As COVID-19 lockdowns hit the travel and tourism (T&T) sector hard. In 2020 alone, it faced losses of $4.5 trillion and 62 million jobs, impacting the living standards and well-being of communities across the globe. The recovery has now started, it’s proving gradual and uneven largely due to variations in vaccine distribution, and because of Omicron and its BA.2 subvariant. International tourist arrivals rose by 18 million in January 2022 compared with a year earlier. This equals the increase for the whole of 2021 from 2020, but January’s numbers were still 67% below the same month in 2019, according to the UNWTO. The war in Ukraine has added to instability and economic disruption for the sector. Against this backdrop, the World Economic Forum’s inaugural Travel and Tourism Development Index reflects the growing role of sustainability and resilience in T&T growth, as well as the sector’s role in economic and social development more broadly.
The index covers 117 economies, which accounted for around 96% of the world’s direct T&T GDP in 2020, and measures the factors and policies that will enable sustainable and resilient development of the sector. These include everything from business, safety, and health conditions, to infrastructure and natural resources, environmental, socioeconomic, and demand pressures.
“As the sector slowly recovers, it will be crucial that lessons are learned from recent and current crises and that steps are taken to embed long-term inclusivity, sustainability, and resilience into the travel and tourism sector as it faces evolving challenges and risks,” says the publication, a collaboration between many of the sector’s stakeholders.
The index consists of five sub-indexes, 17 pillars, and 112 individual indicators, distributed among the different pillars. On average, scores increased by just 0.1% between 2019 and 2021, reflecting the difficult situation facing the sector. Only 39 out of 117 economies covered by the index improved by more than 1.0%, while 27 declined by over 1.0%.
Nine of the top 10 scoring countries are high-income economies in Europe or Asia-Pacific. Japan tops the ranking, with the United States in second, followed by Spain, France, Germany, Switzerland, Australia, the United Kingdom, and Singapore. Italy completes the top 10, moving up from 12th in 2019.
VietNam experienced the greatest improvement in score, with a rise of 4.7% lifting it from 60th to 52nd on the overall index. Indonesia achieved the greatest improvement in rank, increasing its score by 3.4% to climb from 44th to 32nd, while Saudi Arabia achieved the second greatest improvement in rank, moving up to 33rd from 43rd as its score rose by 2.3%.
As per the key findings, the need for travel and tourism development has never been greater
The sector is a major driver of economic development, global connectivity, and the livelihood of some of the populations and businesses most vulnerable to, and hard hit by, the pandemic. In 2019, T&T’s direct, indirect and induced GDP accounted for about 10% of global GDP. For many emerging economies, T&T is a major source of export revenue, foreign exchange earnings, and investment. Research has shown that T&T growth can support social progress and create opportunities and well-being for communities, so supporting travel and tourism development and recovery will be critical.
Shifting demand dynamics have created opportunities and a need for adaptation. In the shorter term, challenges such as reduced capacity, geopolitical tensions, and labour shortages are slowing recovery. However, opportunities have been created in markets such as domestic and nature-based tourism, the rise of digital nomads, and “bleisure” travel – the addition of leisure activities to business travel. Many countries have provided incentives to boost domestic tourism. For example, Singapore, South Korea, Japan, and Hong Kong SAR, China, have rolled out programmes that provide discounts, coupons, and subsidies for domestic travel. The trends toward more rural and nature-based tourism offer an opportunity for less-developed economies to harness the benefits of travel and tourism given that the distribution and quality of natural assets are less tied to performance in economic development, with natural resources being one of the few pillars where non-high income economies typically outperform high-income countries. The travel and tourism sector stakeholders’ ability to adapt under these conditions highlights its capacity for adaptation and flexibility.
Development strategies can be employed to help the sector build back better, reads the Index. Shifting demand dynamics and future opportunities and risks, a more inclusive, sustainable, and resilient travel and tourism sector can be – and needs to be – built, says the publication. But this calls for thoughtful and effective consideration. It also requires leveraging development drivers and strategies. This can be done by: restoring and accelerating international openness and consumer confidence through, for example, improved health and security; building favourable and inclusive labour, business, and socioeconomic conditions; focusing more on environmental sustainability; strengthening the management of tourism demand and impact; and investing in digital technology.
Most of the data set for the Travel & Tourism Development Index (TTDI) is statistical data from international organizations, with the remainder based on survey data from the World Economic Forum’s annual Executive Opinion Survey, which is used to measure concepts that are qualitative in nature or for which internationally comparable statistics are not available for enough countries.
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