How can you attract tomorrow’s tourists? The answer to that question matters, because the worldwide tourism industry is enormous. The travel and tourism industry accounts for almost 10% of global GDP and is responsible for one in 11 jobs.
The answer matters even more when we look ahead to the future, as the relevance of travel and tourism is only going to increase. With a projected annual growth rate of 4% globally, the travel and tourism industry could become even more important for some countries. It will also grow faster than many other industries, including financial services, transport and manufacturing.
But as so often, there is no such thing as a free lunch. Some countries will have a harder time than others growing their tourism industry. There are many reasons for this. Take, for example, security; it is the primary concern of many travellers, which makes current geopolitical tensions, the rise of terrorism and the spread of Ebola extremely worrying for the travel and tourism industry – especially those in affected countries.
Yet through our Travel & Tourism Competitiveness Report 2015, we found that the industry as a whole has shown significant global resilience, despite slow economic growth in advanced economies and geopolitical concerns. It continues to grow and adapt – hence the theme of the report, “Growing Through Shocks”. And thus many countries should be able to attract more tourists tomorrow than they are today.
But who is prepared better than the rest? These are this year’s most competitive countries in terms of their travel and tourism industries:
These countries have done a tremendous job in facilitating travelling to their territories, promoting their natural and cultural heritage, and making one’s stay there enjoyable.
What to do if you’re not in the top spot? By analysing what works in today’s travel and tourism industry, and what doesn’t, interesting lessons emerge:
Today’s challenges can be tomorrow’s growth opportunities: technological, socio-economic and cultural forces are driving people to travel internationally more than ever before. And when they choose their destination, travellers tend to only avoid disaster or crisis hit countries for a short time. Consider for instance how the Spanish tourism industry bounced back post-economic crisis or how Thailand’s tourism industry is yet again a top destination following civil unrest. That should show how today’s challenges are tomorrow’s opportunities, for many countries.
You can win tomorrow’s consumer by mobile and “emerging market consumers”: from the increasing purchasing power in emerging and developing countries, demographic shifts and growing importance of the mobile and online sphere, the industry must adapt to stay on top of its game. Indeed, research shows that a family trip is the second-highest priority for the booming middle classes, after buying a car. And today, China is the largest market in terms of international tourism expenditure. In China for instance, mobile travel sales accounted for 40% of the business of the most important online travel agencies, namely Ctrip and eLong.
Tourists actually like the underdog: developing the travel and tourism industry provides growth opportunities for all countries, regardless of their wealth, and offers job opportunities at all skill levels. Indeed, middle income countries now receive more international visitors than high income countries. The industry is also a driver of jobs and tends to employ more women and young people than most other industries. It also creates many opportunities for SMEs. And all five continents are represented in the top 50 countries, from the UAE in the Middle East, over South Africa, Seychelles and Mauritius in Africa, and Singapore in Asia, to Brazil and Mexico in Latin America.
Cooperation is the new competition: while people may believe that the travel and tourism industry “works on its own”, this is not the case. In effect, it is an extremely complex industry and requires inter-ministerial coordination and often international and public-private partnerships. It also requires inter-nation coordination and inter-agency coordination. Consider the collaboration needed for visa-free Schengen to be implemented. Similar efforts are being undertaken by the Pacific Alliance, ASEAN and ECOWAS among others.
The Travel & Tourism Competitiveness Report 2015 is available here.
Author: Roberto Crotti, quantitative economist, Global Competitiveness and Risk, World Economic Forum. Tiffany Misrahi, Community Manager, Mobility Industries, World Economic Forum.
Image: A Northwest Airlines airplane departs Sky Harbor International Airport in Phoenix, November 25, 2009. REUTERS/Joshua Lott