The global travel and tourism industry is projected to grow by 2.8% during 2012, marginally faster than the global economy’s pace of 2.5%, the WTTC’s president and CEO told HotelNewsNow.com.
BERLIN—The global travel and tourism industry is expected to grow approximately 2.8% during 2012, David Scowsill, president and CEO of the World Travel & Tourism Council, told HotelNewsNow.com.
The just-released figure represents a pace of growth marginally faster than the global economy, which is forecast to grow approximately 2.5%, according to the World Bank.
The travel and tourism industry’s growth for 2012 is below the long-term average of nearly 4%, though Scowsill said the pace is still strong in light of the sovereign debt crisis in Europe.
“We expect over the next 10 years the industry to grow at around 4% every year globally,” Scowsill said. By 2022, the industry is expected to generate $10 trillion to the global economy and 328 million jobs. During 2012, travel and tourism will generate $6.5 million, or 9% of the global gross domestic product, and 260 million jobs, he said.
“We’re a big industry,” he said, adding that travel and tourism contributes more to the global GDP than the automotive industry (8%) and slightly less than the banking industry (11%).
Travel and tourism is also a resilient industry.
“There are always shocks going on,” Scowsill said, highlighting 9/11, the Arab Spring and the Japanese tsunami as examples. “With all of these things, we track them over time, and we search to see how fast the industry comes back at any given point. The industry’s always very, very resilient,” taking between nine months and 15 months to return to peak levels of performance after a major shock.
“The hotel industry is in for another good year,” Scowsill said, echoing comments made earlier in the day by leaders of some of the world’s largest brand companies.
Consumers are spending discretionary income on travel, and corporations show no signs of slowing down, he said. Major global cities will continue to benefit as a result.
However, any success will, for the near term, fall in the shadow of previous peaks before the recession, Scowsill said. The industry is not as robust as it once was, so there is still ground to be made—ground which he had no doubt the industry will make up within the next few years.
Part of this success will come from the hotel industry’s unified efforts toward promoting their industry to G20 governments, something that has been lacking for years.
The U.S., for example, lost $600 billion during the last 10 years because of inefficient visa and other security restrictions. Fortunately, the hotel industry, along with other travel sectors, banded together and lobbied the Obama Administration, which resulted in the president signing an executive order to ease travel restrictions among other initiatives.
The WTTC is participating in similar outreach to other G20 country leaders. Recently, it received confirmation that G20 chair and Mexican President Felipe Calderón will bring the issue of visa reform to the next summit in June.
Emerging markets accelerate demand
The average growth of the travel and tourism industry might be 4% during the next 10 years, but that increase is not dispersed equally. Emerging markets, primarily China and India, will comprise the lion’s share of that expansion with increases of 9.2% and 8%, respectively.
The European Union, by comparison, is projected to grow 2.5% during the next decade, Scowsill said.
There will be 2 billion new middle-class consumers within the next 20 years, he added, which means more travelers visiting more hotels around the globe. But again, much of that growth will be concentrated in the BRIC countries, with China and India comprising 1.4 billion of that total.
Which begs the question: Will there be enough supply and a large enough infrastructure to support the demand? Scowsill said the jury’s still out.
While it remains a big concern, he said some positive indicators, such as the Chinese government’s commitment to build eight new airports, suggest the industry will be able to keep pace.
Overall, Scowsill said he’s very optimistic about the long-term future of the broader travel and tourism industry as well as hotels—despite any unforeseen threats that might pop up.
“The global industry carries on more or less at 4% (growth) every year,” he said. “Shocks are never enough to have a lasting impact.”