Home / This Week / Cover Stories / Travel and tourism: the ever economic growing industry Travel and tourism: the ever economic growing industry Nazir Ahmed Shaikh 4 hours ago Cover Stories 1 Views Related Articles IT sector a key in new era of progress of Pakistan tourism 3 hours ago
The travel and tourism industry is an important part of the overall global economy and is particularly important in some developing nations, where it can help to reduce poverty .In 2018, the industry helped generate 10.4% of world GDP and a similar share of employment, and has shown enormous resilience over the last decade.Fueling this expansion and relative resilience is the ongoing growth of the middle-class in Asia and other parts of the world.In the coming decade, industry contribution to GDP is expected to rise by nearly 50%.
In 2016 the travel and tourism industry have a global economic contribution (direct, indirect and induced) of over 7.6 trillion US dollars.The direct economic impact of the industry, including accommodation, transportation, entertainment and attractions, was approximately 2.3 trillion US dollars that year.A number of countries, such as France and the United States, are consistently popular tourism destinations, but other, less well-known countries are quickly emerging in order to reap the economic benefits of the industry.
Worldwide, the tourism industry has experienced steady growth almost every ear.International tourist arrivals increased from 528 million in 2005 to 1.19 billion in 2015 and the global international tourism revenue reached approximately 1.26 trillion US dollars, having almost doubled since 2005.
That year, China had the largest international tourism expenditure, followed by the United States and Germany.The leading city in international visitor spending was Dubai, where tourists spent more than 31.3 billion US dollars in 2016.
Figures were forecasted to exceed 1.8 billion by 2030.Each year, Europe receives the most international tourist arrivals.It also produces the most travelers: with approximately 607 million outbound tourists in 2015, the region had more than double that of the second largest tourist origin, the Asia Pacific region.
The global hotel industry generates approximately between 400 and 500 billion US dollars in revenue each year, one third of that revenue is attributable to the United States.Countries such as the US, France, and Spain fight over leadership in this sector with the aim of positioning themselves as the world’s first tourist power, which to say the least, is a very profitable objective.
The tourism industry not only generates revenues for a country and cultural wealth, but it is also one of the most important economic engines for growth and development.
Globalization, as well as diplomatic relations among countries, has made traveling increasingly common.That is, the percentage of the world population that requires an entry visa to visit foreign destinations decreased from 75%, in 1980, to 53%, in 2018.The result is that more and more people travel from one country to the other on a recurring basis, which has increased the frequency of leisure travel from 50 to 56%, according to a report of the World Tourism Organization (UNWTO).
Tourism is a great source of income and employment for countries that receive more tourists, which has had a significant impact on the main economies of the world.
For this reason, many countries have increased their investment in the tourism industry, including several campaigns and strategies to highlight the attractiveness of their main destinations.This current state of tourism has benefited all continents of the world, growing in the number of arrivals year after year.
Tourism, in short, has become a fundamental pillar for the economic growth of all countries, accounting for a good portion of the world’s GDP.Despite the time, the tourism industry has not lost that dynamism that allowed it to grow exponentially over the years.
According to the latest data published by the World Travel and Tourism Council (WTTC) , the tourism industry accounts for 10.4% of the world’s GPD, making it one of the largest economic sectors worldwide.With 8.8 trillion US dollars, tourism establishes itself as one of the fastest-growing industries of the world, being surpassed only by the manufacturing sector.Even so, it is far ahead of other important sectors such as financial services, health or technology.
Despite the major crises that have shaken the economy, tourism is an industry that has always been seen as ‘a safe bet’.
What this means is that, while other sectors contracted before the growing uncertainties or shocks that damaged the economy, tourism has been able to grow continuously without setbacks, a positive trend that has defined it as the industry that grows the most in relation to the average recorded by the other sectors that make up the global economic activity.
Tourism is becoming one of the most profitable growth engines for the global economy, so leadership in the sector is being disputed among the major countries, which struggle every year to attract more and more tourists to their territories.
According to the UNWTO “International Tourism Highlights” report, tourism generates more than 5 billion US dollars a day.In turn, total revenues from international tourism worldwide, including passenger transport , were 1.7 trillion US dollars in 2018, with over 1.4 billion international arrivals registered across the globe.
