1. Introduction

Gay people are often portrayed as a valuable niche market for businesses, particularly those in travel and lifestyle. Gay people, often in partnerships with no children and two careers, in general have greater disposable income and greater time to spend it.

Although there is long standing research into the scale and trends of gay spending in America, across Europe as a whole, evidence is patchy.

This study, based upon existing research and extrapolation, provides an estimate, for the first time, of the number and value of gay European tourists as a niche market. This is particularly important for businesses and investors who seek to include this group of tourists in their marketing mix.

Use of this study

The findings of this study can be used at no charge but must be credited to Gay European Tourism Association (GETA). Research used in this study to extrapolate findings are acknowledged and must be credited to their sources if used.

2. Summary of findings

Europe (including Western Europe, Central Europe and Eastern Europe) has a population of 844 million people, roughly two and a half times the size of the United States of America.

Although there are no detailed studies of the size of the out gay population in Europe, we estimate it to be around 22.6 million (2.6% of the population) with the prevalence of out-gay people being greater in Western Europe, lesser in Central Europe and lowest in Eastern Europe for social, cultural and religious reason.

We estimate that the total annual expenditure by out-gay European people on tourism is between 48-52 billion euros (£39-£42 billion or $63-$68 billion).

This compares with the estimate of annual tourism expenditure by out-gay Americans of 49 billion euro (£40 billion or $64 billion) from a total USA population of 311 million.

We estimate that the total annual expenditure by gay Israeli and Lebanese tourists is 0.19 billion euros (£0.16 billion or $ 0.25 billion).

Europe also attracts inbound gay visitors, particularly from North America, South America and Australia, but increasingly from China and other Asian countries. We estimate that the total value of the gay tourism market worldwide to be around $200 billion).

3. Definitions

Within this document the word gay is used to include homosexual men and women, bisexual and transgender people.

There is discrepancy between the estimated numbers of people who have sex with members of their own sex and those who class themselves as gay. Personal, social and religious issues mean that many who have sex with members of their own sex do not class themselves as gay and as a result they do not class themselves as part of a wider gay community. In this document we are assuming that the size of the gay population and the amount it spends on tourism relates to those who class themselves as gay. We call these the out-gay community.

Throughout this document we look at the value of out-gay tourism. By this we mean the money spent by out-gay people on leisure tourism which includes flights, other transport, accommodation, meals, entertainment, shopping and other related leisure expenses.

This study refers to the estimated expenditure by European out-gay people on tourism and this is spent both in Europe and worldwide. This, combined with the estimated expenditure on tourism of out-gay people from outside Europe, gives the total potential value of the gay tourism market. The amount of this that is spent in Europe will depend, year on year, on the attractiveness of Europe to gay tourists.

4. Research Aims

The study has three aims -

1. To provide estimates of the size of the out-gay community throughout Europe both absolute and as a proportion of the overall population
2. To provide estimates of the expenditure by the out-gay community in Europe on tourism
3. To provide estimates on the expenditure on tourism from gay visitors from outside the continent

5. Research methodology and findings

5.1 Population size of Europe

Methodology

First, the scale of Europe was a determined. In its broadest sense Europe stretches from the Atlantic coast of Ireland in the West to the Ural mountains at the eastern boarder of the Russian Federation. It incorporates 50 states, 27 of which are members of the European Union.

We have split the continent into three sectors which share common characteristics.

• Western Europe (Western European countries that fell outside the sphere of Soviet influence);
• Central Europe (European Countries that were former soviet satellite states between Western Europe and the Soviet Union); and
• Eastern Europe (former soviet states plus Turkey)
  

We collated the populations of every country within each sector to produce figures for the sectors and Europe as a whole.

Details of the countries in each sector and their populations are given in the appendix.

Findings

5.2 Estimated out gay population in Europe

Methodology

There are no official figures relating to the size of the openly gay population in any particular countries. Attempts to seek the information in official surveys have proved to be unreliable (for example in 2010 the UK Office of National Statistics estimate of 1.5% of the population – or 725,000 people - was demonstrated to be wrong when it was pointed out that over 2 million British citizens were members of a popular gay dating website.) The UK government in 2005 assumed the openly gay community to be 6% of the population when calculating the impact of benefit changes.

Any attempt to put a figure on the openly gay population (as opposed to the proportion of homosexual people) can therefore only be an estimation.

The openly gay population of a country depends on a number of factors, in particular social and religious mores.

Most Western European countries have adopted more open and tolerant attitudes to homosexuality encouraging a greater proportion of the population to identify themselves as gay. This is less so in Catholic countries such as Spain and Italy.

In Central Europe there is a mix with countries at different stages of social and economic development. We therefore believe that the proportion of openly gay people is smaller. However membership of the European Union, with its equality laws, is moving social attitudes faster than otherwise might be expected.

