two weeks paid annualleave after each completed year of employment. In Saskatchewan, employees are entitledto three weeks paid leave after one year, and four weeks after ten years, employment. Inother jurisdictions, increased annual leave is also provided for legally after a certainnumber of years service, typically to three weeks after five years.

The employer determines when an employee can take paid annual leave, within limits laiddown by the law. Employers cannot break down below one week the periods over whichleave can be taken.


The number of public holidays varies among the jurisdictions. The federal jurisdictionprovides 11 public holidays.

1 January New Year's Day August 1 DayGood Friday September* Labour Day

May* Victoria Day October* Thanksgiving DayJune Discovery Day 11 November Remembrance Day1 July Canada Day 25 & 26 December Christmas

NB * Always on Monday

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December / January 2 weeksFebruary 1 weekEaster 1 weekSummer: late June to August 8 weeks

3.2.3 Retirement

Overview: basic social security benefits are provided through the Old Age Security Plan(OAS). Earnings related benefits derive from the Canada Pension Plan (CPP) or theQuebec Pension Plan (QPP). The CPP system is being reformed to switch in part from apay as you go system to one with larger reserves. Changes are also being made tocontribution rates and benefits. Typically, at normal retirement age, pension income willreplace 53% of previous income.

Normal Retirement Age: the normal retirement age is 65.

Early Retirement: early retirement is not available under OAS. It is available underCPP and QPP, subject to reductions in benefit.

Social Security Pension: benefits under the plan are modest.

Private Pensions: employer sponsored supplementary pension schemes are widespread.Rising concern about the adequacy of their future public pensions is encouragingincreasing numbers of Canadians to put more savings into private schemes.



Outbound tourism from Canada increased from 15 million trips in 1985 to 20 million tripsin 1997. However, this was below the peak of almost 23 million in 1991. The averagespend per trip was over US$550 and the average length of stay was 10.4 days. Businessrelated markets accounted for 16% of outbound trips, VFR 18% and leisure markets 57%.The USA was the dominant destination and the Americas region attracted 83% of trips.Demand for European destinations (11% of trips) was relatively stable and demand forAfrica, East Asia/Pacific and South Asia grew overall. Canadian travellers to intra-regional destinations (83% of total trips) increased by 42% between 1985 and 1997,compared to 6% for inter-regional destinations. The leading ten destinations for outboundCanadian tourists in 1996 are summarised in the following table:

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Country Arrivals 000s Country Arrivals 000sUSA 15,301 Cuba 163UK 598 Spain 153France 476 Germany 132Mexico 269 Dominican Republic 128Italy 243 Jamaica 102Source: WTO

3.2.4.2 Domestic Tourism

Limited domestic tourism data was available. The number of trips fell from 80 million in1994 to 72 million in 1996, average spend fell from US$203 to US$183 and averagelength of stay per trip fell from 3.2 to 3.1 days. Domestic tourism market mix for Canadaremained relatively stable from 1994 to 1996, with VFR (43%) and leisure related (38%)the major sectors.


Total tourism employment increased slightly between 1990 and 1996. In 1996 tourismwas reported to support 492,000 jobs.

3.2.5 Leisure Time and Tourism: Industry View to 2005

The views of the Association of Canadian Travel Agents are summarised below.


• total working hours may increase, particularly after 2000, and so may willingness totake full holiday entitlement;

• a stronger rise in expenditure on additional holidays than main holidays is expectedthroughout the period to 2005.

3.2.5.2 Travel, Length and Type of Holiday and Accommodation

• some increase in short haul rather than long haul or domestic travel is expected; • main holidays are expected to decrease in length over the period with the principle

increase in extended weekends;

• tailored and independently organised holidays are expected to grow; • some growth in house exchange is expected in the accommodation sector.

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• the young, young couples and families are expected to be increasingly attracted toactivity, cultural and special interest holidays;

• the retired will share these preferences, with particular interest in learning and health

breaks, and a stronger interest than other segments in beach holidays and cruises;

• special interest, cultural, learning and eco-tourism are all expected to become moreimportant as the retired population increases, remains healthy much longer than earliergenerations and looks for ways to spend time.


Canadians enjoy rather more paid leave entitlements than their neighbours to the south inthe USA. Nevertheless, the same tendency towards more frequent but shorter breaks hasbeen noted by the travel industry. The strongest markets are among the retired, who havethe time and the means to travel in order to enjoy a wide range of activities and culturalpursuits.

3.3 UNITED STATES OF AMERICA

3.3.1 Key Facts

1997 2010 ProjectionPopulation millions 268 294% of Population over 60 *16 19Labour Force millions **136 150GDP per head US$ ppp 30,200 n/a

* 1996** includes unemployedStatutory Leave Nil – in practice most commonly 10 daysPublic Holidays 9 daysRetirement Age 65

1994 1995 1996 1997Unemployment % 6.1 5.6 5.4 4.9



Working Week 40 hours per weekSources: World Bank, ILO, Sedgwick Noble Lowndes

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3.3.2.1 Overview

The USA is a federal system, with federal and state governments exercising concurrentjurisdiction over most aspects of working time. At the federal level the Fair LaborStandards Act establishes the principle of a 40 hour week, after which overtime must bepaid at a rate of 150% of regular pay.

3.3.2.2 Trends

American employees work relatively long hours compared to those in other developed,industrialised countries. For full time workers, the trend in the 1980s and 1990s has beentowards slightly longer weekly hours of work. Paid annual leave and other forms of leaveare relatively modest by international standards. American productivity growth hasalmost tripled since the Second World War. However, in the view of Professor JulietSchor, a leading authority on leisure time in America, instead of taking some of thebenefits of that increase in free time, Americans have opted for increased consumption.Several other commentators have also remarked that increased working hours have led toa decrease in leisure time during the 1980s and 1990s, and warned of the negativeconsequences of this development. Professor Schor shows that over a 20 year period,there has been a reduction in leisure time of 140 hours per year for the average Americanemployee. It has been argued that workers accepted to work longer hours, to haveincreased overtime pay, because real wages declined during this period. It is estimatedthat, in 1998, the average American family regained the real income level it achieved in1989.

In The Overworked American (1990) Professor Schor wrote “We have paid a price forour prosperity. Capitalism has brought a dramatically increased standard of living, but atthe cost of a much more demanding work life. We take vacations, but we work so hardthroughout the year that they become indispensable to our sanity...”

A number of surveys in the 1990s have indicated that American workers, particularlythose with higher incomes, have not been satisfied with working such long hours andwould be willing to receive less income if they could have more leisure time. However,this is not easily done because of rigidities in job structure and time requirements. Foremployers this minimises employee numbers and therefore employee related costs,including employee benefits and social security.

Another important factor may be that, in many areas, trades unions have been weak in theUSA and the reduction of working hours has not been a priority for them since the 1930s.So there has been no countervailing institutional pressure to the employer preference forlonger hours. Whilst, in recent years, full time workers have been increasing theirworking hours, there has also been a growth in part time and other non standard work.Enterprises have been proponents of this form of flexibility to increase competitiveness.

In discussion of working time issues in the USA, unlike in Europe, there has beencomparatively little consideration of the possibility of reducing working time in favour ofthe creation of additional employment. This may reflect the lower level of unemploymentin the USA than in Europe in recent years. In the 1980s recession employees were more

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inclined to accept reduced wages as the price of job preservation than to negotiatereductions in working time.

The recent strength of the employment market has made employers more concerned withrecruitment and retention. So that those with scarce skills may be able to negotiate moreholiday time. The shortage of IT skills has even led some companies to offer goldenhandcuffs in the form of sabbatical leave, but only after three years employment. Thismarket driven approach contrasts with European legislation of holiday rights.


Normal hours of work, both at federal and very frequently at state level, are 40 hours overa five day week, although the law has many exceptions.


Law: there are no generally applicable provisions at the federal or state level.

Practice: typical service conditions are one week paid leave for one year of service, twoweeks for two years, three weeks for eight years, four weeks for 15 years and five weeksfor 20 years.


Each state establishes its own public holidays. In most cases there is considerable overlapwith federal public holidays, but most states have one or two public holidays of their own.Many states have between 10 and 13 public holidays in total per year. There are ninefederal public holidays.

1 January New Years Day September Labor Day15 January Martin Luther King Day 11 November Veteran's DayFebruary President's Day November ThanksgivingMay Memorial Day 25 December Christmas Day4 July Independence Day


Spring: April 1 weekSummer: June to mid August 10 weeksChristmas: December to January 1 to 2 weeks

Some new approaches to school holidays are being introduced. These eliminate the longsummer vacation and are based on eight week terms alternating with two week breaks. Ifthis approach becomes established it will have major implications for family holidays.Theme parks are among those already affected by a changing pattern of visits.

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3.3.3 Retirement

Overview: social security, although relatively substantial, is supplemented bywidespread private retirement plans.Normal Retirement Age: the full social security pension is payable from age 65. Theage for full pension is being raised for those born after 1937, and will become 67 from2027. A debate is underway on how to fund the steadily increasing cost of social securitypensions. The bi-partisan National Commission on Retirement Policy has recommendedchanges, which include rebating a proportion of current contributions so that individualscan invest this sum directly, thus introducing an element of pre-funding, and raising theretirement age to 70 by 2029. The hope is that these changes will encourage more privatesaving towards retirement. The administration believes that people are ill informed aboutthe need to plan and save for retirement.

Early Retirement: a reduced pension may be claimed from age 62.

Social Security Pension: the formula for calculating the social security pension isweighted in favour of the low paid and typically produces a pension in the range of 25%to 60% of final assessable earnings.

Private Pensions: the majority of employees participate in employer sponsoredretirement plans. A typical plan will provide a pension which, with social security,replaces between 60% and 80% of pre-retirement income.



Outbound trips from the USA have increased from 54 million in 1985 to approximately 64million in 1997. Intra-regional demand for the Americas (64% of trips) dominates USAoutbound travel. Demand for European destinations (26%) is rising but remains below1985 levels. The average expenditure per trip was estimated to be approximately US$800.The leading ten destinations for American tourists in 1996 are summarised in the followingtable.

Country Arrivals 000s Country Arrivals 000sMexico 20,314 Puerto Rico 2,211Canada 12,909 Germany 1,598UK 3,089 Bahamas 1,341Italy 2,884 Spain 913France 2,603 Jamaica 774

Source: WTO


Domestic travel by US residents increased by 8% during 1997 and totalled 1.3 billiontrips. The main market sectors for domestic demand were VFR (36%), leisure (35%) andbusiness related (23%). Travel expenditure by residents within the USA was US$408billion, a 74% increase over 1987 figures.

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The 1996 report of the Washington Economic Policy Institute notes continuing jobinsecurity among American employees and suggests there are "general deregulatory,laisser faire shifts in the economy" which have "weakened the bargaining power ofworkers, both union and non union, both blue and white collar". In these circumstancesincreasing leisure time is unlikely to have high priority in employment negotiations.

For companies, the increase in hours worked in America means higher output, loweroverheads and larger profits. For employees it may be that low rates of marginal tax, byinternational standards, encourage Americans to choose extra money rather than extra freetime. In contrast a more heavily taxed European might choose extra leisure. Thepenalties for not working hard may be greater in America. To take a full two weekholiday may indicate an insufficient level of commitment. Many of the changes inmanagement in recent years, especially down sizing, have required extra effort fromemployees and some companies practice "stretch management", which means settinggoals just beyond the employees previous limits. An additional factor is that in the caseof management staff overtime may cost the employer practically nothing.

Against this background, evidence is emerging of employee dissatisfaction. A study forRobert Half, the recruitment consultancy, found that two-thirds of Americans would likeshorter working hours for corresponding lower pay. The average cut they would beprepared to take rose from 13% in 1989 to 21% in 1996. The Merk Family Fund thinktank found in 1995 that 28% of Americans had, in the past five years, sacrificed at leastsome working hours for more free time.

Employers are introducing some new approaches. These include "alternative workschedules", which enable employees by working extra hours to build up an additionalleave day. These days are invariably used to make up a three day weekend. Somecompanies are creating "time off" banks, which group together all potential time off;vacation days, sick days and sometimes public holidays. Employees then diminish theirentitlement whenever they are away, regardless of the reason. Some enlightened firmshave introduced job sharing for professional employees, albeit on a very limited scale.Another development, which illustrates the latent demand for more leisure time, is theemergence of the "downshifter", the senior executive who opts for a less demandinglifestyle with more time for himself.

Demographically, the fact that far more women now work in America is also changingattitudes. In the dual income household family responsibilities make women moreresistant than men to long and, especially unpredictable, hours. In addition, dual incomecouples find it more difficult to plan time off together for holidays. Divorce, leading tocomplex responsibilities for children, also complicates holiday planning.A further major demographic factor is the baby boomer generation, born between 1946 and1964. Baby boomers have been much worse at saving than earlier generations. They havecounted heavily on the recent strength of the stock market to boost their future incomesand now often find themselves the "sandwich" generation, struggling to meet continuingeducation costs of their children and the rising bill for the health care of ageing parents. Itwas once thought that this generation would retire early but recent polls suggest that mostexpect to work on beyond 65. For the present, most boomers are still in the work force.

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Many work very long hours and stay healthy by jogging or going to the gym. So avacation trip with an activity component is very appealing. More easily accessible outdooractivity products are being offered than ever before. As to their future travel preferences,they are a very heterogeneous group, difficult to predict. These boomers, growing older,more prosperous and more stressed, are increasingly aware that they have a surfeit of"stuff" and not enough of the biggest luxury of all, free time. In a 1997 poll by KurtSalmon Associates 44% said that given the choice they would rather have more free timethan more money. Consumer analysis shows that boomers will spend an increasingproportion of income on recreation and leisure, rather than on goods. Adjusting forinflation, consumers' annual outlays for recreational services have risen 6% in each of thepast five years.

Retailers are responding by mixing goods and services to enhance the shoppingexperience; bookshops with cafes and live music are a current example.

Cruise ship companies are promoting multi-generational experiences, which enableextended families to enjoy quality time together, along with opportunities to enjoyindividual pursuits. An attractive offer for quick getaways, mixing self-improvement,relaxation and entertainment.

Theme parks, conveniently located, also offer quick domestic breaks for families and newdevelopments, for example, Disney’s Animal Kingdom safari park in Florida, provides tosome extent an alternative to overseas travel.

Special interests can motivate travel, but are more likely to impact frequency than triplength. Most Americans have hobbies and/or belong to organisations or clubs: (bridge,quilting, gardening etc).

The USA was ranked 1st in the world with 13.6% of global outbound tourism expenditurein 1997. However, this understates the importance of American tourism because of thestrength of domestic tourism, which reflects the range of attractions and, comparativelylimited leisure time for lengthy trips.

In present economic circumstances there is unlikely in the short term to be any increase inpaid holiday entitlements and tourism growth among the employed is likely to beparticularly strong for short weekend and public holiday related breaks. This is likely tofavour domestic and other nearby destinations, rather than long haul travel. There hasbeen a move to shorter, more frequent breaks throughout the year, a rise in three dayweekends and a decline in long vacations, which may particularly affect long hauldestinations. The market will be increasingly looking for value for money and for shortvacations designed to make highly efficient use of limited leisure time.

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SECTION 4

ASIA PACIFIC REGION

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SECTION 4 ASIA PACIFIC REGION

4.1 AUSTRALIA

4.1.1 Key Facts

1997 2010 ProjectionPopulation millions 18 20% of Population over 60 *16 19Labour Force millions 9 10GDP per head US$ ppp 21,400 n/a

* 1996Statutory Leave 20 daysPublic Holidays 8 daysRetirement Age 65 Men 61 Women

1994 1995 1996 1997Unemployment % 9.0 8.2 8.5 8.4



Working Week 38 hours per weekSources: World Bank, ILO, and Australian Bureau of Statistics


4.1.2.1 Overview

Australia is a federal state with jurisdiction for working time issues shared between thefederal and state levels of government. In recent years enterprise level negotiation ofemployment terms has been encouraged so that agreements are tailored to suit theparticular work place. The intention has been to improve productivity andcompetitiveness.

4.1.2.2 Trends

The general principle of a 38 hour week was established in 1983. Recent years have seensome decrease in annual working hours due to increases in leave entitlements. Moreflexibility of working hours has developed so that more efficient use is made of capitalequipment but at the same time employees can accumulate additional leave days, forexample, by working long shifts over periods of peak demand. There has also been atrend towards part time work.

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Law: there is no general federal law on normal working hours, but 38 hours isestablished as the norm. Working hours are determined by statute, collective agreementsand individual contracts.

Practice: the 38 hour, five day normal work week is widely established. Average hoursusually worked, including full and part time, for 1994, 1995 and 1996 were 34 hours perweek.


Law: the minimum national standard for most workers is four weeks paid leave after ayear of employment.

Practice: the generally accepted practice is four weeks annual leave. Private sectorworkers in remote locations may have five weeks leave. In addition there is long leave.The standard private sector entitlement for long leave is 13 weeks after 15 years. Thepublic sector offers broadly similar provisions.


There are eight national public holidays. In addition there are up to three holidays at Statelevel.

1 January New Years Day 25 April ANZAC Day26 January Australia Day 8 June Queen’s Birthday

Good Friday 25 December Christmas DayEaster Monday 26 December Boxing Day


School holidays, which are settled at state level, are broadly as follows:

April 2 weeks September/October 2 weeksJuly 2 weeks December/January 6 weeks

4.1.3 Retirement

4.1.3.1 Overview

Australia’s retirement income system consists of a means tested public pension scheme,and a compulsory and voluntary occupational superannuation scheme. The aim is toprovide an adequate public “safety net” for those unable to support themselves inretirement and at the same time encourage people who are able to save for their retirementto do so. Assets in the current Australian superannuation system are reported to begrowing strongly and the system is far from maturity. Therefore, new retirees in 2005 areexpected to receive larger payouts than those currently retiring.

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4.1.3.2 Normal Retirement Age

The current statutory retirement age is 65 years for men and 61 years for women. Theactual retirement ages are 61 years and 56 years respectively. Policy measures include agradual increase in the pension age for women.

4.1.3.3 Early Retirement

Early retirement is being discouraged through incentives for those retiring later, includingthe recently introduced pensioner bonus scheme, which gives a cash bonus for thoseworking beyond the official retirement age and deferring receipt of their pension.

4.1.3.4 Social Security Pension

The basic pension is a non-contributory scheme funded by Australian federal governmentgeneral revenues. The payment structure consists of a basic rate which varies with maritalstatus, to which a range of additional benefit payments may be added depending upon thecircumstances of the recipient. Over the last ten years, the government has placed greateremphasis upon self-provision in retirement through occupational superannuation pensionschemes. In November 1995, 87% of full time workers, and 62% of part time workers,were covered by superannuation schemes. The two forms of compulsory superannuationcontribution are those required under industrial agreements and those made as part of thegovernment’s superannuation guarantee arrangements. Under voluntary superannuationarrangements, employers, particularly large companies and a majority of public sectoremployers, provide support over the guaranteed superannuation level. At present,superannuation schemes supplement rather than replace the basic pension.

4.1.3.5 Private Pensions

Individuals are also able to contribute, via personal remittance or salary deduction, to apersonal superannuation fund with a financial institution, life insurance company or aRetirement Savings Account. These contributions can often be made to the same fund ascompulsory superannuation contributions.

4.1.4 Employer and Trade Union Views on Leisure Time Trends

The Business Council of Australia advises that, since the early 1990s, labour law reformshave facilitated a move away from traditional leave arrangements and towards agreementsat enterprise level. Therefore it is now open to employers and employees at collective orindividual level to alter the basis and the time when leave is taken, especially annual leave.There are examples of leave being taken to correlate with family needs rather than simplyemployer convenience. There are also examples of increased annual leave entitlementsarising from increases in hours worked or in spans of working hours.

There is also evidence of a growing use of opportunities to trade-off paid overtime forleave-off-in-lieu, which may benefit domestic travel by increasing opportunities to takelong weekends. In this way an increase in overtime does not necessarily reduce aggregateleisure time or the resources ultimately allocated to leisure or tourism.

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Outbound tourism from Australia increased from 3.5 million trips in 1985 to 5.1 million in1997, when the average expenditure per trip was in excess of US$1,100. It is estimatedthat 46% of trips were leisure related, 25% VFR and 18% business related. Although theEast Asia / Pacific region attract the most tourists (49% of total trips), Europe (31% oftrips) and, to a lesser extent, the Americas (15% of trips) are of particular significance tothe Australian outbound market. 51% of trips were inter-regional, although there wasgreater growth in intra-regional trips from 1985 to 1997. The leading ten destinations forAustralian tourists in 1996 are summarised in the table below.

Country Arrivals 000s Country Arrivals 000sUK 655 Indonesia 380France 463 Singapore 352USA 461 Hong Kong 311New Zealand 436 Thailand 215Italy 417 Malaysia 150

Source: WTO


Domestic tourism increased from 49 million trips in 1980 to 63 million trips in 1996. 36%of trips were leisure related, 30% VFR and 17% business related. The average duration oftrips was 4 nights.