As expected, economic growth is made up of many factors that, when analyzed separately, make the tourism industry more attractive.According to the WTTC report, as of 2018 (the 2019 report has not been published yet), tourism employs 319 million people, and it is expected that this figure will reach 421 million by 2029.
This means that tourism is not only a growing economic engine but also an employment engine in itself, since it is the industry with the best evolution in terms of job creation, just behind the manufacturing sector.
In the world, 20% of the jobs that have been generated over the past 5 years have been directly related to tourism.This has caused that, in addition, 10% of the workers in the world are employed in the tourism sector.It is, in fact, a source of employment that not only generates and employs a large workforce but also does it in an inclusive manner and with great opportunities for both genders, even creating job offers for the youngest.According to data from the “International Perspectives on Women and Work in Hotels, Catering and Tourism” report carried out by Cornell University, worldwide and on average, 55.5% of employees in the tourist industry are women.
In summary, and to get an idea of the magnitude, in OECD countries such as Spain, tourism represents about 15% of its GDP.
For other European countries, such as France or Portugal, tourism accounts for 7.3% and 13.7% of GDP, respectively.In Latin American countries, such as Mexico, tourism already represents 8.7% of GDP.On average, this industry accounted for 4.1% of the GDP of the OECD member countries in 2018, as well as 6% of the employment .
Considering this large contribution over time, no country can be indifferent to tourism seeing how it has become one of the fundamental pillars of economic growth and development.
The advent of technology is fostering a change in the travel and tourism industry regarding how companies interact with customers.Consequently, travel companies are adopting various technologies to improve operational efficiencies and meet customers’ expectations.
The trends to watch out for in the travel and tourism industry in 2018 are: Augmented and Virtual Reality (AR and VR): The past few years have seen an increase in AR or VR popularity among travel and tourism companies, and the trend is set to continue.These technologies are being used either for content marketing or to enhance the customers’ experiences.For example, airlines have started using VR technology to show travellers the cabins in advance, in order to increase ticket or ancillary services sales.Artificial Intelligence (AI): AI is behind many evolving technologies and innovations in the travel and tourism sector.The ways in which it helps the industry can be classified into three major categories: Machine Learning, ChatBots or TravelBots, and Robots.Thanks to AI, operations which usually require human intervention and a lot of time to learn new skills can be automated, thus speeding up processes, while improving quality and performance, and decreasing costs.Internet of Things (IoT): IoT has a lot of potential to shape the future of the travel and tourism industry, and companies have started to realize that.An example of an industry player using IoT to reduce anxiety and stress levels associated with lost bags is Lufthansa.
Passengers can track their baggage via a link found on their mobile boarding pass in the Lufthansa app.Voice Technology: Voice technology is another digital novelty that is beginning to disrupt the travel and tourism sector, as more and more customers switch from typed-in search to voice interactions.More and more hotels have started experimenting with voice-activated devices.Wi-Fi connectivity: When travelling, people want to always be connected, either to get destination ideas, options regarding places to visit or eat, find directions to points of interest, or share their experience with friends via social media or other connectivity platforms.As a result, investing in network services helps companies offer a more seamless and highly personalized experience to customers, boosts operational efficiency, real-time decision making, strengthens the physical (via CCTV) and the cybersecurity , along with data privacy.Wearable devices: Despite a sluggish start, travel and tourism companies are gradually using this technology to offer customers a more personalized and united experience.For instance, the Walt Disney Company deployed a wearable, customizable, RFID-equipped Magic-Band, which connects to the theme park infrastructure, to reduce waiting times and track guests’ locations and activities.
Another is Block Chain , specifically crypto-currencies.This nascent technology, which allows for decentralized and secure storage and sharing of information, has the potential to increase trust while minimizing friction and corruption.
In conclusion, the travel and tourism industry is very important for most countries in the world, having a prime place in the economy due to the high income it brings.
Tourism development policies in the world are increasingly important for developing countries.Not only have they introduced a new sector into the country’s economy, but they have achieved macroeconomic objectives.That is why most countries concentrate their efforts on attracting foreign tourists, in order to increase the country’s foreign reserves .The author, Mr.Nazir Ahmed Shaikh, is a freelance columnist.He is an academician by profession and writes articles on diversified topics.
Currently he is associated with SZABIST as Registrar and could be reached at .
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