In Eastern Europe, which includes Turkey and states from the former Soviet Union, where there are, for example, many Muslims, it is more difficult to be an out homosexual and the proportion of the population that is openly gay is far less than in the rest of Europe.

A figure of 10% is widely used in western countries for the number of homosexual people in a population, based largely on the findings of Kinsey’s studies on human sexuality in the USA in the 1940s and 1950s. However, this is different from the number of people who live an openly gay life.

For the purpose of this report, we have assumed a figure of 5% to represent the proportion of the population that are openly gay for western European countries. We have assumed a figure of 1% for central European countries and just 0.25% for Eastern European countries. We believe this is a conservative estimate.

The official population of each country includes every person of ever age. Clearly, the proportion of out gay people will vary between different generational cohorts (we assume that there will not, for example, be many out gay children). The percentage assumed therefore is an average across the population as a whole.

Findings

This gives the following estimates:

5.3 Estimated expenditure on tourism by out gay Europeans

Methodology

Two studies have been undertaken which provide different basis for estimating the value of expenditure on tourism by openly gay people. We have extrapolated from each of these separately and used a comparison of the results to test the validity of the findings.

Methodology for Study One

Study One – Community Marketing

The San Francisco based Community Marketing is one of the world’s leading researchers in gay market trends. It has conducted 15 annual surveys of the tourism behaviour of gay American people, interviewing over 4,500 out gay people each year in the United States. Details of their research can be seen at www.communitymarketinginc.com. Community Marketing estimate that gay Americans spend $64 billion on tourism annually.

Taking the American figure as our base we can estimate the level of spending on tourism by out gay Europeans in each sector by comparing the relative size of the out gay population, average GDP per head and the size of the population.

We have also considered the relative propensity to travel. We assume that this will be similar to the USA in Western Europe and less in Central and Eastern Europe, although there is no evidence to support this. However, we do not believe that this is a significantly large issue and have not included it in our calculations.

Our formula will be :

Gay expenditure on tourism for a sector = (proportion of population of sector that is openly gay divided by proportion of population of the USA that is openly gay) multiplied by (GDP per head in sector divided by GDP per head in USA) multiplied by (population of sector divided by population of USA) multiplied by $64 billion.

Findings for study one

Western Europe:

• Assumption 1 - proportion of the population that is openly gay is similar in the USA as in Western Europe (i.e. 5%)
• Assumption 2 – GDP per head in USA is $ 47,000 (IMF 2010) and GDP as an average of the major 5 Western European Countries is $33,000 (IMF 2010)
• Assumption 3 – Population of USA is 311 million. Population of Western Europe is 413 million.
• Estimated expenditure = (5/5) x (33/47) x (413/311) x $64 billion= $60 billion.

Central Europe

• Assumption 1 - proportion of the population that is openly gay in Central Europe is one fifth of the proportion in USA (i.e. 1%)
• Assumption 2 – GDP per head in USA is $ 47,000 (IMF 2010) and GDP as an average of the major 5 Central European Countries is $17,000 (IMF 2010)
• Assumption 3 – Population of USA is 311 million. Population of Central Europe is 128 million
• Estimated expenditure = (1/5) x (17/47) x (128/311) x $64 billion = $2 billion

Eastern Europe

• Assumption 1 - proportion of the population that is openly gay in Central Europe is one twentieth of the proportion in USA (i.e. 0.25%)
• Assumption 2 – GDP per head in USA is $ 47,000 (IMF 2010) and GDP as an average of the major 3 Eastern European Countries is $13,000 (IMF 2010)
  
• Assumption 3 – Population of USA is 311 million. Population of Eastern Europe is 303 million
• Estimated expenditure = (1/20) x (13/47) x (303/311) x $64 billion = $0.9 billion

Whole of Europe

• Estimated total expenditure by gay Europeans of tourism = $60 billion + $2 billion + $0.9 billion = $62.9 billion

Methodology for Study Two

Study Two – Out Now Consulting

Out Now Consulting is a leading gay marketing company which has undertaken a major worldwide survey of gay trends, including a number of countries in Western and Central Europe. Over 40,000 out-gay people from 14 countries took part in the survey. You can see more about this research at www.outnowconsulting.com

Western Europe

Out Now estimated the gay tourism expenditure of the gay population in France ($11.5 billion), Germany ($11.4 billion), Italy ($8.5 billion), Netherlands ($2.5 billion), Spain ($6.4 billion) and the UK ($9.3 billion). This gives a total expenditure of $49.7 billion. The population of these countries is 334 million, therefore representing 81% of the population of Western Europe.

We can extrapolate, therefore that the total gay tourism expenditure in Western Europe is $61.3 billion.

Central Europe

Out Now estimated that the gay tourism expenditure for Poland is $3.7 billion

Poland’s population is 38 million, representing 30 % of the population of Central Europe.

We can extrapolate therefore that the total gay tourism expenditure in Eastern Europe is $12 billion.

