In our disturbing times where newspaper headlines scream terrorism, the rise of populism, North Korea’s nuclear threat and the war in Syria, there is one piece of good news that might have easily been overlooked.
Last year, the GDP growth of travel and tourism outpaced that of the global economy at 3.3 per cent, against 2.5 per cent. The sector generated US$7.6 trillion worldwide, which is 10.2 per cent of global GDP, when the direct, indirect and induced impacts are taken into account. It supported a total of 292 million jobs, or one in 10 of all jobs in the world. Global visitor exports, or money spent by foreign visitors, accounted for 6.6 per cent of total world exports, and almost 30 per cent of total world services exports.
No one is happier about this than David Scowsill, the President and CEO of the World Travel & Tourism Council (WTTC), which released the Economic Impact Report 2017 conducted in conjunction with Oxford Economics.
“This is the sixth year in a row that Travel & Tourism has outpaced the global economy, showing the sector’s resilience, and the eagerness of people to continue to travel and discover new places, despite economic and political challenges across the world.”
As an investor, this is one sector you will be foolish to ignore. According to Scowsill, there are opportunities to be had in putting your money into a country’s infrastructure. On one hand, it is to accommodate the influx of visitors; on the other hand, it is also supporting banking services, mobile phone penetration, and health and hygiene services.
If you need to know where exactly, here’s a cue: Southeast Asia was the region with the fastest growing Travel & Tourism sector in 2016 (8.3 per cent), driven by the expanding Chinese outbound market and the countries own growing markets. Following closely is South Asia and North East Asia at 7.9 and 4.6 per cent respectively.
“Travel & Tourism is a force for good, it brings people from different cultures closer together, helps people to overcome the fear of the unknown, offers many people in the world a form of relaxation, and gets business done,” says Scowsill, when asked how the sector performed so well despite the negative global economic climate.
“Travelers are extremely resilient and will continue to explore despite turmoil or economic downturn. We see that many households will put other costs on hold in order to go on holiday.”
Still, while the outlook is hugely positive, the sector has its challenges. Scowsill says there is a serious responsibility to decouple the growth of the sector from its impact on the environment, through implementing the right policies to safeguard tourism assets.
“For example, if certain places are in danger of overcrowding we encourage putting visitor caps in place, or thinking about solutions through which the tourists that visit can actually help sustain or rebuild the environment and cultural heritage.
“Furthermore, we believe it is of extreme importance that the income generated by tourism is invested back into the local communities. This will help stimulate empowerment, jobs, and therefore the country’s economy.”
With travel and tourism expected to grow at an average of 3.9 per cent per year over the next decade in 2017, it will be prudent for governments and tourism authorities to take heed of Scowsill’s advice.