Tourism was estimated to support over 1 million jobs, accounting for 12% of the workforce.


Views of the Australian Federation of Travel Agents are as follows:


• weekly and annual working hours are likely to increase as a result of longer workingdays;

• no change in the number of paid holidays, the number of public holidays or the

willingness to take full holiday entitlement;• no change in retirement age and income; • increased unemployment; • no change school holiday length, scheduling or the length of the school week; • rise in main holiday expenditure.

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4.1.6.2 Travel

• increase in long haul, short haul and domestic trips to 2000, followed by stagnation; • increase in length of trips after 2000; • increase in package and all inclusive holidays up to 2000, but no increase in tailored and

independently organised holidays;

4.1.6.3 Accommodation

• no significant change in accommodation preferences is expected.


• cruising and short break holidays are expected to be key growth markets.


The continuing growth of short break additional holidays is likely to benefit the mosteasily accessible domestic and short haul international destinations. As a particularinstance of this trend, the airlines have worked to develop domestic city short breaks. Therise of dual income couples, together with increasing work pressures, longer workinghours and concerns about job security, are expected to result in shorter holidays.

The collapse in some inbound tourism markets from Asia led airlines to reduce oreliminate services. This initially hindered outbound tourism, as did the weakening of thecurrency.

4.2 CHINA

4.2.1 Key Facts

1997 2010 ProjectionPopulation millions 1,227 1,349% of Population over 60 *10 12Labour Force *718 804GDP per head US$ ppp 3,460 n/a

• 1996• Statutory Leave 10 daysPublic Holidays 7 daysRetirement Age Men 60 Women 50

1997Unemployment Estimate % 8 to 10

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1990 to 1996 1997Consumer Prices % Increase pa 13.5 2.8

1980 1996Service Imports US$ millions 2,024 25,585Travel as % of Total Service Imports 3.3 19.8Value of Travel Imports US$ millions 67 5,066

Working Week 40 hours per weekSources: World Bank, ILO, China National Tourism Administration


4.2.2.1 Overview

Working hours, which are determined by statute, have steadily reduced in recent years.

4.2.2.2 Trends

Over the past three years the working week has reduced from six to five days and dailyworking hours from 48 to 40.

4.2.2.3 Normal Working Hours

Since 1996 the normal working week has been eight hours a day and 40 hours a week.


Holiday entitlements are determined by statute. The average number of days paid holidayis 10.


There are seven national public holidays. There are no plans to change public holidays.

1 January New Year’s DayJanuary/February Spring Festival 3 days1 May Labour Day1 and 2 October National Days


No changes in school holidays are planned. School holidays are as follows:

January / February 15 daysJuly /September 60 days

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4.4.2.3 Retirement

4.2.3.1 Overview

There are moves to reduce the public expenditure cost of retirement provision byencouraging private provision of support in old age. The old pension system, under whichemployees relied on their employers for pension coverage, is giving way to a three partyarrangement where responsibility for pensions is shared between the state, employers andindividuals. China’s demographics, reflecting the one child policy, make pension reforma priority. The proportion of the population over 60 will increase to 22% by 2030.


The official retirement age is 60 for men and 50 for women. These are also the averageages of actual retirement and no changes are planned.


Early retirement is being encouraged.


It is expected that this will increase over the years to 2005.


The new system being developed is expected to include provisions for private pensions.



Outbound tourist trips from China increased from 0.5 million in 1985 to 5.9 million in1997. China ranks 10th in the world, measured by outbound international tourismexpenditure, up from 40th in 1990. Outbound international tourism is dominated by intra-regional trips to the East Asia and Pacific region (81% in 1997). This is followed byEurope (12% of trips). The leading ten destinations for outbound Chinese tourists in 1996are summarised in the following table.

Country Arrivals 000s Country Arrivals 000sHong Kong SAR 2,311 Japan 242Macau 540 Singapore 227Thailand 457 Korean Republic 200Vietnam 378 Malaysia 136Russian Federation 349 Germany 133

Source: WTO

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China’s domestic tourism increased from 0.4 billion trips in 1993 to 0.6 billion in 1996,when the average expenditure per trip was US$64. Since the Asian economic crisis, whichresulted in a decline in regional visitors to China, the domestic market has been able totake advantage of low occupancy in accommodation and other facilities planned for theinbound market.


International tourism to China is estimated to directly employ 1.2 million, with indirectemployment estimated at 6 million.


The development of Chinese outbound tourism is still at an early stage, but the growthpotential is very great. At present Chinese nationals must nominate the country ofdestination when applying for a passport, which is valid for one use only. The systemworks more speedily for countries granted approved tourist destination status. At presentthis status is enjoyed by six Asia Pacific countries. Among developed nations, Australiahas taken a lead in trying to capture an increased share of the Chinese market and hasthree visa issuing offices in China. Some European countries have established a presenceto gather market intelligence and contacts with the trade.

China has strong economic growth potential. It also has the largest population in theworld and this is set to grow by 134 million or 11% to 1,349 million by 2010. Givencontinuing moves to facilitate outward travel, the development of outbound tourism canbe expected to continue strongly. Domestic tourism is also expected to growsignificantly. However, in the short term there is concern about the impact of thefinancial crisis in Asia.

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4.3 JAPAN

4.3.1 Key Facts


* 1996Statutory Leave 10 to 20 daysPublic Holidays 14 daysRetirement Age 65

1994 1995 1996 1997Unemployment % 2.9 3.1 3.3 3.4


1980 1996Service Imports US$ millions 32,360 129,962Travel as % of Total Service Imports 14.2 28.5Value of Travel Imports US$ 4,595 37,039

Working Week 40 hours per weekSources: World Bank, ILO, JNTO, and Sedgwick Noble Lowndes


4.3.2.1 Overview and Trends

The Japanese Government has made significant efforts to lower annual working hours. In1986, with a six day, 48 hour week, extensive overtime and short leave entitlementswhich were not fully utilised, actual annual working time averaged 2,104 hours, which byfar surpassed levels in all other industrialised countries. In 1987, the goal was set ofreducing annual hours worked to 1,800, through the gradual introduction of the 40 hourweek. The purpose of this shorter hours policy was not to reduce working hours in orderto resolve an unemployment problem, but rather to stimulate leisure related consumptionduring the expanded non work hours and bring Japanese working time more into line withEurope and North America.

By 1995, the 40 hour week had been achieved at 95% of establishments with 300 or moreemployees. The difficulty is with smaller businesses, which have a continuing exemptionpermitting a 46 hour working week. The Government has also promoted the introductionof the five day working week to replace the six day week. By 1994 some 50% of allemployees enjoyed a regular five day week and some 90% a periodic five day week.

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Since 1987 the normal working week has been eight hours a day and 40 hours a week.However, the weekly working time for large numbers of employees in smaller businessesis still 44 hours, due to the exemptions mentioned previously.


Law: after one year of employment employees are entitled to 10 days paid leave. Theentitlement increases by one day each year, up to a maximum of a further 10 days.Average paid holiday entitlement is 17.2 days.

Practice: up to 40% of paid leave is not taken. In order to pursue the officialgovernment policy to reduce hours, companies tend to offer extra paid annual leave ratherthan cut working hours. The average number of days of paid leave, which is actuallytaken, is 9.5.


There are 14 national public holidays. If one of these days falls on a Sunday, thefollowing Monday is a holiday.

1 January New Year's Day 5 May Children's Day15 January Adults Day 15 September Aged Peoples Day11 February Foundation Day September Autumnal Equinox DayMarch Spring Equinox Day 10 October Sports Day29 April Green's Day 3 November Culture Day3 May Constitutional Memorial Day 23 November Labour Day4 May Golden Week Holiday 23 December Emperor’s Birthday


At present the second and fourth Saturdays of each month are holidays. It is planned tomove fully to a five day school week. School holidays are generally as follows:

Easter: March / April 12 daysSummer: July to August 43 daysChristmas: December / January 14 days

4.3.3 Retirement

4.3.3.1 Overview

Social security pensions are normally supplemented by a lump sum at the end of lifetimeemployment or on earlier termination of employment. The rapid ageing of the population(at a higher rate than in any other developed country) presents Japan with a challenge at atime of little or no economic growth. The finances of the social security system are beingstrengthened through a gradual decrease in benefits and an increase in contributions. Loweconomic growth has produced deficits in some of the countries pension funds.

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Both the national (flat rate) and the employee (earnings related) pensions are payable infull from age 65.


The national pension, for those employees not covered by employee pension insurance, ispayable from age 60 subject to an actuarial reduction. For employees covered byemployee pension insurance, a pension equal to the national pension may be payable fromage 60, but this provision is being phased out between 2003 and 2013.


In addition to a monthly national pension, there may also be entitlement to earningsrelated benefit.


Technically there is no such thing as normal retirement age in Japan for the corporateemployee. Teinen, which translates as "age limit", is widely used in employmentcontracts and is set at 60 to avoid difficulty in discharging employees. But it signifies theend of job security rather than retirement. Employees may remain on a short term basis ortake a job elsewhere.

Given the expectation of serious labour shortages in the medium term, and the rapidlyageing population, the government wants to encourage later retirement. Reductions insocial security benefits, if they are taken before 65, have already been introduced.Nevertheless, private corporations are encouraging earlier retirement as an aspect ofrationalisation. There is no retirement benefit (apart from social security) in the literalsense. Instead there are "benefits at termination of employment". These are usually lumpsums, which are preferred to pensions or annuities and are paid at “teinen”.



Outbound international tourism from Japan increased from 8.5 million trips in 1985 to 27.5million trips in 1997. 83% of trips were leisure related and the average length of tripsremained constant at 8 days. Inter-regional trips (57% of the total) exceeded intra-regionaltrips. 25% of trips were to Europe and 29% to the Americas. The leading ten destinationsfor Japanese outbound tourists in 1996 are summarised in the table below.

Country Arrivals 000s Country Arrivals 000sUSA 5,183 Singapore 1,172Hong Kong 2,383 Guam 1,029Italy 2,174 Germany 801China 1,549 Canada 650Korean Republic 1,527 UK 595

Source: WTO

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From 1990 to 1995, domestic tourism fluctuated from a high of 215 million trips (1991) toa low of 187 million trips (1995 and 1996).

4.3.5 Leisure Time and Tourism: Industry Views to 2005

Views of the Japan Association of Travel Agents are as follows:


• annual and weekly working hours may decrease, but no change is expected in paidholidays;

• a decrease is expected in the willingness to take full holiday entitlements;

• in the short term, there may be an increase in unemployment and looking further aheadretirement incomes may decrease;

• no change in expenditure on main holidays until 2000, with a small increase inadditional holidays continuing through to 2005.

4.3.5.2 Travel, Length and Type of Holiday, and Accommodation

• modest increases in long and short haul outbound travel up to 2000, with strongincreases thereafter;

• some increase in domestic travel;

• no change in the number of holidays, except for some growth in short breaks and quitestrong growth in extended weekends;

• strong growth in independently organised holidays and some growth in tailoredholidays, but a decrease in all-inclusive holidays.

4.3.5.3 Leisure Products to 2000

• among young people, growth in activity holidays, especially diving which is alsoexpected to grow in popularity with young couples and families;

• the retired market is expected to show strong growth in special interest, wild life, eco-tourism, cultural, learning and health tourism, with some growth in demand for golf,walking and coach touring holidays;

• no growth in gaming.

4.3.5.4 Leisure Products to 2005

• beyond 2000 stronger growth among the young for skiing, particularly snow boarding,learning, event related, multi-city tours, health and theme park holidays;

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• steep decline in coach touring by the young, young couples and families, with someincrease among the retired;

• increase by families in winter sun, beach, and self driving touring holidays, togetherwith a strong increase in walking and trekking, particularly by family members takingholidays independently;

• among the retired, strong growth in cruising and special interest holidays, withsignificant growth also expected in golf, learning, cultural, wild life and otherecological and health tourism.


4.3.6.1 Leisure Time and the Economy

The Japan National Tourist Organisation's (JNTO) Report on Tourism in Japan 1996/7addresses the question of leisure time and working hours. The report notes that achievinga richer, more meaningful life for the Japanese people, by reducing working hours andenhancing leisure time, is among the most important issues being addressed by thegovernment. It recalls the 1995 annual opinion poll on the people's lives, conducted by thePrime Minister's Office. "Leisure" (at 35%) was the aspect of their lives that the Japanesemost desired to enrich in the future. This has been the case for 13 consecutive years.However, studies by the Leisure Development Centre show a slight rise between 1996 and1997 in the relative importance attributed to work rather than leisure.

JNTO recognises that tourism will be a key sector of the national economy in the nextcentury. Among many consequential recommendations to government, it includes theneed for action to spread holiday taking through the year to reduce peak period pressuresand make it easier for family members to take comparatively long holidays together. Aspecific proposal is to combine public holidays with weekends to create three or four daybreaks. In 1998, on this basis, the government created two “Happy Mondays”, three dayweekends to stimulate travel and leisure related spending.

However, in May 1998, a Tokyo court ruled that Japanese workers must take holidayswhen it suits their employers. The consequence is that many Japanese never take time offoutside the three peak holiday periods of the new year, Golden Week and the o-bon seasonin August, when families return to their ancestral villages to tend graves. Companies oftenclose for these periods, so that employees take their annual leave when prices are highestand resorts most congested

JNTO also recognises that, by encouraging outbound tourism, it is possible to reduceunfavourable trade balances between some countries and Japan and suggests that specialconsideration should be given to stimulating tourism to these countries.

It is widely anticipated that, to meet internationalisation and global competition, Japanesecorporations will restructure, rationalise and press for a more flexible labour market. TheJapanese Federation of Employers Associations has estimated that deregulation couldresult in the loss of 10% of jobs in the leading sectors of the economy, reduced jobsecurity and a significant rise in the rate of unemployment. If these developments take

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place they may add new life to the debate on how to achieve a better balance betweenworking life and leisure.

Professor Munehiko Harada, of Osaka University of Health and Sports Science, a leadingexpert on leisure issues in Japan, has commented that the word "leisure" in Japanesemeans "left over spare time". For many in Japan, this is regarded as time to recover fromthe exhaustion of work and not yet as an opportunity for self-realisation and self-expression. Professor Harada believes that a new leisure orientated class has emerged ofyoung people, homemakers and elderly people. These groups, with financial resourcesand time to spare, have been setting the pace for trends in leisure. However, in the shortterm, given the limited reductions in working time achieved over recent years, it seemsunlikely that there will be significant increases in leisure time. So for “salary men”,opportunities for long haul leisure travel will continue to be severely restricted and shorterdomestic and intra-regional trips, often around weekends and public holidays, will remainstrong. In a more cost conscious Japanese market, the recent East Asian devaluations willalso strengthen the appeal of regional destinations. Nevertheless, the increasing numbersof retired in a rapidly ageing society, and the increasingly adventurous young and theoffice ladies, comparatively free from time constraints will continue to present marketingopportunities for both intra-regional and long haul travel.

4.3.6.2 Tourism Prospects

The 1998 Japan Travel Bureau (JTB) report on Japanese overseas travel overseas notedthat 1997, characterised by poor economic performance and a weak yen, was not afavourable year for the outbound travel industry. The JTB anticipated a further decline in1998, with fewer tourists going abroad for the first time in eighteen years. Domestic travelin summer 1998, showed slight growth both for low cost travel and at the luxury end of themarket. In the longer term JTB remains confident that, as the Japanese and Asianeconomic problems are resolved, tourism in the region will recover fully early in thecoming century. The report notes that among reasons for not travelling abroad the mostimportant, cited by over 40% of people was "security concerns", followed by languageconcerns at just under 40%. Despite an environment of diminishing travel costs, "costs toomuch" was the third most important reason given for not travelling. Over 40% of middleaged men claimed they were unable to take time off for travelling.

Protracted economic recession has lead to an intensifying mood of gloom, arising fromfalling incomes, rising job insecurity and concern about pension funding, with somecompany pension schemes significantly under funded. The national mood has beencharacterised by a reluctance to travel overseas. Travel industry efforts to stimulatedemand by reducing package tour prices have had limited success. The sluggishness in theJapanese outbound market is likely to continue in the short term. A positive factor for thefuture is that those who have once travel overseas are inclined to continue to do so as theyget older. Given Japan's ageing society this should make for rising departure ratios in theolder age groups. Liberalisation of air travel between Japan and the USA is also expectedto result in cheaper air travel and stimulate outbound travel in the medium to long term.

JTB identify a number of preconditions for outbound growth:

• economic recovery;

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• development of packages and destinations which are attractive to the elderly market, thefuture growth segment;

• extension of Narita and Kansai international airports, which both reach saturation atpeak times;

• development of more travel packages with a free time component;

• expansion of lower cost air travel; • guaranteeing the safety and security of those travelling abroad; • countering the mistrust of travel agents.

JTB emphasise the importance of the travel industry catering for increasingly diversetravel preferences which allow closer contact with the local lifestyle, culture and customsand more contact with local people. In the case of packages substantial free time, mobilephone rental, enhanced booking services and other features should be available. Internetand convenience store terminals, to facilitate selection and booking, are expected to boostsales, especially as more experienced and cost conscious travellers increasingly plan andbook their own travel and holiday arrangements.

Japanese guilt about being away from work is likely to be strengthened in the short term bythe economic difficulties. Work is a virtue and when growth resumes for those of workingage holidays are likely to continue to be focused on two to four day breaks, which fit wellwhen weekends and public holidays are combined. Leave of over four days is consideredlong and more than half of overseas trips are under five days. Within the tourism industrythere are suggestions that, in the face of continuing Japanese reluctance to take holidayentitlements, there should be some stronger requirement for people to take their holiday, asone means of stimulating economic demand and encouraging renewed economic growth.

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4.4 KOREAN REPUBLIC

4.4.1 Key Facts


* 1996Statutory Leave 22 daysPublic Holidays 18 daysRetirement Age 60

1994 1995 1996Unemployment % 2.4 2.0 2.0



Working Week 44 hours per weekSources: World Bank, ILO, and Korean Ministry of Culture and Sports


4.4.2.1 Overview

In the Republic of Korea working time is determined by collective bargaining and bystatute, The Labour Standards Law, which establishes hours of work, public holidayarrangements and paid annual leave. In 1989, weekly hours of work were reduced from48 to 44. In some sectors hours actually worked are frequently higher than 44 because ofovertime. In practice Korean workers normally take only a relatively small proportion oftheir legal entitlement to paid leave. In some sectors collective bargaining has reducedthe working week to 42 hours and in some other sectors a five day week has beenintroduced, although the normal working week has been five and a half days.

4.4.2.2 Trends

Actual hours of work are still relatively high in comparison with developed industrialisedcountries. Following the financial crisis, and acceptance of the IMF austerity programme,the Government amended the Labour Law to reduce job security and introduce moreflexibility for the arrangement of working hours.

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Law: the Labour Standards Law provides that normal hours of work shall not exceedeight hours per day and 44 hours per week.

Practice: the normal working week is five and a half days. Some manufacturing firmshave adopted alternate five day and six day working weeks.


In Korea there are two types of paid leave, which together are the equivalent of paidannual leave in other countries:

Paid Annual Leave: ten days paid annual leave is granted after one year of service.Employers are then required to grant an additional day of paid annual leave for each yearof service, to a maximum of 20 days.

Paid Monthly Leave: the law also entitles an employee to one day of paid leave permonth, which must be accumulated.

Combining annual and monthly leave, employees are legally entitled to a minimum of 22days of paid annual leave per year, rising to 32 days after ten years service.

Practice: a sample survey of 360 enterprises in 1989 showed that employees actuallyused an average of three days of their combined paid annual and monthly leaveentitlement. The reason is that many employees are paid premium wages when they workon days on which they are entitled to paid leave, and prefer higher wages to free time. Inmost establishments, three to six days special summer leave are granted in addition topaid leave. According to the same survey, four days of paid summer leave are taken onaverage. Paid holiday entitlement is expected to increase in future years.


There are 18 public holidays in Korea. There are no plans to change the public holidays.It is still relatively common for employees in smaller businesses to work on publicholidays and receive premium pay.

1 & 2 January New Year 6 June Memorial DayLunar New Year 3 days 17 July Constitution Day

1 March Independence Day 15 August Liberation Day5 April Arbor Day September Thanksgiving Day 3 days1 May Labour Day 3 October National Foundation Day5 May Childrens’ Day 25 December Christmas DayMay Buddha's Birthday

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Spring: February 7 to 10 daysSummer: July/August 40 to 50 daysWinter: Dec/ Jan 40 to 50 days

There are no plans to change school holiday arrangements.

4.4.3 Retirement

Overview: the national pension scheme provides for a statutory scheme covering mostemployees, based on employer and employee contributions.

