Full report
Published: 24 May 2022

Travel & Tourism Development Index 2021: Rebuilding for a Sustainable and Resilient Future

1. About the Travel & Tourism Development Index

Viet Nam saw the largest increase in score.
Viet Nam saw the largest increase in score.
Source: unsplash.com

The Travel & Tourism Development Index (TTDI) is a direct evolution of the Travel & Tourism Competitiveness Index (TTCI), which has been published biennially for the past 15 years. The TTDI benchmarks and measures “the set of factors and policies that enable the sustainable and resilient development of the Travel and Tourism (T&T) sector, which in turn contributes to the development of a country”.

The transition from TTCI to TTDI reflects the index’s increased coverage of travel and tourism (T&T) development concepts, including the expanding role of sustainability and resilience in T&T growth, and is designed to focus more attention on the sector’s role in broader economic and social development as well as the greater need for T&T stakeholder collaboration and integrated development strategies (local, regional and international) to mitigate the impact of the pandemic, bolster the recovery and deal with future challenges and risks. The TTDI framework and methodology have also been enhanced to reduce index bias and improve flexibility in use. Despite these changes, the TTDI and TTCI remain very close. Earlier editions of the TTCI have always looked at the concept of “competitiveness” as a means of developing the T&T sector and thus measured elements that enabled such development. In this context, It is also important to point out that the new TTDI does not measure the level of T&T development that an economy possesses, but the potential drivers of such development.

The development of the TTDI was pursued following the publication of the Travel & Tourism Competitiveness Report 2019: Travel and Tourism at a Tipping Point, which considered the challenges linked to tourism development and growth such as overcrowding, unbalanced distribution of T&T economic benefits and damage to tourism-generating natural and cultural assets that ultimately diminished liveability for residents, created a local backlash against T&T development and harmed visitor experiences. Since the publication of the 2019 TTCI, the impact of COVID-19 and now geopolitical disruptions have further demonstrated the potential volatility of the sector and the need to reassess how it embeds resilience into its design and management practices.

In order to ensure a productive and long-standing recovery, the sector must incorporate lessons learned from current crises and ensure better preparedness for future headwinds, many of which can be historic and long term in nature and impact. The new TTDI framework is designed to support this pivot in strategy and practice.

The TTDI framework has been created with input from T&T stakeholders, including an advisory group that includes representatives from: Bloom Consulting, the International Air Transport Association (IATA), JLL Hotels & Hospitality Group, the Pacific Asia Travel Association (PATA), the University of Surrey, the United Nations World Tourism Organization (UNWTO) and the World Travel & Tourism Council (WTTC). In addition, the index relies on close collaboration with the following data partners: AirDNA, Bloom Consulting, Euromonitor International, GlobalPetrolPrices.com, IATA, the International Civil Aviation Organization (ICAO), STR, Tripadvisor, the UNWTO and the WTTC.

Indonesia had the largest rank increase (44th to 32nd).
Indonesia had the largest rank increase (44th to 32nd).
Source: unsplash.com

Please note that while the TTDI is an update of the TTCI, due to the altered methodology, framework and other differences, the 2021 TTDI should not be compared to the 2019 TTCI. To help address this, the 2019 results were recalculated using the new framework, methodology and indicators of the TTDI. Therefore, all comparisons in score and rank throughout this publication are between the 2019 results and the 2021 results of the TTDI.

For more detailed information on the TTDI methodology and new framework, country peer and income group classification, indicator details, partner information and to explore the index results through interactive data visualizations, please visit the index website.

1.1 Benchmarking the enablers of Travel and Tourism development

The index provides a strategic benchmarking tool for business, governments, international organizations and others to develop the T&T sector. By allowing cross-country comparison and by benchmarking countries’ progress on the drivers of T&T development, it informs policies and investment decisions related to the development of T&T businesses and the sector as a whole. The index provides unique insights into the strengths and areas for development of each country to support their efforts to enhance the long-term growth of their T&T sector in a sustainable and resilient manner. Furthermore, it provides a valuable platform for multistakeholder dialogue to formulate appropriate policies and actions at local, national, regional and global levels.

The index is comprised of five subindexes, 17 pillars and 112 individual indicators, distributed among the different pillars. However, the five subindexes are not factored into the calculation of the index and are used only for presentation and categorization purposes. The Non-Leisure Resources, Socioeconomic Resilience and Conditions, and T&T Demand Pressure and Impact pillars are all new when comparing earlier TTCI editions with the new TTDI.