Eastern Europe

Out Now has no estimate for countries in Eastern Europe. However, taking the figure for Central Europe and adjusting to take account of the relative size of the out gay population, average GDP per head and the size of the population we can extrapolate an estimate for the size of the gay tourism expenditure.

• Assumption 1 - proportion of the population that is openly gay in Eastern Europe is one quarter of the proportion in Central Europe (i.e. 0.25%)
• Assumption 2 – GDP per head as an average of the major 5 Central European Countries is $17,000 (IMF 2010) and GDP as an average of the major 3 Eastern European Countries is $13,000 (IMF 2010)
• Assumption 3 – Population of Central Europe is 311 million. Population of Eastern Europe is 303 million
• Gay travel expenditure in Eastern Europe = $12 billion x (1/4) x (13/17) x (311/303) = $2.3 billion

Whole of Europe

Estimated total expenditure by gay Europeans on tourism = $61.3 billion + $12 billion + $2.3 billion = $75.6 billion.

Comparisons of extrapolations from Study 1 and Study 2.

In the main gay sector of Western Europe, the two studies produce very similar results.

In Central Europe there is a difference and since we use the results of study 2 in central Europe to extrapolate the results in Eastern Europe, this difference continues through.

The difference in results in central Europe when extrapolating the two studies can be explained by the difference in development of central European countries. It could be argued that Poland, as the largest and most modern of the Central European Countries with a GDP per head far higher than every other central European country (with the exception of Slovenia which has a population of just 2 million to Poland’s 38 million) is not representative of the other, smaller countries. Therefore using the figure for gay tourism expenditure in Europe as an average for the whole of Central Europe will lead to an distortion. Allowing for this we could halve the Central European expenditure in Study 2 and consequently half that of Eastern Europe.

This would result in a total of $62.9 billion (Study 1) and $68.4 billion (Study 2). The proximity of these two figures gives some confidence that this is around the total expenditure by out gay people in Europe on tourism.

On current exchange rates (Oct 2012) we estimate that the total annual expenditure by gay European people on tourism is between 48-52 billion euros (£39-£42 billion or $63-$68 billion).

5.4 Estimated expenditure on tourism by out gay people in Israel and Lebanon

We have included these two countries in GETA and Gay Welcome. They have thriving gay communities and, although geographically are in the Middle East, they are sometimes grouped in with Europe (the Middle East does not have a culture of open homosexuality). They are within the IGLTA’s European region and Israel is in the Eurovision Song Contest.

The total population of Israel and Lebanon is around 12 million. Making the same assumptions as we have for Central Europe we would estimate that the gay tourist expenditure in these countries is:

(1/5) x (24/47) x (12/311) x $64 billion = $0.25 billion

On current exchange rates (Oct 2012) we estimate that the total annual expenditure by gay Israeli and Lebanese tourists is 0.19 billion euros (£0.16 billion or $ 0.25 billion).

5.5 Estimated expenditure on travel by out gay people from other regions

In addition to the market of out gay people in Europe, Europe remains the world’s number one regional destination for all tourists worldwide. Six of the world’s top ten tourist destinations by arrivals and receipts are in Europe (UNWTO World Tourism Barometer, September 2010). Europe attracts many gay people from around the world and therefore the value of the spending by out gay people from other parts of the world needs to be taken into account when looking at the potential value of the gay tourism market in Europe.

The main regions from which gay tourists visit Europe are North America, South America, Japan and Australia. There is less travel from openly gay people from Africa, much of Asia and the Middle East where homosexuality is generally less open, particularly where it is illegal or culturally frowned upon.

Community Marketing and Out Now Consulting have estimated the expenditure by out gay people in the main countries in these areas. These are:

On current exchange rates (Oct 2012) it is estimated that the total annual expenditure by out gay tourists from outside Europe is 86 billion euros (£70 billion or $112 billion).

This is a conservative estimate since it does not include all countries in these regions.

6. Conclusions

It is important for interested businesses and investors to understand the size and value of the gay tourism market in Europe.

In the absence of research across the whole region estimates have to be made by extrapolating from available research.

We have extrapolated from two independent sources of research to estimate separately the total value of the out gay tourism market.

We accept that there are difficulties in having to make a series of assumptions upon which to base our calculations. This is made more difficult by the nature of the subject and the problems that this can cause is identifying out gay people, particularly outside Western Europe.

However, even with these caveats, both sets of calculations reach very similar conclusions. In addition the results seem to be in line with more empirical research on the subject in the USA. We are therefore confident that the value of the out gay tourism market in Europe is between 49-52 billion euros (£39-£42 billion or $63-$68 billion).

In addition, there is a huge market of out gay tourists from other regions in the world that it is estimated to be in excess of 86 billion euros (£70 billion or $112 billion).

Appendix

Populations by country:

All figures are taken from official national estimates and census data: