COVID-19 had a devastating impact on Travel and Tourism and in particular major cities around the world as countries closed their borders in response to the pandemic. As borders reopened, many leisure travellers swapped city visits for less-populated destinations such as coastal and rural destinations, but latest research from WTTC shows that city holidays are back and growing in popularity.
Paris again takes the crown as the world's most powerful city destination with a Travel and Tourism sector worth almost USD36billion in 2022, in terms of direct GDP contribution to the city. Over the next 10 years, WTTC predicts it will drop down to third place, although its value will rise to over USD49billion.
Beijing is currently the second biggest city destination in the world with a Travel & Tourism sector worth nearly USD33billion. However, WTTC predicts it will leapfrog Paris within the next 10 years, growing to a staggering USD77billion.
Doors reopening in China
WTTC studied the impact of the Travel & Tourism sector in four major cities across China; Beijing, Chengdu, Guangzhou, and Shanghai and found a mixed picture across the four city destinations.
In all four cities the sector's GDP contribution last year almost fully recovered back to 2019 levels. The GDP contribution from the sector to Beijing and Chengdu's economy in 2022 was just 4% and 2% below 2019 levels respectively - USD34billion and USD5.4billion, compared to USD31billion and USD5.5billion.
Last year, the Travel and Tourism's GDP contribution in Guangzhou and Shanghai was around 7% below 2019 levels. In Guangzhou the sector contributed USD13.2billion in 2022 compared to USD14.1billion pre-pandemic, while in Shanghai, the sector contributed USD29.7billion compared to USD31.5billion in 2019.
Visitors provide 'massive boost' to both the economy and job creation
China has long been a popular travel destination for both business and leisure and has faced more than two years of disruption under the shadow of COVID-19 restrictions.
Visitors provide a "massive boost to both the economy and job creation," says Julia Simpson, president & CEO, WTTC. "It is crucial that the national and local governments continue to recognise the importance of Travel & Tourism for the local and national economies, jobs and businesses."
Employment opportunities rising back to pre-pandemic levels
WTTC data shows that in 2019, there were 1.35million people employed by the Travel and Tourism sector in Beijing. But in 2020 this figure dropped to 1.16million (-15%). In 2021, employment grew by more than 5% and is expected to have grown a further 4% in 2022 to reach 1.27million jobs, according to the research.
In the other three cities, it's a similar picture. The data shows that before the pandemic, there were 1.32million Travel and Tourism jobs in Shanghai, but this number fell to 1.13million in 2020 (-14%). A 10% rise in 2021 saw the number increase to 1.25million and it was predicted to see a slight increase to 1.26million in 2022.
In Guangzhou there were just over 603,000 jobs in 2019 but this dropped by 23% to just over 464,000. A slight 4% rise in 2021 saw jobs increase to just under 481,000 and WTTC is expecting a 16.5% increase in 2022 to bring the total jobs to over 560,000.
Chengdu is seeing an even stronger return to pre-pandemic levels. In 2019 there were 336,000 jobs in the city which dropped by 12% to just under 297,000 in 2020. The following year saw a small 5% increase to 311,000 jobs and last year the global tourism body is predicting a 6% increase to 329,500 jobs - just 2% below pre-pandemic levels.
Visitor spend struggles as borders have remained closed
Due to the prolonged border closures imposed by the government, international visitor spend is taking longer to recover than in other countries around the world.
But light is at the end of the tunnel. Whilst international visitor spend is still on average 53% lower in 2022 than it was in 2019, according to WTTC, all of the cities analysed are showing modest year-on-year increases.
International visitor spend in Beijing is just 41% what it was in 2019, with visitors spending a predicted USD5billion in 2022 compared to USD12.1billion in 2019. In Chengdu, international visitor spend is performing better than the capital with recovery at 61% of 2019 levels. Travellers spent USD1.billion in Chengdu in 2022 compared to USD2.5billion in 2019.
Both Shanghai and Guangzhou have seen international visitor spend drop to 44% of 2019 levels. In Shanghai it went from USD11.9billion before the pandemic to USD5.2billion in 2022, while in Guangzhou it went from USD4.3billion in 2019 to USD1.9billion in 2022.
Beijing one of five key Travel and Tourism cities to impact local Asian economies
There were five Asian cities amongst the top 25 whose Travel and Tourism sectors have the greatest impact on their local economies. According to the study, alongside Beijing, the highest performing Asian cities in 2022 were Bangkok, Seoul, Singapore, and Tokyo.
Following continued border closures and strict travel restrictions, the report shows that in these major powerhouses, Travel and Tourism's direct contribution to GDP is recovering, albeit at a slow pace. Whilst it's a slightly different picture for international visitor spending, all cities are starting to show signs of economic recovery thanks to overseas travellers spending once again.
Most of the cities' sector job levels are also increasing once again, with the exception of Tokyo, whose sector job market is recovering at a slower rate.
GDP contribution of Travel and Tourism sector slowly recovering
The WTTC's Cities Economic Impact Report shows that in 2019, the Travel and Tourism sector contributed $106.9BN to the capitals of these five countries combined. But the pandemic has had a damaging and long-lasting effect on the region with only Beijing recovering close to 2019 levels.
You can read more on the WTTC report on our sister CAPA - Centre for Aviation site: WTTC report on economic value gained by cities from tourism - shift towards the east