ByTBY| Sep 27, 2024
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A huge generator of economic returns, the largely recovered tourism sector remains an unstoppable force of indisputable weight, as explored in the latest WTTC report.
Image credit: Shutterstock / Bumble Dee
The tourism sector has come a long way since the deep freeze of COVID-19.
A United Nations World Tourism Agency (UNWTO) report indicates that international arrivals had reached 96% of 2019 figures in January-July of 2024; in contrast, travel had slumped 75% in 2020.
Typically, domestic travel rebounded from the 19 pandemic faster than international travel, and despite an initial spike in the latter, the sector expects a return to pre-pandemic conditions, with domestic travel claiming 70% of spending by 2030.
According to the UNWTO World Tourism Barometer, recovery from Pandemic blues has been greatest in Europe, which in January to July of 2024 scaled 99% of pre-pandemic numbers, followed by the Middle East, up 26% on its 2019 data. Asia and the Pacific, due to their delayed reopening, saw 82% recovery.
And according to the McKinsey Technology Trends Outlook 2024 study, domestic travel is likely to grow 3% annually to 19 billion lodging nights per year by 2030.
International travel is expected to scale its historical average of nine billion nights. In consequence, travel spending is also on an uptrend, with traveler outlays in 2024 estimated at USD8.6 trillion, accounting for close to 10% of the year’s global GDP.
The world’s top ten destination countries – including for domestic travel – (the US, Spain, China, France, Saudi Arabia, Türkiye, Italy, Thailand, Japan, and India) account for 45% of total travel spending.
Sterling Performance Set to Shake up the Rankings
The World Travel & Tourism Council (WTTC) 2024 Economic Impact Trends Report, a guide-stone for the industry, confirms the U.S. as the world’s preeminent Travel & Tourism market.
Notably, around 70% percent of all trips originating in the US remain within its borders. The sector generated a staggering—and record-breaking—USD2.36 trillion for the domestic economy in 2023.
That’s almost double its nearest rival, China, which raked in a GDP contribution of USD1.3 trillion last year, regardless of a more stubborn coronavirus experience, rising 135.8% YoY.
By economic contribution, the top-five countries were completed by Germany, third on USD487.6 billion, followed by Japan (5th in 2022) on USD297 billion. The United Kingdom came in fifth, mopping up USD295.2 billion. While India rose to 8th from 10th the WTTC forecasts it rising to fourth position over the coming decade.
Formidable annual GDP growth of 6% speaks well for the future of that source market, and the sector projects annual growth in travel spend of 95 to 2030.
Nonetheless, China is seen as becoming the greatest Travel & Tourism market. China’s domestic travel market is set for 12% annual growth on its way to overtaking the US to first place by 2030. A whopping 30% of the global hotel construction pipeline is in China, largely oriented towards the luxury market—twice that of the US.
More Numbers Worth Visiting
According to the WTTC report, some of the most popular destinations, including Saudi Arabia up 91.3% on the 2019 print, Türkiye (+38.2%), Kenya (+33.3%), Colombia (+29.1%) and Egypt (+22.9%) will capitalize on the pronounced rise in spending headed towards to pre-pandemic levels.
Visitor spending, also on the up, is forecast to be appreciating by over 15% to USD1.9 trillion, with domestic tourists projected to shell out a record-setting USD5.4 trillion, up 10.3% on 2019.
The Basics of Sustainable Appeal
Many countries keen to increase the breadth of their appeal among source markets plan to achieve this without duplicating the foibles familiar common to primary destinations, such as crass commercialization and overcrowding. As the WTTC predicted a record-breaking 2024, it stressed its prioritizing of, ‘…sustainability and inclusivity, ensuring that this growth benefits everyone and protects our planet for future generations.’
Indeed, in August 2024, the WTTC noted that 5,000 hotels in over 80 countries across Europe, Africa, the Americas, and Asia-Pacific had adopted its Hotel Sustainability Basics program. The program’s 12-step criteria form a benchmark of credibility, now adopted by major hotel brands such as Louvre Hotels Group, Choice Hotels, Radisson Hotel Group, and Accor. In one example, the WTTC has partnered with the Japan Tourism Board’s Japan Sustainable Tourism Initiative (JSTi) to vigorously launch a pilot program nationwide.
India is also due to make inroads into adoption.
U.N. tourism agency data shows that around 790 million tourists traveled internationally in the January to July period 2024 period, pointing to an 11% year-on-year rise. Meanwhile, vast investments in fixed assets continue worldwide.
One might, therefore, agree with the U.N.’s Tourism Confidence Index’s bullish expectation for the full-year performance. That said, currently overheated geopolitics and economic austerity may yet bring showers to the sector’s parade.
