Looking ahead, WTTC anticipates robust investment growth of 11.5% in 2023, totaling $955 billion, with a return to pre-pandemic levels projected by 2025. The organization forecasts an encouraging 6.1% average annual global growth by 2033, with Asia-Pacific and the Caribbean expected to exhibit the strongest annualized growth rates.
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GLOThe recent release of the Travel & Tourism Economic Impact 2023 Global Trends Report by the World Travel & Tourism Council (WTTC) highlights a promising resurgence in Travel & Tourism investment, overcoming setbacks caused by the pandemic and indicating a robust return to growth.
Between 2010 and 2019, investment steadily increased at a compound annual growth rate (CAGR) of 4.3%, rising from USD 754.6 billion in 2010 to USD 1.1 trillion in 2019, constituting 4.5% of total economy-wide investments. However, the COVID-19 pandemic led to a significant decline, with a 24% drop in 2020 followed by an additional 8% decline in 2021.
The year 2022 marked a turning point, characterized by a surge in Travel & Tourism investment to USD 856 billion, marking an 11.1% increase from the preceding year. Although this fell 22.5% short of 2019 levels, it still represented a 53% rise from 2000.
Notably, investment in regions like Asia-Pacific and Africa soared to levels 161% higher than in 2000 during 2022, while Europe and the Middle East experienced more restrained growth. Although the pandemic disrupted the significant growth witnessed in these regions over the past two decades, their 2022 investment remained above 2000 levels.
In terms of absolute investment, the US led the top 10 markets in the sector in 2022 with USD 213 billion, followed by China with USD 146 billion and Saudi Arabia with USD 42 billion.
Island destinations emerged as leaders in Travel & Tourism investment as a percentage of their economies in 2022. The US Virgin Islands led with 35% of total economic investment directed toward Travel & Tourism, followed closely by Antigua & Barbuda at 34%, and Aruba at nearly 32%.
Private investment in areas like new aircraft, hotels, and vehicle fleets is crucial for expanding the sector’s capacity. Public investment complements this growth, generating a synergistic effect that leads to more jobs, larger economies, and more robust communities.
WTTC’s President & CEO, Julia Simpson, emphasized, “Investment in Travel & Tourism is not just a numbers game; it is the heartbeat of global connectivity and economic revival. Despite pandemic setbacks, the growth in 2022 signifies promising times ahead.”
Looking ahead, WTTC anticipates robust investment growth of 11.5% in 2023, totaling $955 billion, with a return to pre-pandemic levels projected by 2025. The organization forecasts an encouraging 6.1% average annual global growth by 2033, with Asia-Pacific and the Caribbean expected to exhibit the strongest annualized growth rates.
However, the global rise in interest rates poses challenges for future investment. With central banks increasing interest rates to combat inflation, borrowing costs rise, potentially impacting investment in the sector. To address this, collaboration between the public and private sectors will be essential to drive innovation and ensure the continued strengthening of this vital industry.
Source: WTTC / TTR Weekly
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