TravelBiz Monitor

Data & Analysis

Thursday, 11 July, 2019, 15 : 18 PM [IST]
Growth of T&T at 3.9% outperformed global economy in 2018: WTTC

Travel & Tourism (T&T) is a predominant sector in any flourishing economy. It directly and indirectly influences the socio-economic framework affecting the growth of a region. WTTC report ‘The Economic Impact of Travel & Tourism, March 2019’ recognises that Travel & Tourism’s total contribution is much greater, and aims to capture its indirect and induced impacts through its annual research. Travelbiz Monitor presents insights of the report.

Direct contribution



The direct contribution of Travel & Tourism to GDP reflects the ‘internal’ spending on Travel & Tourism (total spending within a particular spending by government on Travel & Tourism services directly linked to visitors, such as cultural (e.g. museums) or recreational (e.g. national parks). The direct contribution of Travel & Tourism to GDP is calculated to be consistent with the output, as expressed in National Accounting, tourists. The direct contribution of Travel & Tourism to GDP is calculated from total internal spending by ‘netting out’ the purchases made by the different tourism sectors. This measure is consistent with the definition of Tourism GDP, specified in the 2008 Tourism Satellite.



The total contribution of Travel & Tourism includes its ‘wider impacts’ (i.e. the indirect and induced impacts) on the economy. The ‘indirect’contribution includes the GDP and jobs supported by:

  • Travel & Tourism investment spending – an important aspect of both current and future activity that includes investment activity such as the purchase of new aircraft and construction of new hotels;
  • Government ‘collective’ spending, which helps Travel & Tourism activity in many different ways as it is made on behalf of the ‘community at large’ – e.g. tourism marketing and promotion, aviation, administration, security services, resort area security services, resort area sanitation services, etc;
  • Domestic purchases of goods and services by the sectors dealing directly with tourists – including, for example, purchases of food and cleaning services by hotels, of fuel and catering services by airlines, and IT services by travel agents.
  • The ‘induced’ contribution measures the GDP and jobs supported by the spending of those who are directly or indirectly employed by the Travel & Tourism industry.




Travel & tourism’s contribution to GDP
The direct contribution of Travel & Tourism to GDP in 2018 was USD2,750.7bn (3.2% of GDP). This is forecast to rise by 3.6% to USD2,849.2bn in 2019. This primarily reflects the economic activity generated by industries such as hotels, travel agents, airlines and other passenger transportation services (excluding commuter services). But it also includes, for example, the activities of the restaurant and leisure industries directly supported by tourists.

The direct contribution of Travel & Tourism to GDP is expected to grow by 3.6% pa to USD4,065.0bn (3.5% of GDP) by 2029.

The total contribution of Travel & Tourism to GDP (including wider effects from investment, the supply chain and induced income impacts,) was USD8,811.0bn in 2018 (10.4% of GDP) and is expected to grow by 3.6% to USD9,126.7bn (10.4% of GDP) in 2019.



Visitor exports and investment
Money spent by foreign visitors to a country (or visitor exports) is a key component of the direct contribution of Travel & Tourism. In 2018, the world generated USD1,643.2bn in visitor exports. In 2019, this is expected to grow by 4.0%, and the world is expected to attract 1,484,910,000 international tourist arrivals.

By 2029, international tourist arrivals are forecast to total 2,196,090,000, generating expenditure of USD2,483.9bn, an increase of 3.8% pa



Investment
Travel & Tourism is expected to have attracted capital investment of USD940.9bn in 2018. This is expected to rise by 4.4% in 2019, and rise by 4.2% pa over the next ten years to USD1,489.5bn in 2029.

Travel & Tourism’s share of total national investment will rise from 4.4% in 2019 to 5.0% in 2029.

Different components of travel & tourism
  • Leisure travel spending (inbound and domestic) generated 78.5% of direct Travel & Tourism GDP in
  • 2018 (USD4,475.3bn) compared with 21.5% for business travel spending (USD1,228.0bn).
  • Leisure travel spending is expected to grow by 3.8% in 2019 to USD4,646.6bn, and rise by 3.9% pa to USD6,780.7bn in 2029.
  • Business travel spending is expected to grow by 3.0% in 2019 to USD1,265.4bn, and rise by 3.2% pa to USD1,735.1bn in 2029.






BUSINESS V/S LEISURE, 2018
  • Domestic travel spending generated 71.2% of direct Travel & Tourism GDP in 2018 compared with 28.8% for visitor exports (i.e. foreign visitor spending or international tourism receipts).
  • Domestic travel spending is expected to grow by 3.5% in 2019 to USD4,203.8bn, and rise by 3.7% pa to USD6,031.9bn in 2029.
  • Visitor exports are expected to grow by 4.0% in 2019 to USD1,708.2bn, and rise by 3.8% pa to USD2,483.9bn in 2029.


 
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