The new World Travel & Tourism Council’s (WTTC) Travel & Tourism Economic Impact 2023 Global Trends Report reveals an encouraging resurgence in Travel & Tourism investment, overcoming pandemic setbacks and signalling a strong return to growth.
From 2010 to 2019, investment grew steadily at 4.3% CAGR, growing from USD754.6billion in 2010 to USD1.1 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.
WTTC: Travel & Tourism investment surged to USD856 billion in 2022
Spurred by the global phenomenon of pent-up demand, the WTTC report shows Travel & Tourism investment surged to USD856 billion, 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.
US leads industry investment, ahead of China and Saudi Arabia
The US leads the top ten markets in terms of absolute investment in the sector in 2022 with USD213 billion, showing a sector ready to thrive once again. China trails with a USD146 billion investment in 2022, with Saudi Arabia rounding out the top three with total investment of USD42 billion in the same year.
Travel & Tourism investment remains important for islands
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%.
Travel & Tourism investment ‘heartbeat of global connectivity and economic revival’
Investment in Travel & Tourism is integral to the world’s recovery and growth,” says Julia Simpson, WTTC President & CEO. “Investment in Travel & 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,” she adds.
WTTC forecasts double-digit investment growth in 2023; return to pre-pandemic levels in 2025
WTTC forecasts robust 11.5% growth in investment in 2023, amounting to USD955 billion, 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, it says, with central banks increasing interest rates to combat rising inflation, the cost of borrowing and products increases.
Higher interest rates could present a risk to future investment in the sector, notes WTTC, so it notes it’s crucial that the public and private sectors “work together to innovate” to ensure the continual strengthening of this sector.
