Let’s talk about Global Travel…
During a prolonged and grinding recession, the travel industry was one of the few to bounce back early and help buoy the global economy. Last year, the industry accounted for 9.5 percent of the global economy (nearly $7 trillion) and employed 266 million people. This is about 9 percent of the global workforce.
Below are excerpts from a conversation with David Scowsill of Britain, president and chief executive of the World Travel and Tourism Council. He discusses how countries can maximize the economic impact of travel and tourism:
How has the global tourism market changed over the last five years?
Whether in a recession or a growth period, the travel and tourism industry is extremely robust. It grows between 1 and 1 1/2 percentage points faster than the world economy.
Going into the recession, post-Lehman Brothers, pieces of the industry suffered quite badly. In particular, the hotel industry, because the demand for investment dried up. During that time supply and demand were also out of kilter with the airlines. But, we’ve cruised through successfully with four straight years of growth. At this point, we’re predicting global growth for the industry to be around 4.3 percent for 2014.
Which countries were behind the growth these last four years?
Much of it is coming out of Asia. Over time, the balance has gently started to move away from the U.S. and Europe. We’re forecasting that China will overtake the U.S. in 2027 as the world’s largest travel and tourism economy.
Why is that?
Ernst & Young estimates that by 2030, nearly one billion people in China could enter into the middle class. This will allow them to have a disposable income to travel domestically and abroad. Ten years ago their government singled out tourism as a key pillar of economic growth. As a result, they have invested well ahead of the curve. They now have high-speed trains, hotel complexes and airports to absorb growth within the middle class. In fact, right now they are busy building 69 airports around the country. In the future, no person in China will be more than a 90-minute drive from an airport.
And this won’t be limited to domestic travel. Over the last three years, the number of people traveling outbound from China has nearly doubled to 100 million. That figure is forecast to rise to 200 million by 2020.
Which countries are currently being visited most?
Statistically, around the world, it’s still France, United States, China and Spain, in that order. France is still way out in the lead with 83 million visitors in 2012; in the same year, the United States had 67 million and China and Spain both had 57 million.
What steps can a country take to help its tourism industry grow?
One of the major inhibitors of the travel industry is that 70 percent of people who travel still need to go to an embassy in order to visit another country.
The U.K.’s inbound tourism has been static since 2005 and a lot of that’s down to visa facilitation. Say you want to go on holiday in Europe. You can get a Schengen visas that allow you to visit all of the 25 participating countries on the Continent. But if you want to go to the U.K., even for a few days, you have to queue up at the consulate, pay money and go through an interview process to get a second visa.
The opposite of that equation would be Mexico. If you have already fought your way through the U.S. system to get a visa, that’s perfectly acceptable for them. They’ll allow you to come without having to go through the process again. There are pockets of the world that have made great progress. Countries in Latin America and Asia are starting to offer common visas, which ultimately might progress into Schengen type models.
What about security?
It’s up to every country to decide how they want to conduct security processing to defend their country at the broadest level. But what we advocate is automating all these processes. Make sure that all the security agencies that are involved are coordinated. For example, if I want to go to Australia, I put my details online and within seconds I will get a response.
We’re advocating for people to move toward electronic processing so 95 percent of people can automatically get visas. During the 10 years after 9/11, the U.S. lost some $600 billion of tourism income. The State Department was not issuing enough tourism visas to keep up with demand. The U.S. system is growing more efficient, but there’s still a long way to go.