Normal Retirement Age: the official retirement age for men and women is 60 but it isexpected to rise before 2000;

Early Retirement: there are moves to discourage early retirement;

Private Pensions: there are no moves to reduce the public expenditure cost of retirementby encouraging private pension provision.



Outbound tourism from Korea increased from 0.5 million trips in 1985 to 5.6 million tripsin 1997. 73% of tourist trips were to intra-regional destinations. The major inter-regionaldestinations were the Americas (19% of all trips) and Europe (7% of all trips). Theaverage spend per trip was estimated to be approximately US$1,100. It is estimated that51% of outbound trips are leisure related, 22% business related and 11% VFR. Theleading ten destinations for Korean tourists in 1996 are summarised in the table below.

Country Arrivals 000s Country Arrivals 000sJapan 994 Singapore 385USA 796 Indonesia 250China 694 Australia 228Thailand 489 Guam 195Hong Kong 397 N Mariana Islands 188

Source: WTO


In 1996, the average length of domestic tourist trips was three days and the averageexpenditure per trip was US$314.


It is estimated that, in 1994, tourism supported 2.2 million jobs.

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The views of the Korean Association of Travel Agents are as follows:

4.4.5.1 Socio Economic

• hours worked per year will decrease substantially through the period to 2005 withsome increase in paid holiday;

• there will be no change in public holidays;

• willingness to take full holiday entitlement will increase;

• the retirement age will rise;

• retirement income will increase;

• school holidays will increase moderately in length and there will be more staggering ofthese holidays;

• real expenditure on holidays will increase, particularly on additional holidays.

4.4.5.2 Travel

• long and short haul and domestic travel will increase;

• main and additional holidays and extended weekends will increase;

• the frequency of holidays will increase;

• package, tailored and all-inclusive holidays will increase. Independently organisedholidays will increase substantially.


• self-catering, hotels and apartotels demand will increase and second home basedholidays will increase substantially.


• growth is forecast for beach holidays, activity holidays, cultural trips, touring andhealth holidays over the period to 2005. Young people, young couples, families andindependent family members are expected to be particularly interested in theme parks.Young people are also expected to have a strong interest in learning holidays and citytouring.

• the retired are expected to be enthusiastic about walking, trekking, golf, cruises andhealth breaks.

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Information collection was completed before the seriousness of the Asian economicdifficulties became evident. However, in 1993 the President warned about the weakeningwork ethic and the danger of resulting national economic decline. The longer term impactof the economic difficulties is unclear. However, the devaluation and the conditionsattached to the negotiated IMF loan are likely to inhibit any moves towards increasedleisure time for the immediate future and to reduce consumer confidence. The short termeconomic prospects are likely to depress outbound travel. A January 1998 economicausterity programme included discouragement of the promotion of overseas travel and acampaign to encourage Koreans to stay at home for their holidays.

Korean GDP contracted significantly 1998 and a further shrinkage is widely forecast for1999. The national motto is "export or die", but half of Korea's exports go to Asia, sorecovery is likely to be slow. Despite the effort put into export led growth OECDpredicted a rise in unemployment and a decline in domestic demand. Unemploymentbenefits remain meagre.

With many companies cutting salaries of managers and professionals, some workersworking without pay and realisation that the old social contract of lifetime employment isended, the economic crisis has created social trauma, which will have lasting effects onthis deeply conservative society. Recovery of the outbound market is likely to be slow andhesitant.

4.5 MALAYSIA

4.5.1 Key Facts

1997 2010 ProjectionPopulation millions 20 26% of Population over 60 *6 8Labour Force millions 8 12GDP per head US$ ppp 11,100 N/a

* 1996Statutory Leave 8 days increasing to 16 daysPublic Holidays 13 daysRetirement Age Men 55 Women 50 (Government Employees)

1996Unemployment % 2.6


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Working Week 44 hours per weekSources: World Bank, ILO, and Malaysian Ministry of Culture, Arts and Tourism


4.5.2.1 Overview

Working hours are determined for the public sector by statute and for the private sector bycollective agreement or individual contract.


The Ministry advises that the hours of work have remained constant through 1995/1997 at44 hours over a 5.5 day week. Some reduction in hours of work is expected in the longerterm, beyond 2000.


The Employment Act 1955 provides 8 days initially and 12 days after 2 - 5 years.Thereafter up to a maximum of 16 days. The average paid holiday entitlement is 8 to 16days and it is normally taken in full. In the longer term, beyond 2000, some increase inholiday entitlement is expected.


There are 13 public holidays. There are no plans for any increase in public holidays.

1 January New Year’s Day 6 June Pertuan Agong’s BirthdayChinese New Year 2 days 5 July Prophet Mohamad’s BirthdayHari Raya Puasa 2 days 31 August National Day

April Awal Muharram October Deepavali1 May Labour Day 25 December Christmas DayMay Wesak Day


January/February 1 weekMay 1 weekSeptember 3 weeksNovember/January 7 weeks

There are no plans to change school holidays.

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4.5.3 Retirement

4.5.3.1 Overview

There are only retirement age provisions for government employees. These are containedin the Employment Act 1955.


The official and actual ages for retirement of government employees are 55 for men and50 for women. The pension is 50% of final salary.


Early retirement is discouraged.


There are moves to reduce the public expenditure cost of retirement provision byencouraging private provision of support in old age.



Outbound tourism from Malaysia increased from 1.4 million trips in 1985 to 3.6 milliontrips in 1997. 90% was intra-regional travel within East Asia and the Pacific. Inter-regional trips grew at a faster rate over the decade and the major destination regions wereEurope, followed by the Americas then South Asia. The leading ten destinations forMalaysian tourists in 1996 are summarised in the table below.

Country Arrivals 000s Country Arrivals 000sThailand 1,056 Hong Kong 264Brunei 720 Australia 134Singapore 701 UK 131Indonesia 393 USA 79China 298 Taiwan 56

Source: WTO


Direct employment in the tourism sector was estimated to be 135,000 in 1996.


The views of the Malaysian Association of Tours and Travel Agents are set out below.

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4.5.5.1 Socio Economic

• there may be an increase in working hours throughout the period;

• there may be an increase in public holidays;

• willingness to take full holiday entitlement may increase;

• no increase in paid holiday is likely;

• retirement age and income are not expected to change;

• no change is expected in school holidays;

• there may be some increase in expenditure on main holidays, especially later in thelonger term.


• there may be some increase in demand for self catering and aparthotels, no change inhotel demand, and a decrease in second home demand;


• earlier in the period there may be some increase in demand among the young forlearning, trekking, and theme parks. Increased demand for health related holidays isexpected from families, the young, those holidaying independently and the retired;

• later in the period growth is expected among the young for self drive touring, cultural,city touring and special interest holidays; among families for trekking, cultural holidaysand theme parks; among those holidaying independently for walking, learning and citytouring holidays. City touring is also expected to attract strong demand from theretired, together with walking;

• some decline in demand is expected among families for self drive touring, city touring,beaches and cruises; among the retired a decline is expected in demand for cruises, golf,learning, special interest and self drive touring.


The regional economic crisis, and in particular Malaysia’s devaluation and policy ofimposing currency controls, is the most important factor shaping Malaysian tourism andleisure. The controls impose tight restrictions on the amount of money travellers can takeout of the country.

In recent years the Malaysian outbound tourism market grew strongly, whilst domesticholiday opportunities were neglected. The government has sought a stronger domesticholiday market, less peaked to the traditional holidays and the present economicdifficulties may facilitate this. Against this background the recovery of outbound travel islikely to be slow and hesitant.

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4.6 SINGAPORE

4.6.1 Key Facts


* 1996Statutory Leave 7 days plus 1 day per year of service up to 14 daysPublic Holidays 11 daysRetirement Age 62

1994 1995 1996 1997Unemployment % 2.0 2.0 2.0 3.0



Working Week 44 hours per weekSources: World Bank, ILO, Singapore Tourism Promotion Board


4.6.2.1 Overview

Working hours are determined by collective agreements and individual contracts withinlimits established by law.

4.6.2.2 Trends

The Singapore Tourism Board expects the number of days worked per week to decreaseover the period to 2005.


Law: 44 hours per week.

Practice: 47 hours per week was usually worked between 1994 and 1996.

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Law: seven days plus one per year of service up to 14 days.

Practice: typically fourteen days or less, with no change expected before 2005.


There are 11 public holidays per year.

1 January New Year's Day 1 May Labour DayChinese New Year 2 days Vesak DayHari Raya Puasa 9 August National DayGood Friday DeepavaliHari Raya Haji 25 December Christmas Day


School holidays are outlined in the following table. In addition there are four one dayholidays.

March 5 daysJune 20 daysSeptember 5 daysDecember 25 days

4.6.3 Retirement

4.6.3.1 Overview

The Central Provident Fund is an individual compulsory savings scheme whichemployees can draw on after the age of 55.


The official and actual age for retirement is 62 and is expected to rise over the years to2005.


There are no provisions for early retirement

4.6.3.6 Employer and Trade Union Views on Leisure Time Trends

The views of the National Trades Union Congress were as follows:

• Although 35% of employees work a five day week, over 40% work 5 and a half or sixdays per week. Annual leave of at least 15 days is enjoyed by 32% of the population,

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• reflecting the shift of employment towards more highly skilled jobs. However, theintensity of regional economic competition makes it likely that working hours willincrease;

• the number of outbound departures by Singapore residents more than doubled between1991 and 1996. This trend was expected to continue subject to the strength of theeconomy and the strength of the Singapore dollar against other currencies in the region.

• in response to a rapidly rising population, the retirement age has been raised from 60 to62. The long term aim is to achieve a retirement age of 67. Although this might resultin less leisure travel, it may fuel more tourism among the retired by increasing incomelevels.


Outbound tourism from Singapore has increased from 2.9 million trips in 1985 to 7.2million trips in 1997. 95% were intra-regional trips to destinations within the East Asiaand Pacific region, although inter-regional trips increased at more than two and a halftimes the rate of intra-regional between 1985 and 1997. The Americas (2.4% of trips) andEurope (1.8%) were the major inter-regional destination regions. The leading tendestinations for Singaporean tourists in 1996 are summarised in the following table.

Country Arrivals 000s Country Arrivals 000sMalaysia 4,158 Australia 223Indonesia 1,300 USA 113Thailand 437 Taiwan 78Hong Kong 350 Japan 51China 286 Philippines 44

Source: WTO


The National Association of Singapore Travel Agents views are summarised in thefollowing subsection.


• weekly working hours may increase;

• the age of retirement is expected to rise, with a possible fall in retirement income;

• the length of the school week may increase;

• real expenditure on main holidays may rise particularly later in the period to 2005.


• short haul travel is expected to increase throughout the period with a lesser increase inlong haul travel;

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• main holidays and, especially, short breaks are expected to grow, particularly towardsthe end of the period, with some increase in the frequency of holidays;

• package holidays are expected to decline, particularly towards the end of the period,with corresponding growth of independently organised travel;

• accommodation demand is expected to grow for hotels, particularly for apartotels.There will be some growth in second homes.


In the period to 2000:

• demand from young people will be strong for beach, winter sun, skiing, diving andtrekking holidays and for self drive touring. Multi-city touring is expected to decline;

• the pattern will be similar for young couples and for families. In addition, youngcouples and families will favour cruising, with families also favouring theme parks;

• independent family members will be particularly interested in winter sun, activity andculturally based holidays;

• the retired will be particularly interested in cruises, pilgrimages and golf.

In the period to 2005:

• the pattern will be similar, with the strongest growth among the young and youngcouples in activity holidays and continued decline in city touring;

• the family market for activity holidays will also grow strongly, with similar growth fortheme parks;

• beach, cruise, golf, city touring and theme park holidays will have the strongest appealfor the retired.

4.6.5.4 Other Trends

• travel by women will be a strong market segment;

• travel by those with special needs will grow strongly;

• opportunities for virtual reality experiences will further increase travel demand;

• the key to travel growth in the future will be the easing of visa restrictions, especially byChina;

• terrorism will have a negative effect on tourism;

• service quality and value for money will be more important;

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• training of staff will be a key requirement;

• information technology will guide the fate of distribution and travel agents will have adifferent profile in the future.


Information collection was completed before the seriousness of the Asian economicdifficulties became evident. The majority of Singaporeans continue to work a five and ahalf day week and the Trade Union Congress and National Association of Travel Agentsbelieve that working hours may increase. Statutory paid holiday is from seven to 14 days,depending on length of service. The retirement age of 62 is set to rise to 67 in the longterm.

Singapore is a small island state, which provides many regional hub services, includingtravel and tourism links. Singapore has suffered a sharp slowdown in economic growthand increasing unemployment as a result of the Asian crisis. Response to the regionaldifficulties has included efforts to encourage businesses to raise productivity and cut costs.Singapore Airlines has steeply reduced many fares and reduced frequency and capacity onmany routes. Economic developments in Indonesia and Malaysia will be particularlyimportant for Singapore. No early economic upswing is expected and there is likely to bea significant weakening in outbound tourism, perhaps relieved slightly by the comparativestrength within the region of the Singaporean dollar. The strong growth in outbound travelof recent years was driven by economic growth. Future growth is expected towards theend of the period to 2005 and principally in short breaks.

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SECTION 5

EUROPE, AFRICA AND THE MIDDLE EAST

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SECTION 5 EUROPE

5.1 AUSTRIA

5.1.1 Key Facts

1997 2010 ProjectionPopulation millions 8 8% of Population over 60 *19 23Labour Force millions *4 4GDP per head US$ ppp 21,400 n/a

* 1996Statutory Leave 30 daysPublic Holidays 13 daysRetirement Age Men 65 Women 60

1994 1995 1996 1997Unemployment % 3.9 3.8 4.1 4.4



Working Week 40 hours per weekSources: World Bank, ILO, Austrian Federal Ministry of Economic Affairs, SedgwickNoble Lowndes


5.1.2.1 Overview

Hours of work are regulated by law, to protect employees against excessive workinghours and to ensure adequate leisure time. Within the legal framework, hours of work aredetermined by collective agreement and individual contract.


Law: the working day is eight hours and the working week is 40 hours, but there areprovisions for flexibility in applying these requirements.

Practice: between 1994 and 1996 the average hours worked per week were 34. Between2000 and 2005 a decrease in working hours is expected.

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Statutory paid annual leave is five weeks, rising to six weeks after 25 years service.Holiday taking is arranged by agreement between employer and employees. Collectiveagreements usually provide for one extra months holiday pay. There is no right to sellunused holiday for pay.


There are 13 public holidays and no plans for change.

1 January New Year's Day 15 August Assumption Day6 January Epiphany 26 October National Holiday

Easter Monday 1 November All Saint's Day1 May National Holiday 8 December Immaculate

ConceptionAscension Day 25 December Christmas DayWhit Monday 26 December Boxing DayCorpus Christi


Christmas: December / January 2 weeksEaster 1 weekWhitsun 1 weekSummer Holiday: June to early September 10 weeksAll Saints holiday - 1 and 2 November 2 days

School summer holidays are staggered by week by Austrian provincial governments. Nochanges are anticipated in the pattern of school holidays.

5.1.3 Retirement

5.1.3.1 Overview

A comprehensive social security system, built on centralised collective agreementsprovides good pension benefits. In 1998, qualification for early retirement was mademore difficult and the retirement age is to be gradually equalised to the higher age for menby 2034. No increase is expected in the real disposable income of pensioners by 2000 butan increase is expected by 2005.


The social security pension is payable from age 65 for men and 60 for women. Theaverage actual retirement ages are 58 for men and 56 for women.

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Early retirement is being discouraged. The minimum contribution period has beenincreased to 37.5 years.


The normal pension is payable subject to 15 years contributions. Based on nationalaverage earnings, net pensioner income is 85% of net earnings.


Only 10% of employees are members of employer's voluntary retirement plans. These aremainly higher paid employees and the pension target of plans, inclusive of social security,is 60% to 75 % of final earnings for a full career.

5.1.4 Trade Union Views on Leisure Time Trends

The views of the Osterreichischer Gewerkschaftsbund are as follows:

• most collective agreements now provide for a 37.5 or 38 hour working week.Reducing this is no longer an objective, especially with the increase in part-time workwhich provides lower incomes;

• employers are tending to employ people for shorter hours, in some cases on a basiswhich falls outside the national insurance requirements;

• some of the problems of under employment have been shifted to the social securitypension system;

• trade unions recognise that falling numbers of jobs, and reduced working time, lead tosocial problems and have therefore reduced their activity on work time reduction.However, employers are seen to be anxious to reduce their labour costs as far aspossible and there is a danger of increasing numbers of part time workers andunemployed who do not have the means to use their free time. A shortage of jobs forthe young also contributes to the growth of free time. This has been happening at atime of worsening economic circumstances for many people.



Outbound tourism from Austria increased from 4.8 million trips in 1985 to 12.8 milliontrips in 1997. Intra-regional trips within Europe accounted for 94% of all trips, despitethis, inter-regional trips having increased at a faster rate. Major inter-regional destinationswere the Americas (2.4% of trips), East Asia and the Pacific (1.6%) and Africa (1.5%).The average spend per trip in 1997 was US$790. It estimated that over 75% of outboundtourist trips are leisure related. The leading ten destinations for Austrian tourists in 1996are summarised in the table below.

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Country Arrivals 000s Country Arrivals 000sCzech Rep 4,998 France 438Hungary 2,291 Poland 389Italy 1,618 Greece 360Germany 632 Croatia 342Spain 438 UK 262

Source: WTO


Austrian domestic tourism demand has increased from 5.3 million trips in 1980 to 7million trips in 1996 and is predicted to grow to 8.1 million trips by 2005. Average spendper trip has fluctuated, with an overall increase from US$250 in 1980 to US$423 in 1996,and a peak of US$448 in 1995. It is expected to rise to US$550 by 2005. Average lengthof stay per trip has declined from 5.4 days in 1980 to 4.1 days in 1996. A marginaldecline to 4 days per trip is expected by 2005.


Tourism was estimated to support 250,000 jobs, of which 184,000 were directemployment, in 1996.


The views of the Association of Austrian Travel Agents and Tour Operators are asfollows:


• no change in working time or in paid holiday is expected in the next few years butsome reduction in retirement income is expected, together with a rise in the age ofretirement;

• no increase in expenditure on holidays is expected before 2000. After that there maybe some fall in expenditure on additional holidays.

5.1.6.2 Travel, Length of Holiday, and Accommodation

• long haul and domestic travel are expected to remain at present levels, with a decreasein short haul travel. No change is expected in main holidays, but some reduction inshort breaks and additional holidays is expected;

• all inclusive holidays are expected to grow;

• an increase in self-catering is expected.

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• demand by young people for beach, winter sun, diving, trekking and special interestbreaks is expected to increase. Young couples will increase demand for beach, wintersun, touring and cultural holidays, with less interest in cruising and golf;

• family interest in beach, self drive touring and theme parks will grow. Familymembers taking holidays independently will increase demand for particular sportingand cultural holidays;

• among the retired, there will be increased demand for cruises, walking, coach touring,cultural and health breaks.


No increase in leisure time is expected in terms of shorter working hours, except amongthe under employed or unemployed. The trade unions are not pressing for shorterworking hours or longer paid holiday. Their concern is more with maintaining goodquality, full time jobs.

Austrians have generous holiday entitlements and no trend towards shorter, more frequentholidays is expected by the travel trade. Conversely, some decrease in additional holidaysand in short breaks is anticipated. A clear trend towards more active and culturallyoriented holidays is evident.

A 1997 government initiative to reduce pension benefits was strongly resisted by the tradeunions and agreement was reached on a basis that yields significantly lower savings thanthe government wished.

5.2 FRANCE

5.2.1 Key Facts


• 1996Statutory Leave 25 daysPublic Holidays 11 daysRetirement Age 60

1994 1995 1996 1997Unemployment % 12.3 11.6 12.3 12.4

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1980 1996Service Imports US$ millions 32,148 72,087Travel as % of Total Service Imports 18.7 24.3Value of Travel Imports US$ millions 6,012 17,517Working Week 39 hours per week

Sources: World Bank, ILO, and Sedgwick Noble Lowndes


5.2.2.1 Overview

Working time is extensively regulated by the provisions of the consolidated Labour Code.

5.2.2.2 Trends

In 1982, the Government introduced a statutory 39 hour working week and increasedstatutory paid annual leave from four to five weeks. These policies were designed to saveor create jobs by reducing working time during a recession, although the impact of themeasures on the unemployment figures proved difficult to establish.

In recent years measures have been introduced to allow new flexibilities in arrangingworking time, particularly to cope with peak periods of demand by scheduling less thannormal working hours during periods of slack demand.

The Government has encouraged the reduction of working time as a means of sharingwork between those employed and the unemployed. Examples include reducing socialsecurity contributions where firms reduce the working week and take on more workers,providing financial incentives for taking on part time employees and reducing workingtime in the public sector in order to maintain or increase employment. Financialincentives are provided for early retirement of workers without significant loss of benefit.

