Travel & Tourism‘s contribution to the global economy reached a high annual rates. Tourism sector generated US$7.6 trillion (10% of global GDP) and 277 million jobs (1 in 11 jobs) for the global economy in 2014.
Travel & Tourism is a significant economic activity in most countries around the world. This industry generates considerable economic benefits to both host countries and tourists’ home countries. Economic improvement is one of the main motivations for a region to promote itself as a tourism destination, particularly in developing countries.
The economic importance of tourism can be measured by looking at the ratio of travel receipts relative to GDP. Taking its wider impact into account, Travel & Tourism sector experienced one more successful year in 2014. There was noted a strong economic conditions globally. World GDP growth increased from 2.3% in 2013 to 2.4% in 2014. The direct GDP contribution of Travel & Tourism grew by 3.5%, up from 3.4% in 2013.
Indicators of the various sectors confirm that Travel & Tourism operation in the global economy was robust in 2014. Findings of measured hotel performance revealed a higher occupancy and average daily rates in almost all regions. Demand of the international air services (measured according to the revenue of the passenger traveled kilometres) grew by around 6% up from growth of 5.4% in 2013. According to the latest UNWTO World Tourism Barometer International tourist arrivals reached 1,138 million in 2014, a 4.7% increase over the previous year. Down warding pressure on air fares from lower oil prices should push further the growth of international air travel materialises in next year. For 2015, UNWTO forecasts international tourism to grow by 3% to 4%, further contributing to the global economic recovery.
Goods and services of the tourism sector generate income to the host economy and can stimulate the investment necessary to finance growth. Travel & Tourism investment in 2014 was 4.3% of total investment. Some countries aim to accelerate tourism expenditures, the export and import by requiring visitors to bring in a certain amount of foreign currency for each day of their stay and do not allow them to take it out of the country again at the end of the trip. Money spent by foreign visitors to a country is a key component of the direct contribution of Travel & Tourism in economy of the country. In 2014, visitor exports generated 5.7% of total exports.
Improving tourism sector is also good for labour market. The rapid extension of international tourism has led to significant employment growth – 2.1 million new jobs were generated directly in this sector in 2014. Tourism creates and generates jobs directly through hotels, restaurants, nightclubs, taxis, and souvenir sales, and indirectly through the supply of goods and services needed by tourism-related businesses. In total 6.1 million new jobs were created as a result of total direct, indirect and induced activity of the tourism sector.
During the Spain Global Tourism Forum in Madrid, UNWTO Secretary-General, Taleb Rifai, said that: “Over the past years, tourism has proven to be a surprisingly strong and resilient economic activity and a fundamental contributor to the economic recovery by generating billions of dollars in exports and creating millions of jobs. This has been true for destinations all around the world, but particularly for Europe, as the region struggles to consolidate its way out of one of the worst economic periods in its history,”
However, Travel and Tourism sector faces challenges which are the main factors of decreased attraction as a tourism destination of the some countries. World GDP growth of 2.4% was weaker than the 3.0% originally expected. Latin America, Japan, Mexico and Russia were the main sources for the world GDP downgrade. Ukraine-Russia conflict, Ebola in West Africa and political instability in Thailand were unexpected developments contributed in the reduction of the global economy rates. Also countries like Syria, Libya, Nigeria and Kenya remained highly unstable in terms of increased terror attacks in 2014. Dr. Peter E. Tarlow, well known as an expert specializing in such areas as: the impact of crime and terrorism on the tourism industry and economic development, said that ‘Tourism rates are often determined by a basket of factors, one of which is security. A rate drop may depend on how much publicity the attack receives, where the attack occurs, and the story’s lifespan.‘. Regardless improved visitor exports, Eurozone crisis remain a huge negative impact on economic situation. A lot of countries has lower rates of the visitor exports comparing with the levels before the onset of the global recession and Eurozone crisis.
Consequently, Travel and Tourism’s direct, indirect and induced economic impacts can be enormous by opening it up for business, trade and capital investment, creating jobs and entrepreneurialism for the workforce. As it is forecasted that falling oil prices will have a significant improvements for conditions of life quality related with living costs, increasing disposable household incomes, domestic consumer spending, and lowering air fares, this will influence Travel & Tourism contribution to GDP (expected to increase by 3.7%) next year.
With reference to these data, we predicate that new destinations and investment opportunities will generate tourism services and will make it more accessible across the developing world. Furthermore, a strong economic impact of the Travel & Tourism will force the countries to balance planning, management and development parts between tourism industry, governments and global economy to ensure potential economic impact of the tourism globally.