THE travel industry’s global economic impact continues to gain ground. This year, it’s expected to reach a record-breaking $11.1 trillion (R208trl), surpassing its prior high of $10trl in 2019. In another decade, tourism is forecast to become a $16trl industry, at which point it would make up 11.4% of the global gross domestic product.
Today, one in 10 people are employed in jobs that relate to tourism; by 2034, that will climb, with an estimated 12.2% of global jobs contributing to the sector.
All this is part of the 2024 global economic impact research released last week by the World Travel & Tourism Council (WTTC), the leading advocacy group focused on quantifying the industry’s economic impact a global level. The findings, produced in collaboration with research advisory firm Oxford Economics, were shared exclusively with Bloomberg ahead of wider distribution.
In order to create its forecasts, the analysts collect data from governments and industry groups that report on topics like international tourism arrivals and expenditures in the previous year, and combine it with proprietary, forward-looking assessments of travel supply and demand.
To the experts at the WTTC, the biggest numbers are the least surprising. The growth of the tourism industry being reported now is in step with previous projections reported by the group. Last year, a similar study predicted that the sector would represent $15.5trl by 2033.
But details within the report provide a more nuanced and notable picture: Travel’s record-setting rebound in 2023 came without much help from the Chinese and American markets, where international arrivals continued to lag significantly behind pre-pandemic levels. The likelihood that those markets will soon recover is what sets up the potential for record-breaking numbers this year.
The 14-figure sums headlining WTTC’s report can be broken down into three types of travel transactions. Direct travel spending includes all expenses that are most clearly connected to the act of travelling: Think hotels, tours, and transportation, plus public investment in these types of services.
Then there’s indirect travel spending, which quantifies the ripple effect of spending from those businesses. Among the types of expenses included in this category are sheets and towels that hotels purchase from local vendors, or ingredients purchased in bulk for the breakfast buffet.
Lastly there’s induced spending, which accounts for the trickle-down effects of hospitality employees using their salaries to stimulate their local economies.
Julia Simpson, the president and chief executive officer at the World Travel & Tourism Council, speaking to Bloomberg from Boston, says the US travel sector has been one exception because of how the dollar has strengthened, making a trip to the US more expensive for people in countries that are struggling with inflation.
Ongoing visa delays have also been a factor, she adds. US inbound international visitation spending remains at more than 25% below pre-pandemic levels. In China, visitor spending lags by 60%, making it the least-recovered tourism economy out of 185 countries in WTTC’s report.
Also notable is the fact that more money continues to be spent on domestic travel versus international trips. This year, it will make up a record $5.4trl, a 10% increase from 2019 levels.
All told, 142 out of the 185 surveyed countries are expected to exceed their 2019 tourism performance levels in 2024, and almost all of those are additionally expected to see year-over-year growth.
That means that not only will the travel economy at large be breaking records this year – assuming all pans out as expected – but it will break records at each of those local levels, too.
“Travel isn’t just back, travel is booming,” says WTTC’s Simpson. “We’re talking about a really, really strong sector.”
BLOOMBERG