During the 1990s a significant number of private enterprises have reduced working timein order to reduce job losses, sometimes with linked salary reductions.

In February 1998, the National Assembly adopted a controversial law to reduce theworking week to 35 hours, without reduction in wages, from the year 2000. The intentionis to create a more humane working environment and increase employment. Employerswill benefit from a sliding scale of social security charge reductions depending how manyjobs are created. The new law has been strongly opposed by French employers, whobelieve it is more likely to increase costs and reduce employment. Detailed provisions,such as averaging hours over the year, flexibility and overtime pay, were left uncertainpending further legislation. However, there are indications that one effect of the newprovisions may be to increase the flexibility of the work force.

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In July 1998 a Louis Harris poll showed that given the choice between working more andearning more, or working less and earning less, 45% of French respondents prefer to workless and earn less, compared with 38% who want to work more for more pay.


Law: the statutory working week is 39 hours per week and cannot exceed ten hours perday. However, averaging schemes over eight to twelve weeks allow normal hours toexceed 39 without payment of overtime if they are balanced by shorter hours in otherweeks. Previously the law gave financial incentives to encourage employers to reduceworking hours to 34 per week, to create employment.

Practice: normal hours of work vary between 35 to 39 hours per week.


Law: by law there is a minimum of five weeks of paid annual leave, with an additionalday if at least one week is taken outside the summer period (1 May to 31 October). Theperiods for using paid annual leave are normally fixed by collective agreement and mustinclude the summer period.

Practice: paid annual leave varies between five and six weeks. Paid annual leave may beincreased over the statutory minimum of five weeks because of seniority, age or bynegotiation. Some collective agreements provide for a holiday pay bonus.


There are 11 public holidays per year. It is customary if a public holiday falls two daysbefore or after a weekend to award the bridging day as a holiday, or if the holiday falls atthe weekend to award an extra day in lieu.

1 January New Year's Day 14 July Bastille DayEaster Monday 15 August Assumption Day

1 May Labour Day 1 November All Saints Day8 May Victory Day 1945 11 November Armistice Day 1918

Ascension 25 December Christmas DayWhit Monday


Christmas: December to January 2 weeksFebruary 1 weekEaster 2 weeksSummer: July to August 8 weeksAutumn 1 week

School holidays are staggered by dividing the country into three zones, with varying datesfor the winter and spring holidays, designed to reduce travel congestion.

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5.2.3 Retirement

5.2.3.1 Overview

A generous social security system is based upon compulsory, collectively agreedretirement plans. Recently high levels of unemployment, together with demographicpressures, have forced the government to cut back social security retirement benefits andincrease contributions. Compulsory supplementary retirement plans have also beenintroduced to increase contributions and reduce benefits.


The full social security pension is payable from age 60 at the earliest, subject to 38.5 yearscontributions. This is to be increased to 40 years contributions by 2003. Otherwise amodified pension is payable, depending on age at retirement.


Early retirement is possible from age 60, subject to reduction for any shortfall incontributions. Other provisions cover cases where the employer agrees to hire areplacement.

5.2.3.4 Value of Social Security Pension

The full pension is equal to 50% of assessable earnings. There are compulsoryarrangements whereby all businesses operating in France are required to participate in anindustry pension plan, to which employers and employees contribute.


Recent cutbacks in the prospective social security pension and the financial pressure onthe compulsory industry systems have gradually eroded pension expectations. Projectionsindicate that the average aggregate pension, inclusive of the social security pension, for aforty year working career will be 40% to 45 % of final earnings for management levelstaff. Some years ago the expectation might have been of an aggregate pension in theregion of 70%. A 1997 law on private pension funds encourages the establishment ofretirement funds by employers for their employees.

5.2.4 Trade Union Views on Leisure Time Trends

The Confederation Francaise Democratique du Travail advises that the available statistics,which cover stays exceeding four nights and do not distinguish business-related travelfrom travel for other purposes, do not give a clear picture. In the absence of informationon the reasons why people do not take holidays, the CFDT find it impossible to formulatea leisure time policy.

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Outbound tourism from France increased from 14.3 million trips in 1985 to 22.3 milliontrips in 1997. 72% of outbound trips were within Europe. The other leading destinationregions were the Americas (11% of trips) and Africa (9% of trips). Inter-regional tripsincreased at over three times the rate of intra-regional trips from 1985 to 1997, when theyaccounted for 28% of all trips. The leading ten destinations for French outbound touristsin 1996 are summarised in the table below.

Country Arrivals 000s Country Arrivals 000sUK 3,705 Belgium 760Spain 3,357 Tunisia 542Italy 2,296 Morocco 500USA 987 Canada 461Germany 787 Martinique 380

Source: WTO


The Syndicat National des Agents de Voyages is not aware of any study having beenundertaken to analyse changes in leisure time and their effects on the tourism market. TheSyndicat’s overall view is that French outbound tourism is growing and that French policyis to increase leisure time. To its knowledge, no analysis is available of the relationshipbetween these factors.


France and was ranked 6th in the world with 4.4% of global outbound tourism expenditurein 1997. However, this understates the importance of France as a tourism generatorbecause of the strength of domestic tourism.

Government initiatives have encouraged the reduction of working time through the sharingof work between the employed and unemployed, increasing the numbers of people retiringearly and reducing the length of the working week.

The French have generous holiday entitlements and implementation of the 35 hourworking week in 2000 may increase the amount of leisure time available for holidays.However, continuing anxiety about the level of unemployment, and changes in pensionprovision, suggest that any growth in holiday taking will be modest.

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5.3 GERMANY

5.3.1 Key Facts


* 1996Statutory Leave 24 daysPublic Holidays 9 to 13 daysRetirement Age 65

1994 1995 1996 1997Unemployment % 8.4 8.2 9.0 12.0



Working Week 40 hours per weekSources: World Bank, ILO, German National Tourist Board, and Sedgwick NobleLowndes*GDP in 1996 adjusted for PPP


5.3.2.1 Overview

Traditionally harmonious industrial relations have been built on a sophisticated system ofcollective bargaining and strong co-determination through board representation and workscouncils. Working hours, holidays and other conditions of employment are settled incollective agreements which, once signed, have the force of law.

5.3.2.2 Trends

Unemployment has risen to record levels and the social security budget is under severecost pressures. This has stimulated debate over aspects of the German social-marketmodel, including social welfare costs.

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Law: the statutory maximum working week is 40 hours

Practice: the average working week is 37 hours in the western Lander and 39 hours inthe eastern Lander.


Law: the statutory entitlement is 24 working days.

Practice: the average annual paid leave is six weeks, with at least five weeks beingalmost universal. Collective or works agreements detail the timing of holidays. Mostemployees are entitled to some form of additional holiday pay. Any right to cash inholidays for pay depends on collective agreement.


There are 9 to 13 public holidays depending on the region

1 January New Year Whit Monday6 January Epiphany 23 June Corpus Christi

Good Friday 3 October German Unity DayEaster Monday 1 November All Saints

1 May May Holiday 16 November Repentance DayAscension Day 24 & 25 December Christmas


School holidays are the responsibility of the 16 federal states of Germany and vary ineach state. To avoid traffic jams, especially in the summer holiday season, but also forsome other school holidays, there is a rotation system among the states governing thebeginning and end of school holidays. School holidays are broadly as follows:

December and January 10 daysFebruary 10 daysEaster 15 daysWhitsun 5 daysSummer 30 days

5.3.3 Retirement

5.3.3.1 Overview

Employees are covered by a comprehensive and generous social security system which isfrequently supplemented by employer sponsored plans. Contribution rates for retirementpensions have recently been increased and a new formula for pension calculation mayresult in lower pensions. The social security system remains under severe cost pressure.

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The social security pension is payable from age 65.


Subject to 35 years insurance contributions, early retirement is available from age 62,subject to proportionate reduction. Previously early retirement had been available fromage 63 without reduction.


The full pension is normally between 40% and 45% of final earnings.


Until recently, a customary level of retirement pension including private plans suitablyintegrated with a social security pension, was in the range 60% to 70% of final averageearnings. Most private pension plans were wholly financed by employers. More recently,in the midst of rising labour costs, employers have sought to trim their pension plans andto encourage employees to share the cost through deferred salary arrangements.


Many German employers have long been concerned at the high level of non-wageemployment costs. Industrialist Josef Gerstner commented in July 1998 that "Markets aremoving away from Germany, away from Europe. And Germany has problems, highsalaries, long vacation times, which means companies like mine that want to grow go toother countries". .A chemical industry study in 1996 showed that non-wage employmentcosts, including holidays and pensions, were an additional 98% of actual wage costs.Former Chancellor, Helmut Kohl, also expressed anxiety at high labour costs in Germany.

The views of the trade union confederation, DGB Bundesvorstand, are as follows:

• it fully supports shortening working hours as a means of achieving the three goals itstrives for: creating jobs, making work more humane and adapting work to society;

• the old standards for employment designed for full time male employment are breaking

down. Standards of social protection are now needed to meet the needs of combiningfamily and job. Flexibility in working hours is needed so that individuals can varyworking times according to circumstances. Work schedules should be designed moreflexibly, so that individual needs can be met;

• more time, shorter working hours and adequate annual leave, is needed for genuine

leisure. Too little free time makes people ill. Work must be adapted to the wishes ofthe family, not the reverse. The steady increase in productivity ought to lead toimprovements in working and living conditions for the people.

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Outbound tourism from Germany increased from 44 million trips in 1985 to 68 milliontrips in 1997, with declines in the early 1990s and 1997. Inter-regional trips increased atfour times the rate of intra-regional trips, but 89% of all trips were to Europeandestinations in 1997. The other major destination regions were the Americas (5.1% oftrips), Africa (2.4%), and East Asia and the Pacific (2.4% of trips). It is estimated thatleisure related demand accounted for 86% of trips, compared with 9% business relatedand 4% VFR. The leading ten destinations for German tourists in 1996 are summarised inthe table below.

Country Arrivals 000s Country Arrivals 000sFrance 13,378 USA 1,997Spain 10,028 Tunisia 808Austria 9,877 Canada 454Italy 8,463 Egypt 437Poland 6,660 Thailand 354

Source: WTO


German domestic tourism has fluctuated in the 1990s, ranging from 90 million trips in1990 and 1996 to a peak of 118 million trips in 1991. It is estimated that 51% of domestictrips were leisure related, 24% business related and 24% VFR.


Tourism was estimated to support a total workforce of 2.4 million in 1994.


The views of Deutscher Reisebüro Verband are as follows:

5.3.5.1 Socio Economic factors

• there may be some reduction in working hours over the period, but any increase inholidays would only be towards 2005;

• willingness to take full holiday entitlement may decrease, particularly in the short term;

• the retirement age may rise after 2000 and a fall in retirement income is possible; • real expenditure on holidays is expected to decrease, particularly on additional

holidays.

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5.3.5.2 Travel, Length and Type of Holiday, and Accommodation • any increase in travel is likely to be long haul, with a possible fall in domestic tourism; • main holidays are not expected to change, but additional holidays may decrease. • some decrease in frequency of holidays may result in the short term; • tailored and all inclusive holidays are expected to increase; • there may be an increase in self-catering, rather than hotel, accommodation demand in

the short term.


• among the young, winter sun and a wide variety of activity, cultural, special interestand ecological breaks are expected to grow, together with trips to theme parks. Theremay be a decrease in walking, skiing and coach touring holidays;

• a similar pattern is expected among young couples and families; • independent family members are expected to increase demand for sport, event related,

special interest and theme park trips; • among the retired, growth is expected in event and health related trips; • beach holiday demand is expected to remain static or decline, particularly among the

young and the retired.


The Germans enjoy generous holiday entitlements but no increase in holidays is expectedby the travel trade, which envisages a possible fall in additional holidays and in thewillingness to take full holiday entitlements in the short term. There may also be a fall inincomes in the important pensioner market. Nevertheless, the trade unions wish leisuretime to continue to grow and be adapted to family needs, so that increasing productivitycontributes to improving the quality of life of employees.

The continuing debate in Germany on the need for change in the welfare system, ascontributions to the under funded pension scheme rose in 1998 to 21% of labour costs, islikely to reduce confidence in retirement incomes. The need for a more flexible workingweek has also been raised by employers. In September 1997, Jurgen Weber, chairman ofLufthansa, said "It can't be that an employee in Germany has an average eight weeksholidays and works less than forty hours a week. That exists nowhere else in the world".In response, the airline union called for an alliance for jobs and compromise on pay andworking conditions in exchange for job guarantees. The need for wide ranging change,including cuts in the state pension was urged in the 1997 OECD annual report onGermany.

A further factor, consolidation within the German outbound holiday industry, may alsoplay its part in moulding future holiday patterns. The German holiday market is the

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biggest in Europe and consolidation towards a small number of giant, integrated holidaycompanies, breaking down the divide between airline, tour operator, travel agent andhotel, should yield economies of scale and generate increased sophistication of productdesign to respond to changing market demand.

In these circumstances, although leisure time provision is good in Germany, it is unlikelyto increase for the employed, who may find increasing work pressures and may respond tothese by changing their approach to holidays. Equally, the retired may become morecautious about leisure spending.

5.4 ITALY

5.4.1 Key Facts


* 1996Statutory Leave 15 days; 20 from November 1999Public Holidays 12 daysRetirement Age Men 65 Women 60

1994 1995 1996 1997Unemployment % 11.4 11.9 12.0 12.2

1980 to 1990 1990 to 1996 1997Consumer Prices % 9.1 4.8 1.9


Working Week 48 hours per weekSources: World Bank, ILO, Italian State Tourist Board, and Sedgwick Noble Lowndes


5.4.2.1 Overview

A highly regulated labour market is underpinned by comprehensive social securityprovision. Collective agreements play an important part in defining entitlements

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5.4.2.2 Trends

An agreement between the Government and trade unions will reduce working time to 35hours per week. Although the government is committed to this step the employers'organisation, Confindustria, has lobbied against it on the basis that it will exacerbateinflexibility in the labour market and will not increase employment. Free time is expectedto increase as a result of this reduction and because of increasing flexibility in workinghours.


Law: 48 hours per week.

Practice: the average number of hours usually worked per week is 36.


Law: implementation of the European Union Working Time Directive has establishedlegal entitlements.

Practice: 30 days, specified in collective agreements or agreed contractually. Theentitlement may increase with seniority. Larger employers must consult with employeeson an annual leave plan. All leave is normally taken. Some collective agreements give aholiday bonus. Unused leave may not be cashed in and taken as pay.


There are twelve public holidays per year and no changes are expected.

1 January New Year’s Day 15 August Assumption6 January Epiphany 1 November All Saints

Easter Sunday 8 December Immaculate ConceptionEaster Monday 25 & 26 December Christmas

25 April Liberation day Local Saints Days1 May Labour Day


Christmas: December and January 2 weeksEaster 1 weekSummer: June to August 11 weeks

There are moves to end Saturday school and proportionately reduce the summer holiday.

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5.4.3 Retirement

5.4.3.1 Overview

Changes to the social security system have been lowering pension expectations andprogressively delaying the retirement age and increasing contributions.


Pensions are normally payable to men from age 65 and to women from age 60. Theaverage actual retirement age for men and women is now 57.


A full pension may be paid at age 57 to someone not in employment. Undersupplementary provisions applying to managers, early retirement is possible at age 47 (tobe increased gradually), subject to reduced benefit.


The pension is calculated on the basis of assessable earnings, subject to a specifiedcontribution period.


Changes in the social security pension are creating interest in more private provision.

5.4.4 Employer Views On Leisure Time Trends

Confindustria, the representative body of Italian employers, consulted its memberFederation of Tourism, and commented as follows:

• action to reduce unemployment has high priority and the government is legislating toreduce the working week from 40 to 35 hours. Italian holidays are closely linked toschool holidays. The dates are set by the regions, which are being given moreautonomy to decide the organisation of school hours and holidays;

• family holidays are taken between June and August and so are very seasonally peaked.Other holidays are two weeks at Christmas and one week at Easter. There is also whiteweek, mountain holidays at the end of winter, which take place in the school year;

• the summer peaking of holidays is aggravated by manufacturing industry closingfactories in August;

• pension changes are raising the age at which people can retire, and increasing pensioncontributions;

• there is a trend to short but more frequent holidays, with growth in weekend city,cultural, cycling, riding and health trips.

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Outbound tourism from Italy increased from 9.2 million trips in 1985 to 15.4 million tripsin 1997. 79% of trips were to destinations within Europe, followed by the Americas(9.6%), Africa (4.3%) and East Asia and the Pacific (3.3%). Inter-regional trips haveincreased at almost four times the rate of intra-regional destinations since 1985. Theleading ten destinations for Italian tourists in 1996 are summarised in the table below.

Country Arrivals 000s Country Arrivals 000sFrance 5,299 USA 525Spain 2,166 Egypt 366UK 932 Tunisia 270Austria 856 Cuba 192Germany 829 Brazil 119

Source: WTO

The average spend per trip was estimated to be over US$1,000 in 1996 and the averagelength of stay 5 days, up from an average of 3.8 days in 1980. 54% of trips were leisurerelated, 23% business related and 11% VFR. The number of outbound trips is expected todecline to 15.5 million by 2005 and the average length of stay increase to 5.7 days.


Domestic tourism increased from 30 million trips in 1980 to 40 million trips in 1996. Theaverage length of stay was 4.3 days. 48% of trips were leisure related, 32% businessrelated and 10% VFR. Domestic tourism trips are expected to increase to 44 million by2005, with a further small decrease in the average length of stay to 4.2 days.


Tourism is estimated to have supported 1.76 million jobs in 1996, of which 61% wasdirect employment. Total tourism employment is expected to increase to 1.82 million by2005.

5.4.5 Leisure Time and Tourism: Industry Views

The views of the Association of Italian Tour Operators were as follows:


• by 2000 the retirement age is expected to have risen and there may be a decrease inretirement income;

• there may be an increase in expenditure on main holidays and a decrease in workinghours per week;

• by 2005 there is a stronger expectation that the retirement age will have risen andretirement income decreased;

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• it is also expected that the working week will be shorter and that expenditure on mainand additional holidays will rise.


• whilst there may be increases in all forms of travel by 2000 there is greater confidencein a rise after that date, especially to short haul destinations;

• any increase in holidays in the short term is expected to be in extended weekends, withmore confidence in an increase in additional holidays and short breaks as well asextended weekends from 2000;

• an increase in all-inclusive holidays is expected in the years to 2000, with a possiblefall in tailored holidays. Both package and all inclusive holidays are expected to growmore strongly after 2000;

• the fastest growth of accommodation demand is expected to continue to be forbungalow resorts, with more modest growth in hotel demand.


• to 2000 demand from young people and young couples is expected to grow moststrongly for beach holidays, with skiing also strong among the young. Other activitybased holidays will also do well with these groups;

• growth in family demand is expected for beach, cruise, winter sun and skiing;

• growth in demand for beach, cruise, winter sun, health and diving holidays is expectedfrom family members on holiday independently;

• demand from retired people will rise for cruise, winter sun and health based holidays;

• between 2000 and 2005, stronger growth in demand is expected, continuing on thesame lines but with some rise in ecological holidays and theme parks.


Italians enjoy a high level of paid and public holidays, even by European standards.Following enactment into Italian law of the European Community Working TimeDirective, minimum paid holiday entitlements have a statutory basis.

The Italian Tourist Board advises that by 2005 there may be some decrease in paid holidayentitlements and therefore in the number of days holiday taken.

The Association of Italian Tour Operators, while cautious about the prospects to 2000,expects the market to strengthen in the years to 2005. Throughout the period growth ismainly expected in additional holidays, short breaks and extended weekends.

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5.5 NETHERLANDS

5.5.1 Key facts

1997 2010 ProjectionPopulation millions 16 16% of Population over 60 *18 22Labour Force millions 7 7GDP per head US$ 22,000 N/a


1994 1995 1996 1997Unemployment % 7.1 7.0 6.6 6.9



Working Week 48 hours per weekSources: World Bank, ILO, Dutch Tourist Board, and Sedgwick Noble Lowndes


5.5.2.1 Overview

Working hours are determined by statute and collective agreements.

5.5.2.2 Trends

There is a strong trend towards dual income households with a large increase in part timework by women.


Law: statutory hours of work are 48 per week.

Practice: the average number of hours usually worked per week over the years 1993 to1995 was 38.

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Law: the legal entitlement is 20 days. A statutory minimum holiday bonus of 8% ofannual pay is payable. Employees have a right to two consecutive weeks between Mayand October.

Practice: the actual average number of days of paid annual leave is 25, of which anaverage of 24.5 are taken. Holiday arrangements are settled by collective agreement or bythe employer in consultation. Some employers allow senior staff to cash in entitlementsfor pay. Employees cannot be forced to cash in untaken holiday entitlement. The tradeunions want the right to cash in the five days holiday, in excess of the statutoryentitlement in most collective agreements.


