Travel and tourism executives have urged governments around the world to prioritise the industry — which is forecast to outpace global economic growth and create millions of jobs over the next decade — as geopolitical threats and recession concerns weigh on a “fragile” world economy.
The travel and tourism sector needs to be taken more seriously by governments, which have too often “neglected” the industry, as demonstrated by the “chaotic and shambolic” response to safely reopen international borders during the Covid-19 pandemic, Julia Simpson, president and chief executive of the World Travel and Tourism Council (WTTC), said on Tuesday.
“The global economy is at a very precarious point: The war in Ukraine is devastating, we face new geopolitical threats, inflation is undoubtedly a serious worry, and while a deep recession might yet be avoided, we have to admit our global economy at the moment is fragile,” Ms Simpson said at the WTTC Global Summit in Riyadh.
“So, I would really appeal to governments across the world: Please take travel and tourism seriously. Why? Because we can help you. Today bookings are very strong, demand for travel is outstripping supply, we have high employment and record savings, and that with waiting for China to reopen. But too often our sector has been neglected.”
When the travel and tourism industry thrives, other industries also grow, creating a beneficial wider economic spillover effect, Ms Simpson said.
The travel and tourism sector is forecast to grow 5.8 per cent annually over the next 10 years, ahead of global gross domestic product growth of 2.7 per cent yearly, and create 126 million new jobs by 2032, according to the WTTC.
$1 out of every $10 earned is made through the travel and tourism sector, which creates one in every 10 jobs globally, the tourism body said.
Private sector tourism players also urged governments to better co-ordinate with the industry on travel regulations and support for small and medium enterprises (SMEs) so that the sector can continue to grow sustainably after the pandemic.
Greg O’Hara, founder and senior managing director of Certares, outlined the difficulties for tourism companies in engaging with government bodies, citing the example of the US, which does not have a dedicated tourism minister.
Anthony Capuano, chief executive of Marriott International, said the economic spillover benefits of tourism into other sectors are becoming more significant as people seek more “experiences” when they travel after the pandemic, making the sector's growth more critical for other related industries.
Princess Haifa Al Saud, Saudi Arabia's Vice Minister of Tourism, said that it is “critical” for stakeholders to understand the economic spillover benefits from the tourism industry into other sectors. Her department had to build a business case on the sector's contribution to the economy to secure a budget, she said.
Khalid Al Falih, Minister of Investment of Saudi Arabia, said that tourism affects all sectors of the economy.
“We shouldn't measure it only by the macro number of a percentage of GDP. We saw during the pandemic that if the sector loses, everyone loses … and the spillover effect is quite incredible. Tourism is part of economic diversification and we are investing in it for the greater good.”
He added: “Even from a soft power projection of any country, it is very important. I would contest that it is an industry that you can make money smartly no matter where in the value chain you are.”
Ahmed Al Khateeb, Saudi Arabia's Minister of Tourism, stressed the need to “future proof” the tourism industry by investing in human capital and prioritising the environment.
FIXTURES
Fixtures for Round 15 (all times UAE)
Friday
Inter Milan v AS Roma (11.45pm)
Saturday
Atalanta v Verona (6pm)
Udinese v Napoli (9pm)
Lazio v Juventus (11.45pm)
Sunday
Lecce v Genoa (3.30pm)
Sassuolo v Cagliari (6pm)
SPAL v Brescia (6pm)
Torino v Fiorentina (6pm)
Sampdoria v Parma (9pm)
Bologna v AC Milan (11.45pm)
Gender pay parity on track in the UAE
The UAE has a good record on gender pay parity, according to Mercer's Total Remuneration Study.
"In some of the lower levels of jobs women tend to be paid more than men, primarily because men are employed in blue collar jobs and women tend to be employed in white collar jobs which pay better," said Ted Raffoul, career products leader, Mena at Mercer. "I am yet to see a company in the UAE – particularly when you are looking at a blue chip multinationals or some of the bigger local companies – that actively discriminates when it comes to gender on pay."
Mr Raffoul said most gender issues are actually due to the cultural class, as the population is dominated by Asian and Arab cultures where men are generally expected to work and earn whereas women are meant to start a family.
"For that reason, we see a different gender gap. There are less women in senior roles because women tend to focus less on this but that’s not due to any companies having a policy penalising women for any reasons – it’s a cultural thing," he said.
As a result, Mr Raffoul said many companies in the UAE are coming up with benefit package programmes to help working mothers and the career development of women in general.
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From Zero
Artist: Linkin Park
Label: Warner Records
Number of tracks: 11
Rating: 4/5
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
Name: Peter Dicce
Title: Assistant dean of students and director of athletics
Favourite sport: soccer
Favourite team: Bayern Munich
Favourite player: Franz Beckenbauer
Favourite activity in Abu Dhabi: scuba diving in the Northern Emirates
Killing of Qassem Suleimani
MATCH INFO
Uefa Champions League semi-final, first leg
Bayern Munich v Real Madrid
When: April 25, 10.45pm kick-off (UAE)
Where: Allianz Arena, Munich
Live: BeIN Sports HD
Second leg: May 1, Santiago Bernabeu, Madrid
INFO
What: DP World Tour Championship
When: November 21-24
Where: Jumeirah Golf Estates, Dubai
Tickets: www.ticketmaster.ae.
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