Travel and tourism is one of the world’s most important sectors and employers and has been one of the leading growth sectors since the World Travel & Tourism Council (WTTC) first started measuring the industry’s economic impact 20 years ago.
“But, as was the case with other sectors, it was hit hard by the credit and housing market collapses last year that triggered the deepest recession since the Great Depression,” said Jean-Claude Baumgarten, WTTC’s president and CEO, launching the council’s annual research results.
World GDP fell by 2.1 per cent in real terms, with developed economies the most severely affected. Households curtailed leisure travel plans, substituting lower-cost short-haul and domestic travel for more expensive long-haul trips, and corporations reduced business travel budgets.
The global travel and tourism economy GDP declined by 4.8 per cent in 2009 causing the loss of almost 5 million jobs – or 5.6 million since 2008. All regions experienced significant contractions in visitor arrivals, spending and travel and tourism economy GDP and travel and tourism investment declined by more than 12 per cent. Only residents’ spending on domestic trips increased and that was by a mere 0.7 per cent in real terms.
Nevertheless, even in such a depressed year for activity as 2009, the industry still employed more than 235 million people across the world – 8.2 per cent of all employment – and generated 9.4 per cent of world GDP.
The global economy has now moved into a recovery phase but Baumgarten warned: “Despite recent encouraging short-term indicators of tourism activity, the recovery in world travel and tourism is expected to be muted with both firms and households examining travel plans carefully and continuing to limit expenditure.
“Spending in real terms is expected to increase by a mere one per cent – while business travel spending will again decline, by nearly two per cent.”
Given current credit conditions and delays in restarting large projects, travel and tourism investment is also expected to decrease for the second consecutive year, by 1.7 per cent. Thus, travel and tourism economy GDP is forecast to grow by just 0.5 per cent in 2010 overall. But stronger second-half momentum will continue into 2011 to boost growth next year to 3.2 per cent.
In the longer run, travel and tourism will sustain its leading role in driving global growth, creating jobs and alleviating poverty. Emerging economies, in particular, are expected to be engines of growth, boosting international travel – with China alone set to provide almost 95 million visitors for other destinations by 2020 – and also generating an increasingly vibrant domestic travel sector.
“But developed economies will continue to dominate global travel and tourism for the foreseeable future,” Baumgarten noted. While many are mature markets reaching a ceiling in terms of propensity to travel, a growing preference for, and priority focus on, leisure is expected to provide clients for new destinations once consumers fully regain confidence.
“The popularity of short breaks – both domestic and international – will continue to increase. And innovation by the industry will create new products and markets,” he said.
Overall, the travel and tourism economy is forecast to grow by 4.4 per cent per annum between 2010 and 2020, supporting more than 300 million jobs by 2020 – 9.2 per cent of all jobs and 9.6 per cent of global GDP. This confirms that travel and tourism will continue to grow in importance as one of the world’s highest-priority sectors and employers.