There are eight public holidays -

1 January New Year's Day Easter MondayGood Friday Whit Monday

End of April Queens Birthday 25 & 26 December ChristmasAscension Day


Spring Holidays: February / March 5 daysMay Holiday: April / May 5 daysSummer Holidays: July & August 30 daysAutumn Holiday: October 5 daysChristmas Holiday: December / January 10 days

5.5.3 Retirement

5.5.3.1 Overview

Conditions of employment are set by collective agreements. Social security provides onlyrelatively modest flat rate retirement pensions but industry wide or company pensionsadequately supplement these.


The social security pension has a normal retirement age of 65. Most employees arecovered also by company provisions integrated with the social security pension.


The average age of retirement for men is 62.5 and for women 61. An increase in theactual retirement age is expected by 2000 and early retirement is being discouraged.

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Net pension income, based on national average earnings, is 70% of net earnings. Nochange in the comparative real disposable income of pensioners is foreseen.



Outbound tourism from the Netherlands increased from 13 million trips in 1985 to 16million trips in 1997, significantly below the 22 million trips in 1996. Despite inter-regional travel increasing at more than ten times the rate of intra-regional trips, over 88%of trips were to destinations in Europe in 1997. Europe was followed by the Americas(6.3% of trips), East Asia and the Pacific (3.2%) and Africa (1.4%). The leading tendestinations for Dutch tourists in 1996 are summarised in the table below.

Country Arrivals 000s Country Arrivals 000sFrance 8,115 USA 440Spain 2,340 Indonesia 122Germany 2,332 Canada 117UK 1,541 Venezuela 81Belgium 1,423 Tunisia 72

Source: WTO

In 1996, the average duration of trip was 11.8 days, down from 12.7 days in 1990.Leisure related tourism trips are expected to increase to 13.5 million by 2005, with afurther decline in the average length of stay to 11.5 days.


Dutch domestic leisure tourism has increased from 14.6 million trips in 1990 to 17.0million trips in 1996. The average length of stay reduced from 6.9 days to 6.6 days overthe same period. The number of trips is expected to increase to 18.5 million by 2005.


Tourism was estimated to support 213,000 jobs, of which 75% was direct employment, in1995. Total tourism related employment is projected to increase to 239,000 by 2005.


The views of the Netherlands Association of Tour Operators were as follows:

• some reduction in working hours is foreseen, at least by 2005, together with anincrease in paid holidays;

• the retirement age is expected to rise, but with no rise in retirement income before

2005;

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• no significant rise in holiday expenditure is likely in the short term, but there is moreconfidence of increased spending on additional than on main holidays;

• long haul travel is expected to increase more rapidly than short haul or domestic travel; • the length of main holidays is expected to decrease; • the frequency of holidays is expected to increase throughout the period; • some growth is expected in package holidays and more in tailored holidays towards the

end of the period; • demand for self-catering, apartotel and second home accommodation is expected to

grow rather than hotels, which may perform better later in the period.


The Dutch have generous holiday provisions, but there are indications that only 30% ofholiday entitlements are actually spent on taking holidays away from home. Increases inself-employment and more flexible work regimes may be among the factors which areleading to shorter holidays and also to discussion in the Netherlands on whether they havetoo much holiday. The trade unions support the right for employees to cash in the fivedays holiday over the legal minimum of 20 days. Against this background there isunlikely to be any increase in paid holiday leave in the Netherlands in the near future.

5.6 SWEDEN

5.6.1 Key Facts

1997 2010 ProjectionPopulation millions 9 9% of Population over 60 *22 26Labour Force millions 5 5GDP per head US$ 19,700 n/a

* 1996Statutory Leave 25 daysPublic Holidays 11 daysRetirement Age 65 for men; 62 for women

1994 1995 1996 1997Unemployment % 9.8 9.2 10.0 6.6


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Working Week 40 hours per weekSources: World Bank, ILO, Swedish Tourist Authority, and Sedgwick Noble Lowndes


5.6.2.1 Overview

Sweden has a 40 hour working week. The Hours of Work Act 1983 governs workingtime issues, and can be modified by collective agreements. Collective agreements in themajor sectors provide for a five day working week.

5.6.2.2 Trends

Flexibility, in terms of individual choice of working time, is especially pronounced.Traditionally paid annual leave was scheduled for July but now trade union resistance tokeeping production lines running for at least two weeks in July has reduced. There hasbeen concern in Sweden that actual hours of work have been significantly lower than inmany European countries due to various forms of special leave and absenteeism. As aresult there has been an effort to increase actual annual working hours. The extension ofdifferent forms of leave has stopped and in some cases leave has been reduced and sickleave provisions tightened.


Law: normal weekly working hours are 40, after which overtime must be paid.

Practice: normal weekly working time, pursuant to collective agreements, variesbetween 35 and 40 hours.


Law: statutory annual leave is a minimum of 25 days and employees are entitled toholiday pay equal to about 13% of the previous year’s earnings. All paid annual leave inexcess of 20 days can be carried forward over a maximum of five years in order to allowthe employee the chance to take a longer period of paid annual leave at a later time.Employees are entitled to four consecutive weeks leave over June to August, unlessotherwise agreed. Employers must consult with employees over holiday arrangements.Leave may not be cashed in for pay.

Practice: paid annual leave tends to be between 25 and 30 days per year.

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There is no law regulating public holidays. Swedish employees typically receive 11 paidpublic holidays given in the following table. Many employees are allowed to "bridge"public holidays falling on a weekday, such as Tuesday or Thursday, with the working day,which falls on the Monday or Friday, to create a four day weekend. Arrangements aremade to add extra working time each day over a certain period to compensate for the timeoff on the "bridged" weekend.

1 January New Years Day Ascension Day6 January Twelfth Day Whit Monday

Good Friday 21 June Mid Summer EveEaster Monday 1 November All Saints Day

1 May Labour Day 25 & 26 December Christmas


Summer: June to August 8 weeksChristmas: December / January 2 weeksSport Vacation Week: February 1 weekEaster: March / April 1 weekAutumn: October 1 week

5.6.3 Retirement

5.6.3.1 Overview

A comprehensive system of state benefits, supplemented by universal collectively agreedemployee benefit plans, is proving expensive in the changed circumstances of theSwedish economy. Employees, who until recently made no contributions, are nowcontributing up to 5% of earnings to social security provision. The state pension schemeis to be overhauled to make it more affordable.


Retirement pension is payable from retirement age.


Available from age 60, subject to a proportionately reduced payment.


The social security pension is equivalent to approximately 65% of national averageearnings. Employers must provide benefits on a non-contributory basis for all employees.These are closely integrated with the social security pension. The maximum level isattained after 30 years.

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Voluntary pension plans are limited to smaller employers not covered by collectiveagreements.

5.6.3.6 Trade Union Views on Leisure Time Trends

Swedish Trade Union Confederation’s views were as follows:

• Sweden has continuing problems of unemployment and of people working part timewho would like to work a full 40 hour week. For some people there is heavy overtimedue to staff reductions and reluctance to take on new employees;

• for reasons of health and equality of men and women in relation to domesticresponsibilities, shorter working hours are looked for in the longer term;

• there is interest in more flexible working hours, including a possible "free time bank"enabling workers to take accumulated free time when and how they wish, even usingpaid vacation time to shorten the working day for a period;

• pensioners have survived the recession without great losses. They are strongconsumers in the leisure sector. The Swedish population is ageing, following a highbirth rate in the 1940s and a low one in the 1960s. This makes pensions an importantissue in all employment negotiations. It also means pensioners will continue to beimportant leisure consumers even in the long term. However, early retirement,although pressed on some people, has become more difficult because of the level ofpensions available;

• in negotiations with employers, leisure time is an aspect of the flexibility of the workforce. Employers want complete flexibility, while the unions want co-determinationand a better quality of life for their members;

• looking to the future, some groups in Sweden want more leisure and family time andwould like to see economic growth enable reductions in working hours, and greater andbetter distributed free time. Others, as the recession comes to an end, want full timejobs and more overtime to regain income levels lost in the recession.

Swedish Confederation of Professional Employees views were as follows:

• the Confederation urged that the legislation to implement the EU Working TimeDirective in Sweden should provide increased flexibility in the organisation of workinghours, so as to meet the needs of customers more effectively whilst reducing totalworking hours.

• the Confederation argues that shorter working hours lead to greater equality betweenmen and women, and provide more time for family and social life. Greater flexibilityin structuring working hours would reduce costs by reducing the need to pay over timepremiums, because working hours would reflect peaks and troughs in activity.Together with reduced working hours, this should lead to an increase in employment.

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Outbound tourism from Sweden increased from 4.3 million in 1985 to 6.2 million in1997. However, this was below the peak of 7.3 million tourist trips in 1992. In 1997,87% of trips were to destinations in Europe. This was followed by the Americas (6.4% oftrips), East Asia and the Pacific (4.6% of trips) and Africa (1.4%). Inter-regionaldestinations have increased by over four times the rate of intra-regional trips since 1985.It is estimated that approximately 60% of all outbound trips from Sweden are leisurerelated, over 20% business related and over 15% VFR. The average length of stay per triphas fluctuated and is estimated to have increased from 5.9 days in 1990 to 6.9 days in1996. The leading ten destinations for Swedish tourists in 1995 are summarised in thefollowing table.

Country Arrivals 000s Country Arrivals 000sFrance 876 Denmark 356UK 560 Norway 322Spain 737 Italy 260Germany 588 USA 219Greece 459 Poland 198Source: WTO


Swedish domestic tourism trips fluctuated between 1990 and 1996, peaking at 75.4million trips in 1990 and declining to 66.3 million trips in 1996. The motivation fordomestic trips is similar to that for international trips, with approximately 70% leisurerelated.


In 1995, tourism was estimated to support a total of over 139,000 jobs.


There is unlikely, in the short term, to be any increase in the generous Swedish paid leaveprovisions. These include arrangements to enable leave to be accumulated, so that morelengthy holidays can be taken, and to enable public holidays to be linked to weekends forlonger breaks. The main trade union interest is in establishing more flexible workinghours arrangements which, as well as improving industrial efficiency, also respond tofamily and social needs by giving individuals an element of control over their entitlementsto leisure time. There is interest in establishing “free time banks” in which individualscan accumulate leave and then use it as required; for example, using holiday leave toshorten the working week for a period. These priorities suggest that there is more interestin greater leisure time in the working week and for family arrangements than for moreholidays.

At the political level Sweden continues to try to reconcile its welfare traditions with theburden of an ageing population, the fiscal constraints of EU membership and thecompetitive demands of the global economy.

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5.7 SWITZERLAND

5.7.1 Key Facts


* 1996Statutory Leave 20 daysPublic Holidays 8 daysRetirement Age Men 65 Women 62

1994 1995 1996 1997Unemployment % 3.6 3.3 3.7 5.0

1980 to 1990 1990 to 1996 1997Consumer Prices % Increase pa 2.9 2.6 (0.1)


Working Week 45 hours per weekSources: World Bank, ILO, and Sedgwick Noble Lowndes


5.7.2.1 Overview

Working hours are determined by statute and by collective agreements.


Law: provides for a maximum working week of 45 hours.

Practice: the average working week is between 40 and 41 hours.


Law: the minimum statutory annual leave is four weeks.

Practice: actual leave is frequently five or six weeks.

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There are eight public holidays per year.

1 January New Year Whit MondayGood Friday 1 August BundesfeierEaster Monday 25 & 26 December ChristmasAscension Day


Spring April 15 daysSummer July and August 25 daysAutumn September to October 14 daysChristmas December to January 10 daysWinter Sport February to March 10 Days

5.7.3 Retirement

5.7.3.1 Overview

Improvements in the relatively high standard of living, and of social security, havetraditionally been achieved mainly through harmonious bi-partite industrial relations.Retirement pensions are made up of the social security pension plus employer arrangedprivate pension plan coverage. The overall objective is that the full retirement pensionwill, for a whole career, amount to 60% of earnings up to the social security earningsceiling. Impending social security deficits are expected to be funded by tax increases.


The social security pension is payable from age 65 for men and 62 for women. Theretirement age for women will rise to 63 in 2001 and 64 in 2005.


Since January 1997, men have been able to retire up to one year before normal retirementage, subject to an actuarial reduction. From 2001, they will be able to retire from age 63,subject to the same actuarial reduction. Similar early retirement provisions will beintroduced for women in 2001, after the increase in the normal age of retirement to 63.


The statutory retirement pension is made up of a basic amount together with asupplement, calculated by reference to revalued average earnings of both husband andwife.

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The majority of employers operate private plans. Most multinationals provide definedpensions in the range 60% to 70 % of final salary, inclusive of social security.

5.7.4 Employer and Trade Union Views on Leisure Time Trends

The views of the Confederation of Swiss Employers were as follows-

• in recent years the number of full time jobs in Switzerland has declined and thenumber of part time jobs has risen substantially. In many cases this means thatpersonal leisure time has increased, but income is lower. In these circumstances thereis a tendency for people to focus on non commercial leisure activities;

• Swiss trade unions are campaigning for a substantial reduction in working time. Thisapproach to trying to share work is opposed by the Confederation, which believes itwould be an agent of job destruction;

• there is a strong tendency towards agreeing working hours on an annual rather thanweekly basis, which provides valuable flexibility;

• work pressures, including the increase in dual income couples, are tending towardsshorter holiday breaks and also encourage more intensive leisure spending;

• increasing paid holiday entitlements is not on the current industrial relations agenda.


Outbound tourism from Switzerland increased from 8.4 million trips in 1985 to 9.2million trips in 1997, down from 11.7 million trips in 1996. Despite intra-regional tripshaving decreased, 83% of trips were to destinations within Europe. This was followed bythe Americas region (7.6% of trips), East Asia and Pacific (4.5%) and Africa (2.7%). Theleading ten destinations for Swiss tourists in 1996 are summarised in the table below.

Country Arrivals 000s Country Arrivals 000sFrance 3,737 UK 584Spain 1,598 USA 417Italy 1,342 Greece 256Germany 848 Hungary 133Austria 746 Netherlands 120

Source: WTO


The Swiss Federation of Travel Agents views were as follows:

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• little change is expected in working time or holiday entitlement. In the longer term it isthought the retirement age may reduce but also that there may be some fall inretirement income;

• increased staggering of school holidays is expected;

• expenditure on main and additional holidays is expected to increase.


• a strong increase in long haul travel is expected;

• demand for extended weekends, short breaks and additional holidays is expected togrow;

• some increase is likely in package holiday demand;

• accommodation demand is expected to rise for hotels, self-catering and apartotels.


• demand by young couples and families for beach holidays is expected to increase;

• strong demand is expected from young people, couples and family members takingholidays independently for golf, diving and walking holidays;

• coach touring and event related demand is expected to grow among young couples,independent family members and the retired. Strong growth in demand by the retiredfor health breaks is also expected.


As the response from the Employers Confederation indicates, although Switzerland is stillone of the richest countries in the world it is not without difficulties. In recent yearseconomic growth has been disappointing and jobs difficult to find. A 1997 poll showedthat 72% of Swiss worried about unemployment and 39 % worried about their pensions.This is the background to Swiss leisure spending and activities.

Nevertheless the industry anticipates growth in main and additional holidays, especiallylong haul; increased demand for packages and a trend towards activity and health relatedtrips.

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5.8 UNITED KINGDOM

5.8.1 Key facts


* 1996Statutory Leave 15 days, 20 from November 1999.Public holidays 8 daysRetirement Age Men 65 Women 60

1994 1995 1996 1997Unemployment % 9.6 8.8 8.2 5.5



Working Week 48 hours per weekSources: World Bank, ILO, BTA, and Sedgwick Noble Lowndes


5.8.2.1 Overview

Historically, the UK has had a highly deregulated approach to working time issues.Unlike many European countries, prior to implementation of the EU Working TimeDirective it had no general statutory law specifying hours of work or legally requiredminimum paid leave.

5.8.2.2 Trends

In the 1980s, and the 1990s to 1997, there was a concerted effort by government to reducethe influence of the trade unions and to substantially deregulate working time. Theprevious government opted out of the European Union Social Chapter but the currentgovernment has opted in to this provision. The adoption by the UK of the EuropeanCouncil Directive on working time, has significant implications for working timeregulation and practice and has now been enacted into law.

A Henley Centre survey shows that in the UK the number of non-working hours in a weekdropped from 67.3 hours in 1992 to 65.2 hours in 1996. A further survey, in 1998,

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showed that 25% of the respondents did not take their full holiday entitlement. The mostimportant reason given was pressure of work.

In the UK, 57% of employees reported that they sometimes or always work on Saturdaysand 37% said the same for Sundays.

A 1998 report on the quality of working life suggested that the tide may be turning againstthe culture of long hours, but British managers still work longer hours than many of theircounterparts in other countries, with a third working over 50 hours each week.

A study entitled The Great Work/Life Debate published in June 1998 showed managersfinding it increasingly hard to balance their personal and work commitments. Their toppriority for change was to work fewer hours. This came before earning more, retiring orreducing stress.


Law: to implement the European Union Working Time Directive, a 48 hour maximumworking week, averaged over 17 weeks, was introduced in 1998 but employees are free toagree to work longer hours.

Practice: normal hours of work are 35 to 40 hours per week, with most workers working37 to 39 hours.


There are eight public holidays. When public holidays fall on a Saturday or Sunday, asubstitute day, normally the following Monday, is designated in lieu.

1 January: New Year's Day Last Monday in MayGood Friday Last Monday in AugustEaster Monday 25 & 26 December: ChristmasFirst Monday in May


Law: implementation of the European Union Working Time Directive has establishedlegal entitlement to a minimum of 20 days from November 1999.

Practice: the general practice is 20 to 25 days paid annual leave, with additional daysawarded for long service. There is no fixed procedure for agreeing annual leave. There isusually no holiday bonus.

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December to January 2 weeksFebruary to March 1 weekEaster 2 weeksMay / June 1 weekJuly to September 5 to 6 weeks

Some education authorities are considering changing the school year from three to fiveterms of eight weeks each, with four weeks summer holiday and two weeks holidaybetween the other terms. A decision is expected in mid 1999.

5.8.3 Retirement

5.8.3.1 Overview

Modest social security pensions are supplemented for many by voluntary, but regulated,additional pension provision.


The social security pension is payable from age 65 for men and age 60 for women. From2010 the retirement age for women will gradually rise to 65 by 2020.


There is no provision for early retirement in the social security pension scheme.


The value of the basic pension is currently approximately 24% of average earnings.There is also optional provision for an additional earnings related supplement.


Private pension plans are widespread and usually provide pensions in the range 50% to70% of final earnings, with an element of indexation. They usually include provision forearly retirement, subject to reduced pension for reduced years of service.


Confederation of British Industry views were as follows:

• the CBI has not considered leisure time as an issue, although it is always a factor inconsideration of working hours. It does not accept that a general reduction in workinghours is a means of increasing jobs;

• in recent years any increases in leisure time, through negotiated changes in workinghours or increases in paid holiday, have been justified by improvements inproductivity.

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Views of Trades Union Congress were as follows:

• the key development affecting leisure time is the Government's implementation of theEU Working Time Directive. The TUC is pleased that the Government hasacknowledged the importance of making the work regime more family, andparticularly child, friendly. This concern reflects the recognition that children needtheir parent’s time, rather than a wish to increase leisure time;

• TUC research suggests that ideally most men would like to work between 35 and 40hours per week. Women would prefer 18 to 20 hours a week;

• more importantly for tourism, implementation of the Directive has made holidays alegal entitlement in the UK for the first time;

• although for many the new legal minimum will be less than their current entitlement, asignificant number will have increased leisure time and an enlarged opportunity to takeholidays;

• maintaining employment and earnings have been the TUC’s main objectives innegotiations with employers and any discussion of reducing the working week hastaken second place, it being recognised that any reduction will increase costs andreduce the competitiveness of the employer;

• the TUC would like to see restoration of the link between the social security pensionand earnings, better access for all employees to occupational pensions and movestowards a flexible decade of retirement, with opportunities to move by stages to fullretirement;

• looking to the future, the TUC believes that some leisure time will be applied to “lifelong learning” in the form of study leave and sabbaticals.



Outbound tourism from the UK increased from 25.2 million trips in 1985 to 33.3 milliontrips in 1997, down from 44 million in 1996. Although inter-regional trips have increasedat a dramatically higher rate than intra-regional trips, destinations in Europe still accountedfor 69% of all trips. The Americas region (17% of trips), East Asia and the Pacific (8%)and Africa (3%) were the most important other destination regions. Data shows outboundtourists taking more overseas trips, staying for shorter periods but spending more whenthey are abroad. The length of stay has reduced from 13 days in 1980 to 11 days in 1995,reflecting the growth in short breaks and improved efficiency of travel modes. Theoutbound market mix remained relatively stable between 1985 and 1995, over two thirdsof trips being for leisure purposes, 15% business related and 12% VFR. The leading tendestinations for British tourists in 1996 are summarised in the table below.

