WTTC’s Travel & Tourism Economic Impact 2023 Global
Trends Report forecasts robust 11.5% growth in investment in 2023, amounting to
$955bn, with a return to pre-pandemic levels anticipated by 2025. By 2033, WTTC
forecasts a promising 6.1% average annual growth globally, with the strongest
annualised growth rates projected to be in Asia-Pacific and the Caribbean.
However, the global hike in interest rates creates
challenges for future investment. With central banks increasing interest rates
to combat rising inflation, the cost of borrowing and products increases.
tradearabia.com reports that higher interest rates could
present a risk to future investment in the sector so it’s crucial that the
public and private sectors work together to innovate to ensure the continual
strengthening of this vital sector, it said.
From 2010 to 2019, investment grew steadily at 4.3% CAGR,
growing from $754.6 billion in 2010 to $1.1 trillion in 2019, or 4.5% of all
economy-wide investment. Covid-19 hit hard, leading to a 24% decline in 2020
and a further 8% in 2021. However, 2022 marked a turning point, said the
report.
Spurred by the global phenomenon of pent-up demand, travel
& tourism investment surged to $856bn, up 11.1% from the previous year.
Although this was 22.5% short of 2019 levels, this was still 53% higher in
2022, than it was in 2000.
In regions like Asia-Pacific and Africa, 2022 investment was
161% higher than in 2000, while Europe and the Middle East have shown more
restrained growth.
In these regions, the pandemic has undone much of the
significant growth achieved in the last two decades. Nevertheless, travel &
tourism investment in these regions in 2022 stayed above the levels seen in
2000, the report said.
The US leads the top 10 markets in terms of absolute
investment in the sector in 2022 with $213bn, showing a sector ready to thrive
once again.
China trails with a $146bn investment in 2022, with Saudi
Arabia rounding out the top three with a total investment of $42bn in the same
year.
Island destinations lead the top spots for travel &
tourism investment as a total percentage share of their economies in 2022.
The US Virgin Islands lead the way channelling 35% of total
economic investment into travel & tourism, followed closely by Antigua
& Barbuda at 34% and Aruba at almost 32%.
Private investment in new aircraft, hotels, and car fleets
is essential for boosting the sector’s capacity. Public investment complements
this growth, and together the combined investments create a powerful synergy.
The ripple effect is more jobs, bigger economies, and stronger communities.
Julia Simpson, WTTC President & CEO, said: “Investment
in Travel and Tourism is not just a numbers game; it is the heartbeat of global
connectivity and economic revival. Despite the setbacks from the pandemic,
2022’s growth is a promising sign of what’s to come.
“Investment in Travel & Tourism is integral to the
world’s recovery and growth. The sector’s resilience and potential for
innovation continue to drive us forward. We remain confident, yet vigilant, in
our pursuit of a brighter, more connected global future.” -TradeArabia News
Service
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