Tourism chiefs urge governments to prioritise sector amid global economic headwinds

Industry set to create 126 million new jobs and outpace global economic growth over the next decade, WTTC says

Julia Simpson, president of the World Travel & Tourism Council, urged governments to incentivise the production of sustainable aviation fuels. Photo: WTTC

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.