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Country Arrivals 000s Country Arrivals 000sFrance 9,807 Italy 1,687Spain 8,692 Germany 1,425USA 3,246 Portugal 1,405Ireland 3,190 Netherlands 954Greece 1,688 Belgium 808Source: WTO


Domestic tourism has increased from 94 million trips in 1991 to 121 million trips in 1995.The average length of stay has reduced from 4.2 days per trip to 3.7 days. 55% of tripswere leisure related, 29% VFR and 12% business related.


Tourism was estimated to support over 2.3 million jobs, of which 67% was directemployment. More than half of those employed in tourism related industries work parttime, that is less than 30 hours per week. According to the Office of National Statistics, in1996 approximately 200,000 of those working in tourism related industries were self-employed.


The views of the Association of British Travel Agents were as follows:


• some decrease in hours of work is expected, and possibly an increase in the number ofpublic holidays;

• there may be a reduction in the retirement age, especially towards the end of the period,

and some increase in retirement income;

• expenditure on all holidays, and especially additional holidays, is expected to increasethroughout the period.


• short haul and, particularly, long haul travel are expected to increase throughout theperiod but only a small increase is expected in domestic travel;

• a decrease in main holidays is expected, with some increase in additional holidays, short

breaks and, especially, extended weekends; • the frequency of holiday taking is expected to increase throughout the period; • all inclusive and independently organised holidays are expected to grow strongly, with

little increase in package but slightly more in tailored holidays;

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• an increase in self-catering and apartotel accommodation demand is expected

throughout the period and hotel demand later in the period.


• demand among young people is expected to grow strongly for cruises, but less forbeach, diving and other sport and related trips;

• cruise demand is expected to grow most strongly among young couples, who will also

demand more sports based, wild life, city touring and health based holidays; • family demand is expected to grow most strongly for theme parks, cruises, sports based

and self drive touring breaks; • demand from family members on holiday independently, and the retired, is expected to

increase strongly for cruises, with increased demand for winter sun, golf, walking, eventrelated, learning, self drive touring, cultural, wildlife and other ecological and healthbased holidays;

5.8.5.4 Other

BAA, which owns and operates major British airports, views are as follows:

• the forecasting model used by BAA, does not at present include a factor for trends inholiday entitlements;

• cheaper real air fares, rising consumer incomes and changes in exchange rates areconsidered the major determinants of demand. However, BAA recognise that there isno increase in the length of holidays;

• the biggest growth is in weekend city breaks and among the retired. This growth isoutside the peak season and has flexible timing of holidays, which is a particularcharacteristic of the retired. This helps to even the pressure on airport facilities;

• winter traffic is growing faster than summer traffic, partly because of the increase in

travel to the Southern Hemisphere in the November to March period. This also evensthe pressure on airport facilities;

• the overall market continues to expand and BAA recognise that any deterioration in the

airport experience will turn airlines and customers away. The overall quality of theairport depends on good ground transport connections as well as the airport’s ownfacilities.


There is no expectation of significant changes in paid holiday entitlements or publicholidays, although changes in the school holidays are being considered in some localities.

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The working time pressure on many employees seems likely to continue and the self-employed are constrained by the demands of time-limited contracts and uncertainty aboutfuture work.

Those who retire, often earlier and fitter than previous generations, and who have goodsupplementary pension provision continue to be an important market. The proportion ofthe retired with supplementary pensions will continue to increase. Nevertheless,continuing government efforts to contain public expenditure, and encourage morepersonal provision of pensions and support generally in old age, may in the longer termreduce the discretionary income available to many older people, who at present spendsignificantly on tourism and are free of time constraints.

It is likely that time pressures, particularly on managerial and professional employees,will encourage short recuperative breaks which enable people not to be away from theirwork or home too long. The need for flexibility will lead people to booking trips closer todeparture. The importance of IT in enhancing the sophistication of the cancellation andlast minute bookings market will grow.

Increased flexibility of working hours and the trend towards long haul, southernhemisphere destinations will lead to holidays being spread more evenly through the year,especially as the third age segment is not tied to the summer or other traditional seasons.In addition a proportion of pensioners are likely to continue to take long out of seasontrips to sun destinations.

Expenditure on holidays is expected to grow, with a continuing propensity to holidayabroad and a distinct shift towards more physically and culturally oriented activities. Thegrowth of spending on holidays has been strong in recent years. Spending on foreignholidays grew faster than expenditure on any other leisure activity in 1997, rising by 10%,due to several special factors, including windfall financial gains and the strong pound.

There has also been substantial investment in leisure facilities close to home, particularlythe grouping of several facilities together, so that people can have the maximum amount offun with the minimum of effort in terms of travel and without wasting any time. Towncentre renewal with a strong leisure orientation, leisure shopping developments, health andfitness clubs, multi-screen cinemas and an ever expanding range of restaurants, bars andcafe bars are all competing for leisure spend close to home. Much of this investmentalready reflects the growing retired market who are often time as well as cash rich. TheMintel report on British Lifestyles, January 1998 foresees spending on life assurance andpensions rising at over 30% annually in the period to 2002, a doubling of the recent rate ofincrease but holiday expenditure is also expected to rise strongly.

The General Household Survey, 1997 shows a steady rise continuing in the number ofeconomically inactive men in the age range 50 to 59. This suggests there will be anincreasing number of active, relatively young (50s rather than 60s) early retirees as weenter the new millennium. This group will become increasingly important. The sectorsmost likely to benefit are holidays, both home and overseas, and active sport, in particularwalking and golf.

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5.9 SOUTH AFRICA

5.9.1 Key Facts



1994 1995 1997Unemployment % 33 29 30



Working Week 46 hours per weekSources: World Bank, ILO, and Central Statistical Services


5.9.2.1 Overview

Terms and conditions of employment in South Africa have, both before and after thetransition to a multiracial democracy, been determined between employers organisationsand trade unions centrally, with the Basic Conditions of Employment Act of 1983, asamended, providing minimum standards, including working time issues. The LabourRelations Act of 1995 also provides for worker consultation on matters including workingtime issues.


Law: the weekly legal limit for most employees is 46 hours.

Practice: many collective agreements provide for shorter working hours than thestatutory limit and the average working week may be 43 hours, but with significantvariations between industries.

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Reduction of working hours is the subject of current legislation. The long term purpose isto bring working hours down to 40 hours per week in line with international practice, butto do so on a basis that is compatible with employment creation and does not lead to joblosses. The first step will be a reduction to 45 hours. Measures are also to be introducedincreasing the flexibility of working time. Annual leave entitlement will be increased indue course from two to three weeks.


Law: most employees are entitled to 14 consecutive days of paid annual leave for aperiod of 12 months service. Public officials are entitled to between 30 and 36 days leave.

Practice: larger employers usually grant around four weeks paid leave on average.


There are 12 public holidays. If a public holiday falls on a Sunday the following Mondayis deemed to be the holiday.

1 January New Year's Day 16 June Youth Day21 March Human Rights Day 9 August National Women's Day

Good Friday 24 September Heritage DayMonday after Easter Family Day 16 December Day of Reconciliation27 April Freedom Day 25 December Christmas Day1 May Workers' Day 26 December Day of Goodwill


December / January 6 weeksApril 2 weeksJune / July 3 weeksSeptember / October 2 weeks

No change is expected in school holidays.

5.9.3 Retirement

5.9.3.1 Overview

The real disposable income of pensioners is expected to decrease.

5.9.3.2Normal Retirement Age

The official retirement age for men and women is 55, but the actual retirement age forboth is 60. No change is expected in the retirement age.


Early retirement is being encouraged.

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5.9.3.4 Pensions

There are moves to reduce the public expenditure cost of retirement provision and toencourage private provision for support in old age.



Outbound tourism from South Africa increased from 1.0 million trips in 1985 to 1.7million trips in 1997, marginally lower than 1996. 49% of trips were to destinationswithin Africa, 30% to Europe, 10% to East Asia and the Pacific, and 8% to the Americasregion. Inter-regional trips have increased at more than four times the rate of intra-regional trips. The leading ten destinations for outbound South African tourists in 1996are summarised in the table below.

Country Arrivals 000s Country Arrivals 000sZimbabwe 512 Mauritius 50UK 243 Germany 49Swaziland 207 Singapore 45Botswana 200 Australia 43USA 95 Italy 39

Source: WTO


Domestic tourism increased from 12.1 million trips in 1994 to 22.6 million trips in 1996.The average length of stay decreased from 7.1 days to 6.2 days. 53% of trips were VFRand 37% leisure related in 1996.


Tourism is estimated to have supported a total of 580,000 jobs in 1995.

5.9.5 Leisure Time and Tourism - Conclusions

South Africa has been seriously affected by the global financial crisis. Currencyuncertainties have resulted in devaluation and exceptionally high interest rates deferringany hope of economic growth and raising the possibility of renewed recession.Uncertainty and high mortgage interest rates are inhibiting consumer spending. Recoveryin the outbound market is likely to be slow and hesitant.

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SECTION 6

OVERVIEW OF TRENDS AND IMPLICATIONS FOR TOURISM

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SECTION 6 OVERVIEW OF TRENDS AND IMPLICATIONS FOR TOURISM

6.1 Population, Demography and Incomes

6.1.1 Introduction

The 18 selected countries vary widely in population, demographics and stage of economicdevelopment.

6.1.2 Population

Population projections, published by the World Bank, for 2010 are shown in the Key Factstables for each country (Sections 3, 4 and 5). The population growth projections from1996 to 2010 vary dramatically ranging from growth of over 20% in South Africa andMalaysia, to declines in Italy and Germany. The growth projections have to be consideredin the context of the size of the population. The largest numerical increases are projectedin China (134 million), USA (29 million) and Brazil (29 million). The following tableshows the projected increase in the population of each country from 1996 to 2010.

Projected Increase in Population 1996 to 2010

Population Increase 1996 to 2010CountryMillions %

Population 2010millions

China 134 11 1,349USA 29 11 294Brazil 29 18 190South Africa 8 21 46Malaysia 5 24 26Korean Republic 4 9 50Canada 3 10 33France 2 3 60Australia 2 11 20Japan 1 1 127UK 0 0 59Netherlands 0 0 16Sweden 0 0 9Austria 0 0 8Switzerland 0 0 7Singapore 0 0 3Germany (1) (1) 81Italy (2) (4) 55

Among current major tourism generating countries the USA and Canada have reasonablyhigh rates of population growth but Japan and the European countries will have little or nogrowth in the period to 2010. On the other hand, China at 11% has the same growth rate asthe USA but from a far higher base population. Brazil, Malaysia and South Africa areforecast to have some 20% growth. Given reasonable economic performance in thedeveloping countries these disparities in population growth will begin to tilt the globalbalance of generating countries away from Europe and North America.

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6.1.3 Demography

Projections show a significant ageing of the population in each of the 18 selected countries.The percentage increase in the population over the age of 60 ranges from 14% in Italy to62% in the Korean Republic and Malaysia. The largest numerical increase is over 41million in China, followed by the USA (12 million) and Japan (11 million). The followingtable shows the projected increase in the number of people over the age of 60 in each ofthe countries from 1996 to 2010.

Increase in Aged (60 and over) Population 1996 to 2010

Aged Population Increase 1996 to 2010CountryMillions %

Aged Population 2010millions

China 41.4 35 161USA 11.8 27 55Japan 11.3 43 38Brazil 5.5 47 17Germany 3.1 18 20Korean Republic 2.6 62 7Italy 1.8 14 14France 1.8 15 14Canada 1.8 37 7UK 1.5 12 14Australia 1.1 39 4South Africa 0.9 36 3Malaysia 0.8 62 2Netherlands 0.7 24 4Switzerland 0.3 21 2Sweden 0.3 15 2Austria 0.3 19 2Singapore 0.1 33 1

Both established and future leading tourism generating countries have ageing populations.Hence the continued good prospects for the retired market, particularly in those countrieswith good levels of post retirement income and in which people are remaining fitter laterinto life.

6.1.4 Income Levels

6.1.4.1 National Income

The following table ranks the selected countries in bands based on GDP per head,adjusted for purchasing power parity, in 1997.

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1997 GDP per Head Adjusted for Purchasing Power Parity

GDP per head ppp Countries

Over US$25,000 USAUS$20,000 to US$25,000 Singapore, Japan, Switzerland, France, Canada,

Austria, Australia, Italy, UK, Germany, Netherlands,US$15,000 to US$20,000 SwedenUS$10,000 to US$15,000 Korean Rep, MalaysiaUS$5,000 to US$10,000 Brazil, South AfricaLess than US$5,000 China

6.1.4.2 Income in Retirement

The retired market is increasing in importance in all of the selected countries. Time is notgenerally a constraint on tourism activity by the retired, therefore their financial resourcesare critical. Analysis from Sedgwick Noble Lowndes’ Guide to Employee Benefits andLabour Law in Europe 1997/1998, details the level of income typically available inretirement in the selected European countries, Japan and the USA.

The following table shows mandatory and voluntary retirement pensions as a percentage ofgross and net earnings, for workers on average salaries, by country in 1997. The range wasfrom 70% of net average earnings in Japan to 95% in Italy.

Net Pension as % of NetAverage Earnings

Gross Pension as % ofGross Average Earnings

Italy 95 81Germany 94 69USA 88 68Austria 82 72Netherlands 82 62Sweden 81 81UK 77 63France 77 62Japan 70 61

The following table shows mandatory and voluntary retirement pensions as a percentage ofgross and net earnings, for workers on double the average salary, by country in 1997. Therange was from 55% of net average earnings in Japan to 99% in Italy.

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Net Pension as % of NetAverage Earnings

Gross Pension as % ofGross Average Earnings

Italy 99 80Netherlands 86 59Germany 77 56UK 76 65France 72 58Sweden 71 70Austria 70 59USA 70 54Japan 55 46

In all these countries there are moves to increase individual contributions, reduce the levelof pension payments and/or raise the retirement age and to encourage more privateprovision towards retirement income. Anxiety about post retirement income will makemany of the retired increasingly cost conscious in their tourism purchases. But some willfind themselves unconstrained by either time or money and will be open to many tourismpurchases.

6.2 Working Time and Leisure Background

Historically, reducing working hours and increasing leisure time has been a socialobjective in many countries, the purpose being to improve the quality of life and generalwell-being of employees and their families. Hours of work have decreased considerablythis century. The working week has become shorter, the number of public holidays hasrisen and paid annual leave has increased. In addition there has been a trend towardsearlier retirement. Whilst reductions in working time in the developed countries haveslowed considerably in the 1980s and 1990s, the ILO judges that the broad trend towardsfurther working time reductions is likely to continue, subject to some importantqualifications:

• the massive entry of women into the work force has changed the situationconsiderably and women entering the work force will probably work more hours intheir lifetime than previous generations of women. This development greatly reducesthe leisure time available to the family unit;

• although working time reductions may continue at the aggregate level, the workinghours of individuals and sectors are becoming increasingly varied. The length ofaverage weekly hours of work is not comparable between countries because ofmethodological differences in measurement. However, in general, the data areconsistent within each country and indicate trends in working time in that country.Comparing the trends it is clear that, in most countries, average weekly hours of workincluding overtime changed very little over the eight years to 1994 (the latest ILO datawhich was available). Only in countries where the average hours worked wererelatively long is there a marked decrease. This is particularly the case for Japan andthe Republic of Korea. The following table includes data for 10 of the selectedcountries.

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Hours Actually Worked Per Week in Non Agricultural Activities

1987 1993 1994Australia 33.1 33.0 33.2Canada* 31.9 30.6 n/aFrance 39.0 39.0 38.9Germany* 40.2 38.0 38.3Japan 40.6 36.8 n/aKorean Rep. 51.9 47.5 n/aNetherlands* 40.2 40.1 n/aSweden 36.3 35.4 35.8UK 43.7 43.5 n/aUSA* 34.8 34.5 34.7Source ILO * paid hours

Average weekly hours worked in manufacturing in 13 of the selected countries shows amore varied picture. Whilst in the majority of countries the trend is towards stability inhours worked, in some the average has gone up. This is particularly the case for Australia,Singapore and the United States.

In Europe, according to Eurostat, actual hours of work in France, Germany, Italy and theUnited Kingdom were broadly stable in the period 1983 to 1993 for full time and parttime employees together. However, for full time employees there were increases in hoursof work in France and the United Kingdom. From 1993 to 1997, working hours for fulltime employees increased in Austria, Germany, Sweden and the UK and remained staticin other European Union countries.

Working time arrangements are becoming more complex in many countries and areincreasingly designed to meet the needs of particular enterprises or segments of theeconomy. Sustained job creation, which governments seek in order to reduceunemployment, will only come from economic growth with increases in productivity andoutput. So flexible working time practices that enhance competitiveness are likely to bepursued widely. This will affect leisure time in many ways.

6.3 Overview of Regulation of Working Time and Holidays

6.3.1 Introduction

In most of the 18 countries selected for this study, normal weekly hours of work areregulated by law. However, there is often a significant difference between law andpractice, as detailed in the country sections (Sections 3, 4 and 5). Statutory regulationalso applies widely to paid annual leave and, largely, to public holidays.

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6.3.2 Hours of Work

• normal weekly hours of work (legally agreed hours without overtime) range from 48hours in Italy, the Netherlands, Malaysia and the UK to 46 hours in South Africa, 45hours in Switzerland and 44 hours in Brazil, Korea and Singapore;

• the 40 hour week is the regulatory norm in seven of the countries: Canada, USA,China, Japan, Austria, Germany and Sweden;

• only two countries have regulated working hours below 40 hours: France has anormal working week of 39 hours and Australia of 38 hours.

The tradition in many countries of regulating working hours by the week is now givingway to more flexible arrangements. For example, the 48 hour working week recentlyintroduced in the European Union can be averaged over several weeks. Moves in manycountries towards the 24 hour day, seven day week society entail many employees workingat night or at weekends. Many fixed term contract staff simply take time off for holidaysbetween contracts. These changes in the employment market are reducing the traditionalweekend and seasonal peaks of tourism demand.

An equally flexible response is required from the industry, to take advantage ofopportunities to sell appropriate products more evenly through the year. Many of thoseworking flexible hours will not wish to commit far ahead and will be looking for latepurchases. Some will be much more short of time than money and will look for productstailored to their requirements, others will be pressed for both time and money, looking forgood value, affordable products.

Pressure of work and job insecurity mean that in this more flexible environment manyindividuals will not wish to be away from the work place for long holidays but rather for aseries of short breaks. Our consultation with the travel trade shows that this is already clearin the market place.

6.3.3 Paid Leave

• most national systems of paid annual leave are statutory and provide for a number ofdays or weeks of paid leave to accrue to employees after a qualifying period, which isusually one year of service;

• Brazil has an original system designed to discourage absenteeism by reducing holidayfrom a maximum of thirty days depending upon the number of non legitimateabsences;

• in several countries the basic entitlement increases with length of service. This iseither by increasing the leave by one day each year up to a maximum, or grantingthree, four or five days after a certain number of years service also up to a maximum.

Paid annual leave is vital to the tourism industry. In 17 of the countries it is a legalentitlement, but in the USA there is no general statutory provision and paid leave isessentially a matter of individual contract. Even where there is a legal entitlement paid

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leave may not in fact be taken because, for example, of individual or team work pressures,especially in countries with a long working hours culture.

Over recent years, particularly in the USA and increasingly in Europe, there has been amove towards more flexibility in the range of employment benefits offered. Individualsmay have the opportunity to choose, for example, more holiday or more pay, or an extrapension contribution, or child care vouchers. This development is designed to controloverall benefit costs while enabling individuals to choose according to their preferences. Itis an important development for tourism and should be closely monitored. Traditionallysome employment arrangements have allowed employees to receive pay instead of takingholiday; others have not. In the Netherlands there is a trade union view that all employeesshould have the right to pay instead of any holiday above the statutory minimum.

Any tendency for holiday entitlements above a statutory minimum to become negotiablewould have serious implications for tourism.

6.3.4 Public Holidays

In most countries public holidays are regulated by law, alternatively such days are grantedon the basis of custom. Korea has the most generous provision, and China has the lowestprovision.

Country Annual Public HolidaysKorea 18Japan 14Austria, and Malaysia 13Italy and South Africa 12Canada, France, Germany, Sweden and Singapore 11Brazil 10USA 9Australia, Netherlands, Switzerland, UK 8China 7

• public holidays remain the focus of leisure travel in Japan and are very important inAsia as a whole;

• in the USA public holidays are also important, especially for creating three dayweekends;

• in many European countries public holidays are an opportunity, when they fall midweek, to "bridge" to the weekend and create a short break.

The comparative provision of paid leave and of public holidays in the eighteen countries isshown in the following chart.

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In the case of Japan and Korea the chart shows entitlement and an indication of holidayactually taken. Japanese and American employees have only about two thirds of thenumber of holidays that are available to Europeans. In terms of paid annual leave, asdistinct from public holidays, they have only about half of the time available toEuropeans. Thus opportunities for Americans and Japanese in the working population totake overseas trips of several days duration are significantly restricted. As reported in theUSA and Japan sections of this report (Sections 3.3 and 4.3 respectively) there is evidencein both countries of a demand for more leisure.

