Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24
Stock Market Breadth - 24th Mar 24
Stock Market Margin Debt Indicator - 24th Mar 24
It’s Easy to Scream Stocks Bubble! - 24th Mar 24
Stocks: What to Make of All This Insider Selling- 24th Mar 24
Money Supply Continues To Fall, Economy Worsens – Investors Don’t Care - 24th Mar 24
Get an Edge in the Crypto Market with Order Flow - 24th Mar 24
US Presidential Election Cycle and Recessions - 18th Mar 24
US Recession Already Happened in 2022! - 18th Mar 24
AI can now remember everything you say - 18th Mar 24
Bitcoin Crypto Mania 2024 - MicroStrategy MSTR Blow off Top! - 14th Mar 24
Bitcoin Gravy Train Trend Forecast 2024 - 11th Mar 24
Gold and the Long-Term Inflation Cycle - 11th Mar 24
Fed’s Next Intertest Rate Move might not align with popular consensus - 11th Mar 24
Two Reasons The Fed Manipulates Interest Rates - 11th Mar 24
US Dollar Trend 2024 - 9th Mar 2024
The Bond Trade and Interest Rates - 9th Mar 2024
Investors Don’t Believe the Gold Rally, Still Prefer General Stocks - 9th Mar 2024
Paper Gold Vs. Real Gold: It's Important to Know the Difference - 9th Mar 2024
Stocks: What This "Record Extreme" Indicator May Be Signaling - 9th Mar 2024
My 3 Favorite Trade Setups - Elliott Wave Course - 9th Mar 2024
Bitcoin Crypto Bubble Mania! - 4th Mar 2024
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Clues to the Health of the World Economy from Tourism Trends

Economics / Global Economy Mar 05, 2013 - 11:05 AM GMT

By: Andrew_Butter

Economics

U.S. Outbound and Dubai-Inbound Compared - Leaving aside the hangover from the debt bubble, not yet even half cured  by the cocktail of QE flavored with the bitter spice of austerity…life goes on.

One way to get a feeling for the pulse of the economy that exists outside of borders, literally, in the stratosphere, or close-by, is to look at how much of that apparently soon-to-be-worthless fiat-money real-people are spending on travel internationally.


A convenient timeline can be found on the BEA database of International Transactions, they have a line (#24) which records how much money Americans handed over to foreigners (they call them “aliens” in over there), so that they can fly out of America.

Armageddon or not, that chart suggests either the price of oil drives tourism (and business) travel, or the other way around, or they are both driven by the same thing. Or could that just mean that rich people (bankers perhaps) are doing OK, while those left behind suffer?

It’s a similar story in Dubai:

Interesting that in Dubai oil tanked in 2008, just before the “message” got through to the revelers, perhaps over there oil-prices drove the market? A possible reason REVPAR did not bounce as far as in the outbound from USA (different market), might be because the 1,500 room Atlantis Hotel opened in September 2008 (a less auspicious moment to open a huge hotel cannot be conceived), that added about 30% to supply; take that out of the equation and the bounce would have been as high as the bounce-back in U.S. Outbound.

It’s going to be interesting to see whether (a) whatever drives tourism/travel, is driving oil, in which case oil is not a bubble now, or (b) if not, then how a drop in oil prices, which is likely if oil is a bubble, will affect revenues in the international tourism sector.

Stock prices of the big hotel chains are intriguing though:

The start of the crash in international hotel stock prices started along with the start of the decline of the stock markets, the bottom though coincided exactly with the bottom in oil-prices which preceded the bottom in stock prices by about a month.

The pull-back pretty much followed oil prices (and stock prices), Starwood had a more exciting ride, probably because more of their earnings come from outside U.S.A.

Perhaps hotels have the pulse on where the “other” world economy is headed?

By Andrew Butter

Twenty years doing market analysis and valuations for investors in the Middle East, USA, and Europe. Ex-Toxic-Asset assembly-line worker; lives in Dubai.

© 2013 Copyright Andrew Butter- All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Andrew Butter Archive

© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in