6.4 Overview of Findings on Leisure Time

6.4.1 Introduction

Our analysis of leisure time shows that national economic policies are focused onincreasing competitiveness and that leisure time has little priority. Whilst recognising thattourism is a growth sector for jobs, governments look principally to inbound visitorgrowth, relying on leisure time in generator countries. Yet, in many of those countriesindividuals, especially more senior, full time employees, who are a vital tourism market,find that their leisure time is squeezed.

6.4.2 Consultation with the Travel Industry

Our consultation with the travel industry shows that, overall:

• there is no expectation of increase in paid holiday or in public holidays in the short term;

• few countries expect any significant reduction in working hours except in the medium tolong term;

• the retirement age is expected to rise in many countries with a possible fall in retirementincome;

• the frequency of holiday taking is thought likely to increase, with growth in short breaksand, especially, in extended weekends;

Paid Leave and Public Holidays

0

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Public HolidayPaid Leave

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• within a general trend towards activity based holidays, those which offer time efficient,intensive breaks are expected to do particularly well.

6.4.3 Trade Union Views

In many countries trades unions, which in the past pressed for increased holiday, are nowmore concerned to maintain employment and urge that increasingly flexible working hoursshould be "family friendly", take account of family commitments and enable people toplan their leisure time.

In Europe some trade unions believe that future negotiations for more free time should takeaccount of "life long learning" and employees' need to have sufficient time to update theirskills. This presents opportunities for the industry and illustrates how work interests andskill requirements can link with personal leisure activities and travel interests. Manyholiday products already provide opportunities for learning, for example, languages andcomputer skills.

6.4.4 Life Cycle

Industry views were invited on the growth prospects, in the short term, for particulartourism products in the following markets:

Young people and young couples: the young are less affected by leisure time pressuresthan older people. Many take the opportunity to travel widely before embarking on theircareers. The increased flexibility of employment and reduced emphasis on lifetime careersencourages many to continue to take further breaks between periods of work after joiningthe active working population. These experienced travellers will be an important futuremarket.

Families: family holidays are fashioned by the time constraints on parents, which can be aparticularly difficult problem in the case of dual income couples A number of holidayproducts are meeting the needs of this market, especially theme parks and cruises.

Independent Family members: one response to the time pressures on families and to theincreasingly diverse holiday interests of individuals within the family group is to holidayindependently. A range of products is particularly suited to this market, including eventrelated and special interest holidays.

The retired: the needs of the retired are met by products, many of which reflect theirincreased leisure time, for example, winter sun and cruises.

6.5 Leisure Time and Tourism by Region

6.5.1 Introduction

The following sections consider in more detail the impact of leisure time on tourism, setout findings in relation to the countries studied by region and highlight tourism productsthat meet the needs of increasingly segmented markets.

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6.5.2 Americas Region

6.5.2.1 Brazil

Statutory leave is generous - up to 30 days - and there are 10 public holidays. The speedof recovery from the 1999 economic crisis rather than lack of leisure time will be theprinciple determinant of tourism in the short term. The outbound market, which is thelargest origin market in South America, will be inhibited by the devaluation, austerity andcontinuing economic reforms but this may strengthen the domestic market.

Changes in leisure time: working hours may increase, with a possible reduction in publicholidays. Willingness to take full holiday entitlement may fall, with a decrease inexpenditure, especially on additional holidays.

Travel: there may be some increase in short haul and, particularly, domestic travel.

Types of holiday: any growth will be mainly in extended weekends. There may be someincrease in package and all- inclusive and, particularly, in tailored holidays reflecting theimportant high spending element in Brazil's outbound market.

Tourism products: as the market recovers growing demand is anticipated from :

• young people and young couples for activity holidays especially diving and trekking,theme parks and cruises;

• families for activity holidays including diving and fishing, coach touring, theme parksand cruises;

• independent family members for winter sun, trekking, coach touring;

• retired people for beach, winter sun, walking, coach touring, pilgrimage.

6.5.2.2 Canada

Statutory leave is some 10 rising to 15 days, and more generous than in the USA. Thereare 11 public holidays.

Changes in leisure time: there may be an increase in working hours, but also inwillingness to take full holiday entitlement and in holiday expenditure, especially onadditional holidays. No change is expected in paid or public holidays.

Travel : there may be an increase in short haul travel.

Length and types of holiday: main holidays are expected to decrease and an increase isexpected in short breaks, especially extended weekends, with rising frequency of holidays.Growth is most likely in tailored and independently organised holidays.

Tourism products: growing demand is anticipated from:

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• young people and young couples for activity holidays, particularly diving, trekking,sports and event related tourism, cruises;

• families for walking, event related tourism, city touring, theme parks, trekking;

• independent family members for coach touring, learning, cultural, special interest,multi-city tours;

• retired people for beach holidays, cruises, golf, walking, trekking, cultural, health,multi-city tours, learning, special interest.

6.5.2.3 USA

Paid holidays, which are not statutory, are most commonly 10 days, perhaps rising to 15days after 8 years There are 9 public holidays. Paid holidays are not expected to increasebut will continue to reflect employment market conditions. In the present tightemployment market those with scarce professional or technical skills may be able tonegotiate more leisure time. Equally, some employers will respond to the demand formore leisure with schemes which enable extra days of leave to be earned. The trendtowards more flexible employment benefits will enable individuals to choose between timeoff and other benefits.

Changes in leisure time: no general change is likely in working hours, paid or publicholidays. Increasing expenditure on vacations is likely, especially on short breaks.

Travel: an increase is probable in domestic, intra regional and long haul travel.

Length and types of holiday: growth is likely mainly in short breaks, especially extendedweekends, with increased frequency of holidays.

Tourism products: growing demand is expected from:

• young people and young couples for activity holidays, theme parks, cruises;

• families for touring holidays, theme parks, cruises;

• independent family members for special interest, cultural, sport and event relatedbreaks;

• retired people for cultural, special interest, activity holidays, health, cruises.

Limited paid holiday, work pressures, the increase in two earner households and familycomplications arising from divorce all encourage the growth of short breaks, especiallyaround weekends and public holidays. This favours continued expansion of domestic andother destinations which offer short travel times and optimal value for limited leisure time.The domestic industry has the advantage that it can offer almost every type of holidayexperience and a wide climate range. The success of theme parks and cruises illustratesthe opportunities for intensive breaks offering multi-generational experiences which enablefamilies to enjoy leisure time together, along with facilities to pursue individual interests.In some states a new pattern of school holidays, more education driven, is being adopted,

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based on eight week terms alternating with two week breaks. This is changing the patternof family holidays and will have an important effect on the industry if it is taken up morewidely.

6.5.2.4 Regional Overview

In North America, especially the USA, limited leisure will continue to favour timeefficient, intensive short breaks, with growth opportunities for longer vacations andoutbound travel, other than to Mexico and Canada, chiefly among the retired, who have thetime and the means to travel and to enjoy many activities and cultural pursuits.

The evidence of pent up demand for more leisure in the USA and the way in whichemployers are responding with more flexible benefit packages suggests that it may betimely for the industry to press the case for paid holidays as an investment in good health,employee productivity, stress management and fitness, not merely a business cost to beminimised. This consideration is well recognised in the thriving incentive travel market.

One challenge to the travel industry is to offer products which consumers find ascompelling in terms of satisfaction and status as the purchase of consumer goods.Consumers may then insist more strongly on leisure time rather than taking incomeinstead.

Looking to the future, continued industrial restructuring is likely to maintain a level ofuncertainty among employees which will continue to inhibit increases in paid holiday.

6.5.3 Asia Pacific Region

6.5.3.1 Australia

Statutory leave is 20 days with some 8 public holidays. There is a growing trend foremployees to exchange paid overtime for leave, increasing the opportunity to take longweekends.

Changes in leisure time: there may be an increase in working time. No change isexpected in paid or public holidays. Some increase is possible in expenditure on holidays.

Travel: there may be some increase, especially in short and medium haul and possibly indomestic travel.

Length and types of holiday: most growth is expected in short breaks of seven days orless and in package, all inclusive and lower cost products, with a tendency to morefrequent trips.Tourism Products: growth is most likely in short breaks to the more affordable Asiandestinations, in city breaks and in sea cruises.

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6.5.3.2 China

Statutory leave is 10 days and there are 7 public holidays.In the long term, given successful economic progress, the market has enormous potentialbut, at present, outbound tourism is at an early stage of development and strongest withinthe region. Developments in government policy on outbound tourism are likely to be moreimportant than changes in leisure time in determining the future rate of growth. Economicdifficulties are likely to inhibit growth in the short term. These difficulties have weakenedthe inbound market and the consequent availability of capacity may stimulate the domesticmarket.

In the short term outbound growth is likely to be largely in intra regional travel.

6.5.3.3Japan

Statutory leave is 10 rising to 20 days but only some 9 days are taken. The 14 publicholidays continue to be a main focus of leisure travel.

Changes in leisure time: some future reduction in working hours is possible, but withreduced willingness to take holiday entitlement.

Travel: with economic recovery increases are expected in long and short haul travel.

Length and type of holiday: any growth is most likely to be in short breaks, especiallyextended weekends. There may be a decrease in all inclusive holidays, with future growthin tailored and, especially, independently organised holidays.


• young people and young couples for trekking, sports related breaks and, especially,diving.

• families for skiing, diving, self drive touring and, in the longer term, cruises and beachholidays.

• independent family members for diving, golf, coach touring, special interest, health.

• retired people for cruises, especially in the longer term, golf, walking, coach touring,learning, special interest, wild life, and health.

Growth will depend on improved economic performance. There is little prospect ofincreased willingness, on the part of the working population, to take paid holiday for traveluntil the economy improves. One aspect of that improvement may be a rise inunemployment and decline in job security, which may further strengthen the traditionalwork ethic. So it is likely that Japanese executives will continue to have little opportunityfor long haul leisure travel and holidays will continue to focus around weekends and publicholidays.

The more leisure orientated young, especially the office ladies, and the retired, in theworld's most rapidly ageing society, will present the best growth prospects for outbound

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tourism. However, reduced consumer confidence and a weaker yen have made consumersmore cost conscious, increasing the competitiveness of domestic and intra regionaldestinations, especially those where the yen is strongest.

The government has acted to strengthen consumer demand by increasing the number oflong weekends; certain national holidays will in future always fall on Mondays. Theindustry hopes this may trigger a small rise in leisure travel.

In the longer term, as a means of boosting demand for leisure products and services andstimulating the economy the government may act to encourage employees to take more oftheir holiday entitlements. The industry is encouraging this but recognises that other actionis also needed both by government and the industry to re-establish tourism growth inJapan. The measures required include reducing the seasonal peaking of holiday taking,and consequent congestion; international airport expansion; lower air travel costs and moreflexible outbound packages allowing more free time.

6.5.3.4 The Korean Republic

Statutory leave is generous at some 22 days but in practice only a small proportion of thisis taken. There are 18 public holidays. Before the recent economic difficulties asubstantial outbound market had developed, although restrictions on outbound travel wereonly abandoned in 1989. The economic recovery programme will subdue consumerspending and rising unemployment makes it unlikely that more leave will be taken.Meanwhile the campaign for holidays at home should strengthen the domestic industry.Consultation with the industry, which pre-dated the economic crisis, suggested how themarket may develop once economic recovery is achieved

Changes in leisure time: a decrease in working hours with some increase in paid holidaywas anticipated with more willingness to take holiday entitlement and increasedexpenditure on holidays

Travel: some increase was envisaged in long and short haul and domestic travel.

Length and type of holiday: increases in main and additional holidays, holidayfrequency, package and tailored holidays and, particularly, in independently organisedholidays were envisaged.

Tourism products: growing demand was anticipated from:

• young people and young couples for beach, cruise, diving, activity holidays, learning,self drive touring and, particularly, theme parks;

• families for theme parks, cruises, diving, activity holidays, self drive touring;

• independent family members for golf, cruises, walking, coach touring, theme parks;

• retired people for cruises, golf, health and activity holidays.Given the severity of the economic crisis and the traditionally strong work ethic leisure islikely to have low priority for some time. As the economy strengthens the industry willwish to ensure that the importance of leisure time and of the freedom to travel is fullyrecognised. The years of swift growth of outbound travel before the crisis illustrate the

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high value which Koreans place on international travel. Nevertheless the recovery of theoutbound market is likely to be slow and hesitant in the wake of economic recovery.

6.5.3.5 Malaysia

Statutory leave is 8 rising to 16 days and there are 13 public holidays. The measurestaken to recover from the recent economic crisis and, in particular, the currency controls,are the key factors now shaping tourism. As the economy recovers consultation with theindustry has suggested how the market may develop.

Changes in leisure time: there may be an increase in working hours. No increase isexpected in paid holidays but willingness to take holiday entitlement may increase.

Travel: short haul and domestic may increase.

Length and types of holiday: no change is expected in main or additional holidays butextended weekends may decrease.


• young people and young couples for learning, cultural, city touring, theme park andself drive holidays;

• families for trekking, health, self drive touring, theme parks;

• independent family members for walking, health, self drive touring, learning, citytouring;

• retired people for health, city touring, walking.

Prior to the crisis outbound tourism was growing strongly. Now the government seeks astronger domestic market and the focus of policy is on building inbound tourism. Againstthis background of economic reconstruction leisure time is likely to have low priority, withoutbound tourism recovering only slowly

6.5.3.6 Singapore

Statutory leave is 7 rising to 14 days and there are 11 public holidays. The economy hasbeen less affected than others in the region by financial difficulties. Weakening in theoutbound market may be relieved by the strength within the region of the Singaporeancurrency.

Consultation with the industry, which pre-dated the regional crisis, suggested how themarket may develop.

Changes in leisure time: working hours may increase with an increase in expenditure onholidays.

Travel: short haul is likely to increase with some increase also in long haul.

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Length and types of holiday: increases are expected in main and, especially, in shortholidays and in holiday frequency. Package holidays are expected to decline with anincrease in independently organised holidays.


• young people and young couples for beach holidays, skiing, winter sun, trekking anddiving holidays, self drive touring, cruises;

• families for beach, cruises, winter sun, skiing, diving, self drive touring, theme parks;

• independent family members for winter sun, cruises, trekking, self drive touring,cultural, special interest, city tours;

• retired people for cruises, golf, pilgrimage.


Australia has been comparatively unscathed by the economic difficulties which haveseverely weakened Japanese tourism and hit the Korean Republic, Malaysia and Singaporehard. Australian leisure time and leisure culture are closer to the European tradition.Holidays have long been an important area of discretionary spending. The industry is nowresponding to trends towards shorter, more frequent holidays.

The Asian countries have less well established traditions of leisure time and holidaytaking. In addition a strong work ethic makes many people reluctant to take holidayentitlements. Whilst the Korean, Malaysian and Singaporean economies recover thetourism policy priority for governments will be to encourage domestic markets and buildinbound markets. Leisure time is unlikely to increase and for many work pressures mayrise. In all three countries the working week is normally five and a half days. Once theeconomies are re-established the industry may wish to press for a five day week andgreatly expand the weekend market.

Japan is the one country to have successfully encouraged outbound tourism as a means ofstimulating consumer demand and redressing international payments surpluses. This wasthe achievement of the 10 Million Programme which ran in the late 1980s. The industry,which has suffered severely from the downturn in travel, is urging the government to domore now to encourage people to take holidays as a means of fostering consumer spendingand economic recovery. But the task is difficult, given the continuing low level ofconsumer confidence, despite discounting by tour operators and the emergence of low costcarriers. Hence the importance of the range of measures identified by the industry asprerequisites of outbound tourism recovery and designed to rekindle enthusiasm for travelas consumer confidence recovers.

The Japanese government has also made efforts to reduce working hours but still onlysome 50% of employees enjoy a regular five day week. There is scope here for substantialfurther development of the weekend market if a persuasive case is made for further actionto implement five day working.

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In Japan and in the Korean Republic, Malaysia and Singapore there are indications thateconomic recovery will be accompanied by a trend towards more independently organisedtravel and away from packages, reflecting the growing experience of overseas travel inthese countries. This means that a broader range of holiday experiences can be offered,with opportunities to engage more closely with the destination and the host community.The anticipated growth in self drive tours is one example. New products may be veryimportant in restimulating markets which have been traumatised by the sharp economicdownturn. The products most likely to foster recovery and willingness to use leisure timefor tourism are likely, initially, to be high value, affordable and short, taking advantage ofthe traditional focus of holiday taking around weekends and public holidays. In the longerterm it will be important for the industry to research consumer holiday motivation andencourage individuals to see the importance of leisure as an opportunity for self realisationand development; not merely as time to recover from work.

6.5.4 Europe, Africa and the Middle East

6.5.4.1 Austria

Statutory leave is 25 rising to 30 days and there are 13 public holidays.

Changes in leisure time: no significant changes are expected in working hours or paid orpublic holidays or in expenditure on holidays.

Travel: no change is expected, except a possible fall in short haul travel.

Length and types of holiday: there may be a decrease in additional holidays and shortbreaks, except extended weekends, which, like holiday frequency, are not expected tochange. All inclusive and tailored holidays are expected to increase, with a tendency tomore independently organised holidays.

Tourism products: growing demand is expected from

• young people and young couples for beach, winter sun, diving , trekking, event related,special interest, self drive touring, cultural and city touring;

• families for beach, walking, learning, self drive touring, theme parks;

• independent family members for golf, diving, trekking, cultural, special interest, citytouring, health;

• retired people for cruises, walking, coach touring, cultural, special interest, wildlife,city touring, health, pilgrimage.

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6.5.4.2 France

Statutory leave is 25 days and there are 11 public holidays. France is more active than anyother country in seeking to reduce unemployment by reducing working time, increasingleisure and sharing work more widely.

Changes in leisure time: introduction of the 35 hour week will reduce working hours butno change is expected in paid or public holidays. Any increase in holiday expenditure isexpected to be on additional holidays.

Travel: there may be an increase in long haul travel.

Length and types of holiday: any increase is expected to be in short breaks and extendedweekends, with a possible decline in main holidays and increase in the frequency ofholidays. Growth is most likely in package and tailored holidays, with a decline in allinclusive and independently organised holidays.

Tourism Products: growing demand is anticipated from:

• young people and young couples for winter sun, skiing, diving, trekking, other sports,learning, special interest, cruises;

• families for cruises, walking, other sport;

• independent family members for walking, trekking, other sport, special interest, health;

• retired people for cruises, golf, trekking, learning, cultural, special interest, health,beach plus cultural or environmental interest.

6.5.4.3 Germany

Statutory leave is 24 days. There are between 9 and 13 public holidays, varying acrossthe regions.

Changes in leisure time: there is some possibility of a decrease in working hours andalso of a decrease in willingness to take full holiday entitlement.

Travel: there may be some increase in long haul and decline in domestic travel.

Length and types of holiday: a decrease in additional holidays is possible but with anincrease in short breaks and extended weekends. Demand for packages may decrease withsome increase in all inclusive and tailored holidays.


• young people and young couples for winter sun, diving, trekking, self drive touringcultural, special interest, wildlife, multi-city tours, city touring and theme parks;

• families for winter sun, trekking, other sport, self drive touring, wild life, multi-citytours, theme parks;

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• independent family members for winter sun, diving, walking ,sport and event related,special interest, wild life, multi-city tours, city touring, theme parks;

• retired people for winter sun, trekking, event related, learning, self drive touring,cultural, special interest, wild life, health.

6.5.4.4 Italy

Statutory leave is 15 days but in practice 30 days is typical. There are 12 public holidays.

Changes in leisure time: introduction of the 35 hour week will reduce statutory workinghours. No change is expected in paid or public holidays. There may be some increase inexpenditure on holidays.

Travel: there may be some increase in long and short haul and domestic travel.

Length and types of holiday: growth is most likely in short breaks, especially extendedweekends; also in all inclusive and independently organised holidays.


• young people and young couples for beach, winter sun, skiing, diving, walking,trekking, self drive touring, multi-city tours, city touring, theme parks;

• families for beach, cruises, winter sun, skiing, theme parks;

• independent family members for cruises, winter sun, diving, health;

• retired people for cruises, winter sun, golf, trekking, special interest, health.

6.5.4.5 Netherlands

Statutory leave is 20 days and a statutory holiday bonus of at least 8% is payable. Thereare 8 public holidays. Employees have the right to two consecutive weeks holidaybetween May and October.

Changes in leisure time: some reduction in working hours is possible, at least in thelonger term, together with some increase in paid holidays. No significant rise in holidayexpenditure is expected in the short term, with more confidence in increased spending onadditional than on main holidays.

Travel: long haul travel is likely to increase more rapidly than short haul or domestictravel.

Length and types of holiday: the length of holidays is expected to decrease, with anincrease in frequency of holiday taking. Growth is expected mainly in package holidays.

Tourism products: growing demand is anticipated from :

• young people and young couples for beach, activities, skiing, winter sun;

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• families for beach, winter sun, activities, city touring;

• independent family members for event related, special interest, culture, multi-citytours;

• retired people for winter sun, special interest, golf, cultural and health related holidays;cruises.

6.5.4.6 Sweden

Statutory leave is 25 days, and a holiday bonus of some 13% is payable. There are 11public holidays. Paid leave in excess of 20 days can be accumulated for up to 5 years toallow for a longer holiday and employees are entitled to 4 consecutive weeks between Juneand August. There is interest in establishing "free time banks" with freedom to use theaccumulated leave entirely as individuals wish - perhaps reducing the working day for aperiod rather than going away on holiday.

No overview is available from the national industry association but indications are thattourism may develop on the following lines.

Changes in leisure time: no changes expected.

Travel: there may be an increase in short and long haul travel.

Length and types of holiday: growth is likely in short and longer trips.

Tourism products: growing demand is probable from:

• young people and young couples for beach, activities, winter sports., city breaks;

• families for beach, winter sports, cruises;

• independent family members for special interest, culture, event related, multi-citytours;

• retired people for winter sun, cruises, special interest, and culture holidays.

6.5.4.7 Switzerland

Statutory leave is 20 days but in practice 25 to 30 days is quite usual. There are 8 publicholidays. Working hours are increasingly negotiated on an annual rather than weeklybasis, increasing the flexibility of leisure time through the year.

Changes in leisure time: some decrease in working hours is possible together with anincrease in willingness to take full holiday entitlement and in expenditure on additionalholidays.

Travel: there may be some increase in short haul travel.

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Length and types of holiday: there may be an increase in extended weekends. Tailoredand independently organised holidays are the products most likely to increase in demandbut there may also be an increase in all inclusive holidays.


• young people and young couples for cruises, winter sun, skiing, diving, trekking, sportsrelated, learning, self driving tours, wild life, theme parks, beach, event related, selfdriving touring, cultural, special interest;

• families for cruises, diving, self drive touring, city touring, health, theme parks;

• independent family members for cruises, skiing, golf, trekking, sport related, coachtouring, event related, learning, cultural, wild life, city touring, health, theme parks;

• retired people for cruises, golf, walking, coach touring, event related and culturalholidays.

6.5.4.8 United Kingdom

Statutory leave is 15 days but the general practice is some 20 to 25 days. There are 8public holidays.

Changes in leisure time: no change is likely in working hours or in willingness to takefull holiday entitlement. An increase in expenditure on holidays, especially additionalholidays, is possible.

Travel: some increase is likely in short haul and, especially, in long haul travel.

Length and types of holiday: the length of main holidays is likely to decrease with anincrease most likely in extended weekends, all inclusive, tailored and independentlyorganised holidays.


• young people and young couples for beach, cruises, diving, sport and event related,theme parks;

• families for cruises, sport related, wild life, theme parks, self drive touring, citytouring;

• independent family members for walking, cultural, special interest, multi-city tours,city touring, health, cruises, golf;

• retired people for cruises, winter sun, golf, walking, trekking, coach touring, eventrelated, cultural, special interest, wild life, multi-city tours, city touring, health, selfdrive touring.

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6.5.4.9 South Africa

Statutory leave is 14 days and there are 12 public holidays. South Africa has beenseriously affected by the recent financial crises. This has resulted in devaluation and highinterest rates and fears of recession.

No overview is available from the national industry association but outbound tourismgrowth is expected to be slow in the short to medium term. This may strengthen thedomestic market.

In the longer term the potential market for outbound tourism will benefit from proposals toreduce working hours but in the short term the emphasis in tourism policy will be onstimulating the inbound market.


All the countries of the European Union now share the same minimum statutory holidayentitlement. However, at 15 days annually, it is below the entitlements of most employeesand will have limited importance for tourism. Those who do benefit from an increase inholiday as a result of the new statutory minimum are likely to be mainly interested in lessexpensive products, whether domestic or outbound.

In France and Italy the working week is being reduced to 35 hours. The objective is toreduce unemployment rather than to increase leisure time but it will offer someopportunities to the industry. In many cases negotiations on this change are alsointroducing more flexible working hours. So the outcome may be to spread some increasein demand widely through the year.

Generally it seems that Europeans have sufficient leisure time to take holidays. Howeverthere are indications that work pressure prevents some taking their full entitlements and inthe Netherlands one reason for interest in a right to pay instead of holiday above thestatutory minimum is a view that some employees are simply too busy to be able to taketheir holiday. This situation is reflected in the response from the industry which reports acontinuing trend to more frequent but shorter holidays, especially extended weekends,which enable people to avoid being away from the workplace too long but provide arefreshing break.

In Europe holidays now play an important part in the lives of most people. In severalcountries a holiday premium is paid. There may also be opportunities to bridge fromweekends to public holidays, to accumulate leave in order to take long holidays and to takeholiday during the best months of the year. This suggests a culture that gives holidaysgreater importance than they have in North America or Asia. Yet, whilst present holidayprovision is not being challenged, it remains to convince European industry and mostgovernments that increased leisure is the way forward to improved economic performanceand high employment in an ever more competitive world economy.

In view of the trend among employers to offer flexible employment benefits, with holidayas one option among others, and the recent implementation of the Working Time Directive,establishing minimum holiday rights it would be timely for European Union governmentsto monitor changes in holiday entitlement. Monitoring would cover the amount of holiday

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taken and how much is used for holidays away from home. This would provide the basisfor further research into the extent to which work and other demands are eroding the timeavailable for holidays.

The major consolidations taking place in the European holiday industry should yieldeconomies of scale, more integration of holiday components - travel, accommodation andrelated services - and generate increasingly sophisticated products designed to appeal to aEuropean market of experienced but time pressed consumers.

6.6 Summary Findings on Leisure Time and Tourism

6.6.1 Leisure Time and Changing Work Patterns

In none of the eighteen countries is leisure time expected to increase significantly in termsof paid or public holidays, in the short term.

The EU Working Time Directive provides a statutory basis for paid holiday but thisalready existed in most member states and the level set will only increase holidayentitlements for a comparatively small proportion of employees

The 35 hour week being introduced in France and Italy is designed to reduceunemployment rather than increase leisure and the effect on holidaying is likely to bemarginal.

The new Japanese Happy Mondays result from moving existing public holidays, notcreating new ones.

• the more flexible working patterns developing in many countries, together withrestructuring and delayering, are likely to lead to more individualised working patterns,with longer, less predictable working hours for many. This will accelerate the trendtowards late booking and increase the importance of easy and efficient services forholiday selection and purchase;

• increased flexibility of work through the week and through the year, together with thegrowth of long haul travel, will spread holiday taking more evenly through the year.

6.6.2 Competition for Leisure Time

The amount of leisure time available varies widely among the countries included in thestudy. The proportion of that time which is spent on tourism will depend upon theattractiveness of the products which the industry offers. As standards of living rise so therange of leisure time options broadens. People lead fuller lives and have more hobbies andinterests. Many of these are focused in or near the home, which is increasingly arelaxation and entertainment centre. Towns and cities around the world invest heavily tobecome more pleasant places to invest in and to live in. So shopping, cultural, restaurant,leisure and pleasure facilities proliferate, often on single sites so that people on tightschedules can save time yet spend on a variety of activities and attractions.

At the same time, for many people, changes in the employment market are making time asprecious as money. In addition increasingly knowledgeable and experienced consumersseek more value and individuality from their purchases, whether of goods or services.

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6.6.3 Successful Tourism Products

To meet contemporary holiday needs tourism products must compete with the pressures onconsumers' leisure time and the widening range of leisure opportunities near to home , aswell as with second homes and timeshare. There are also those attractions which offeralternatives to overseas travel, for example Centre Parcs, which provide weather proofcentres for family water recreation holidays in northern Europe and Disney's AnimalKingdom, which recreates Serengeti in Florida. Many theme parks offer day trips andshort breaks close to major conurbations.

A fundamental competitive advantage of leisure investments of this kind is that they offereasy, convenient access. This must add to the vital interest of the tourism industry inpressing governments to ensure the quality of transport services. Congestion, delay andunreliable transport deter travel.

The overview of consumer product preferences at section 6.4 of this report illustrates thediversity of holidays sought by an increasingly segmented market. Many of the productsshow that consumers wish to pursue more intensely while on holiday particularenthusiasms which they enjoy at home, perhaps a cultural or activity interest. In additionto marketing through the travel trade there are many other opportunities to market to theseconsumers, through, for example, affinity groups as well as specialist media. The holidayoffer can build on an existing enthusiasm for which the consumer will be particularlydetermined to find time.

There is also a strong demand for escape and refreshment. In this case getting away fromhome and work for a period is an intrinsic requirement which the holiday offer can satisfy.

The success of theme parks and cruises illustrates consumer enthusiasm for productsoffering a range of activities and entertainment designed to appeal to all the family. Someare to be enjoyed by the family together, others appeal to particular age groups andinterests. All are available together to be enjoyed intensively, often for a few days only.

Resorts which offer beaches and a range of activities also meet the need to pack relaxation,and activity into limited holiday time.

Like other industries tourism now competes in a market place in which consumers have awide choice when they make spending decisions. But the tourism industry must persuadepurchasers to devote time as well as money to the product.

One means of doing this is to get closer to consumers and their holiday motivations bydeveloping relationship marketing and building up holiday biographies of clients. Takingaccount of previous purchases, products can be selected and offered which are likely to beparticularly attractive and promise a satisfaction for which time must be found.

The variety of holiday products now available goes far beyond "sun, sea and sand", thestaple once offered by so many destinations. But continuing market research is needed toestablish what satisfactions consumers want from holidays, identify and remedyweaknesses in current products and develop new ones. Increasingly these are likely to be

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modular packages which enable consumers to mix and match components, including triplength, to meet their personal requirements.

Analysis of the views of the industry on growth prospects suggests that already a range ofproducts is well adapted to the changing market:

• beach and other resorts which provide a range of activities and attractions in a goodenvironment, are easy to reach, pleasant to be in and have good communications tohome and office;

• cities with good transport links, user friendly airports and an attractive environmentoffering culture, entertainment and good shopping, which can be enjoyed during ashort break;

• “get away from it all" destinations, offering an excellent environment, whether for totalrelaxation and tranquillity or for the pursuit of cultural , physical or environmentalinterests; also with excellent communications with home and office;

• theme parks, which are conveniently located, with good transport links and offer a fullrange of entertainment and activities to be enjoyed by all the family over a short break;

• cruises, many of which are getting shorter and more affordable and which, like floatingresorts, offer a full range of entertainment and leisure options to satisfy the wholefamily.

These products, as well as meeting the holiday needs of those in the working populationand their families, also appeal widely to the young, to family members who may holidayindependently and to the retired but the industry also identified products with particularappeal to these markets.

Products with distinctive appeal to the young include activity holidays, particularly diving,skiing, trekking and soft adventure. These interests provide an indication of the probableholiday preferences of this market as it grows older and comes under greater timepressures.

Holidays with particular appeal to those taking holidays independently include specialinterest holidays, coach touring, event related tourism and cultural and health relatedholidays. These products are suited to individuals holidaying independently, whether toavoid the difficulties of synchronising holiday taking with other family members or, in anincreasingly differentiated market, simply using their leisure time to pursue individualinterests.

Holidays with particular appeal to the retired include, winter sun, cruises, special interest,cultural, coach touring, walking, and health related products.

6.6.4 Time and Money

The broadening of income differentials which has accompanied the pressure on leisuretime in many countries means that increasingly income is inversely related to availabletime. So those in the working population who are best able to afford holidays have the

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greatest difficulty in finding time to get away, especially for more than a short break. Thechallenge for the industry is to create compellingly attractive products that can be enjoyedwithin the purchaser’s time constraints.

Reflecting this the response from the industry , in addition to the general expectation thatthe greatest growth will be in short breaks, also shows that there is an expectation ofincreased demand for tailored holidays. There are opportunities here for luxury and exoticbreaks but also for high quality domestic or same region or time zone products whichminimise travelling time as a proportion of the break and avoid jet lag.

Those with more time but with lower incomes will be concerned with affordability. Thismay be reflected in the growth anticipated by the industry in fully inclusive holidays,which make it easier for people to budget for their holiday before leaving home.

For all those affected by the increased flexibility of employment and greater work pressureopportunities to select and book holidays at the last minute are important. This maystimulate direct bookings and use of the internet but is also an opportunity for travel agentswho can provide fast, efficient service.

Income differentials are also widening among the retired and the gap between highlypriced and cheaper products aimed at this market is likely to increase. The retired who arefinancially secure, with relatively high incomes, form the core of outbound tourism growthin many countries and have the greatest potential for more frequent travel. A wide rangeof products attract this market, but it is discerning, increasingly seeks tailored products andhas plenty of non travel related interests, which make many reluctant to be away fromhome too often or too long.

The retired with less substantial incomes are likely to become even more cost and valueconscious, particularly in countries facing significant changes in pension arrangements, butare an important market, especially for destinations where living costs compare favourablywith those at home and where long winter sun holidays are affordable.

In view of the importance of the retired market more research on their travel interestswould be helpful, focusing particularly on willingness to take extended holidays and totravel in the shoulder months and out of season.

The older retired greatly appreciate ease of travel arrangements, not having to handlebaggage and having medical services at hand. Cruises meet these requirements well, offersecurity and largely eliminate the effort that would otherwise be involved in visitingseveral cities or other attractions within a short period.

Generally, however, as the retired grow older the propensity to travel gets lower. Thechallenge to tourism marketing is to change, or at least defer, this.

Since populations are growing only slowly or stagnating in many of the established majortourism markets, particularly Japan and most of the European countries, the retired marketis an increasingly important opportunity for growth and merits continuing close attention.

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6.6.5 Leisure Time and Economic Change

The future of leisure time will be shaped by the wider economic context, particularly thecurrent revolutions in production and information technology. The global economy isheading towards an automated future that will provide more production with less humanlabour.

A likely consequence is more free time. Will that free time take the form ofunemployment or leisure? This question is addressed by the American economist, JeremyRifkin, in "The End of Work - the Decline of the Global Labor Force and the Dawn of thePost-Market Era", published in 1995. Rifkin notes that the dramatic productivity gains ofthe nineteenth century industrial revolution and of the electricity and oil based economieswhich developed earlier this century led to a shortening of the working week in America toaround forty hours. Some observers have suggested the inevitability of a thirty or eventwenty hour week to bring labour requirements in line with the new productive capacity ofcapital.

Yet, as Professor Juliet Schor has pointed out Americans have taken recent rises inproductivity as pay rather than leisure time. Rifkin argues that the explanation of this isthat the productivity revolution has affected the amount of time worked in two ways.Technology has allowed companies to reduce the number of their employees substantially.Employees are then obliged to work longer hours as companies find that a smaller workforce working longer hours saves employee related benefit costs and taxation.

In 1993, in response to continuing unemployment a Bill was introduced into the UnitedStates Congress to reduce the working week to thirty hours as a means of spreadingemployment among more workers and reducing unemployment and welfare costs. Thiswas successfully resisted by business on the grounds that higher labour costs would reduceinternational competitiveness. Since then strong economic growth has reducedunemployment to very low levels. Nevertheless debate continues in America over thework-life balance. The premise is that long working hours are counterproductive,demotivating for employees and do not encourage the fresh minded creativity which willbe vital to success in the knowledge-led economy of the 21st century.

In Europe, where there is still concern about high unemployment, the working hoursdebate also continues. In 1996 the European Parliament called for a reduction of workingtime, as a means of reducing unemployment and called on the European Commission toconsult all interests on the issues involved and encourage agreement on working hoursreduction. The Parliament suggested that this would stimulate strong demand for leisureand an increase in employment in leisure related industries.

In 1997 the European Commission issued a Green Paper, "Partnership on a NewOrganisation of Work", about the scope for improving employment and competitivenessthrough better organisation of work. The purpose of the Green Paper was to stimulatedebate on new forms of work organisation. The possibility that reducing working time canhelp reduce unemployment was among the issues addressed. The Green Paper suggestedthat in certain circumstances this may be so but highlighted the need for a range ofconditions to be met and noted that successful working time reductions have usually beenincorporated into long term bargaining packages which include wage moderation. Thesemake it possible to use productivity increases to reduce working time over a period of

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several years, whilst at the same time reducing the wage increases needed to offset thereduction in working time.

European employers and many economists remain sceptical that reduced working time canreduce unemployment. The shorter working hours being introduced in France and Italywill shed new light on this issue.

In Japan there has been some decline in the working week over recent years - in part toimprove the quality of life and in part to stimulate demand for leisure related goods andservices. If, as is widely forecast, the Japanese and other economies in the Asian regionexperience industrial restructuring and rising unemployment a shorter working week andincreased holiday may come to be seen as a means of countering unemployment as well asstimulating demand.

Governments throughout the world wish to reduce unemployment and recognise that infuture most new jobs will come in the service sector. So the tourism industry shouldcontinue to highlight the fact that tourism is among the fastest growing and most labourintensive of the service industries and has the potential to create many more jobs as leisureincreases.

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APPENDIX

LEISURE AND VALUE FOR TIME

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The Henley Centre2956:0698:TR

Leisure and value for time16th November 1998

Paul Edwards


The leisure society, what leisure society?Number of hours of non-working time in a week

Source: The Henley Centre, Leisure Tracking Surveys

60

61

62

63

64

65

66

67

68

1992 1993 1994 1995 1996

67.366.9 66.8

66.1

65.2

Hours

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Taking of full holiday entitlement

75

25 2722 22

5

0

10

20

30

40

50

60

70

80

Yes Pressure of work

Could not afford to go away

%Whether took full holiday entitlement Reasons for not taking full holiday entitlement

No Selfemployed

Employer doesnot encourage it

Source: PSC 98


The end of the ‘weekend’ as we once knew it% of employees sometimes or always working at weekends

0

10

20

30

40

50

60

70

80

90

100

UK Italy France Netherlands Spain Germany

57 56

36 34 34 3137

18 18 2014 16

Saturdays Sundays%

Source: Eurostat

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A society running out of time

Time

Declininghousehold size 1

12

2

3

4

56

7

8

9

10

11

Intrusivenessof mobile phone,fax, pagers etc

Variety of leisureactivities/possessions

Anxieties aboutcrime lead to car

use

Need for continuouseducation

Out-of-townwork andshopping Rising work

pressures and insecurity

Growing carefor relatives

Flexible (un-social)working hours

Growth ofself-employment

Trafficcongestion


A society running out of time

Time

Declininghousehold size 1

12

2

3

4

56

7

8

9

10

11

Intrusivenessof mobile phone,fax, pagers etc

Variety of leisureactivities/possessions

Anxieties aboutcrime lead to car

use

Need for continuouseducation

Out-of-townwork andshopping Rising work

pressures and insecurity

Growing carefor relatives

Flexible (un-social)working hours

Growth ofself-employment

Trafficcongestion

Rising numberof women in work

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Who feels time pressure?% “I never seem to have enough time to get things done”

Timefamine

Timepanic

Timerich

Timepoor

Source: The Henley Centre, Planning for Social Change 1996/97

0

10

20

30

40

50

60

70

80

90

100

1993 1994 1995 1996 Unem-ployed

House-wife

Malefull-time

Femalepart-time

Femalefull-time

53 56 5761

48

64 6672

80

%


Value for time as important as value formoney

n Time pressure

n Time as currency

- spend time- save time- invest time

- waste time

n Time deepening- eg Sport

n 33% would spend money to save time

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Families are changing

n Less couples with dependent children

n More single person households

n More divorce

n Odd shaped families


‘Quality Time’ becomes ‘Precious Time’

n The vision of family life put out by the media, and loved byeveryone is increasingly difficult to achieve:- more working parents

- parents relationship under strain- children becoming more independent

The time we spend with our Families has to be perfect

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The blurring of leisure boundariesLeisure options continue to proliferate

Eating anddrinking out

Newmedia

Sport &fitness

Entertainment

Retail

Travel &holidays

Source: The Henley Centre, Planning for Local Change 1998


Competitors for time

n Disney

n Shopping

n Cinema

n Health and Sport

n Leisure Complex

n Television

n Computers and On-line

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Teletext and holidays

n Almost 10% of holidays are booked using Teletext;

n 7 million people use Teletext every week to look at holidayselection

n Internet for selection and booking

n Reverse marketing

Source: Teletext Holiday Booking Study; NOP Page Traffic Study


Segmenting the holidayApplying the dynamics of time and money

Money

Time

Upmarket packagesExotic city breakHealth farm

Long haul travelLuxury world cruiseHomes abroad

Day outUK campingWeekend break bythe seaside

Long-term winterbreaks‘Explore’ bus tourBackpacking

Source: The Henley Centre

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changes in leisure time the impact on tourism

Documents