Figure 1: The Travel & Tourism Development Index framework

World Economic Forum, Travel & Tourism Development Index 2021: Framework

Business Environment (9 indicators): This pillar captures the extent to which a country’s policy environment is conducive to companies doing business. Research has found significant links between economic growth and aspects such as how well property rights are protected and the efficiency of the legal framework. Policy stability and levels of regulatory burdens and corruption also play a critical role in determining economic development, productivity and overall investment decisions. These factors are important for all sectors, including T&T. In addition, we consider access to financing for small and medium-sized enterprises (SMEs), which is a particularly relevant issue for T&T development as the majority of operators are SMEs.

Safety and Security (6 indicators): Safety and security are critical factors in determining the success of a country’s T&T sector. This pillar measures the extent to which a country exposes locals, tourists and businesses to security risks. In addition to creating barriers to T&T investment, countries with a high incidence of crime or violence are likely to deter visitors, making it less attractive to develop the T&T sector in those places. Here, the costliness and occurrence of common crime and violence, police reliability, and terrorism and armed conflict are considered.

Canada lost its place in the top 10 (down from 10th to 13th).
Canada lost its place in the top 10 (down from 10th to 13th).
Source: unsplash.com

Health and Hygiene (6 indicators): This pillar measures healthcare infrastructure, accessibility and health security. COVID-19 has highlighted the potential impact of communicable diseases on the T&T sector. In particular, the pandemic has demonstrated how important a country’s healthcare system is when it comes to mitigating the impact of pandemics and ensuring safe travel conditions, and workforce availability and resilience. In general, if tourists or sector employees do become ill, the country’s health sector must be able to ensure that they are properly cared for, as measured by the availability of and access to physicians, hospital beds and general healthcare services. Moreover, access to safe drinking water and sanitation is important for the comfort and health of travellers and locals alike. Please note that due to evolving COVID-19 conditions, this pillar does not track the pandemic itself.

Human Resources and Labour Market (9 indicators): This pillar measures the availability of quality employees and the dynamism, efficiency and productivity of the labour market. High-quality human resources in an economy ensure that the sector has access to the collaborators it needs. Regarding a quality workforce, this means that years of schooling, formal educational attainment rates, the education system’s ability to meet economic needs and private-sector involvement in upgrading human resources are measured. Regarding the labour market, the flexibility, efficiency and openness of labour markets, as well as labour productivity in the hospitality, restaurant and transport sectors, are tracked.

ICT Readiness (8 indicators): This pillar measures the development and use of ICT infrastructure and digital services. Online services and digital platforms continue to grow in importance for T&T business operations. Such services and platforms are being used for everything from planning itineraries to booking travel and accommodation. Moreover, ICT has become crucial for businesses to access and advertise to new markets, improve efficiency and gain insights into consumer needs. The components of this pillar measure not only the existence of modern physical infrastructure (e.g. mobile network coverage and electricity supply), but also the degree to which digital platforms are used for T&T and related services and gain insights into consumer needs. The components of this pillar measure not only the existence of modern physical infrastructure (e.g. mobile network coverage and electricity supply), but also the degree to which digital platforms are used for T&T and related services.

Prioritization of Travel and Tourism (5 indicators): This pillar measures the extent to which the government and investors actively promote and invest in the development of the T&T sector. The extent to which the government prioritizes the T&T sector has an important impact on T&T development. By making clear that the sector is of primary concern, the government can channel funds to essential development projects and coordinate the actors and resources necessary to develop the sector. The government can also play an important role in directly attracting tourists through national marketing campaigns. This pillar includes measures of government spending, country branding and
the completeness and timeliness of providing T&T data to international organizations, as these indicate the importance that a country assigns to its T&T sector. Moreover, overall capital investment in T&T is accounted for as it measures the degree to which public and private stakeholders are willing to invest resources in T&T relative to other parts of the economy.

International Openness (4 indicators): This pillar measures how open a country is to visitors and providing travel services. Developing a T&T sector internationally requires a certain degree of openness and travel facilitation. Restrictive policies such as cumbersome visa requirements diminish tourists’ willingness to visit a country. Components measured in this pillar include: the number of bilateral air service agreements that the government has entered into, which affects the availability of air connections to the country; and the number of regional trade agreements in force, which indicates the extent to which it is possible to provide world-class tourism services. Financial openness is also measured as the free flow of capital is important for cross-border trade and investment in T&T services.

Price Competitiveness (5 indicators): This pillar measures how costly it is to travel or invest in a country. Lower costs related to travel in a country increase its attractiveness for many travellers as well as making its T&T sector more appealing to investors. Among the aspects of price competitiveness taken into account in this pillar are: airfare ticket taxes and airport charges, which can make flight tickets much more expensive; the relative cost of hotel and short-term rental accommodation; the cost of living, represented by purchasing power parity; and fuel price costs, which directly influence the cost of travel.

Air Transport Infrastructure (4 indicators): Air connectivity is essential for travellers’ ease of access to and from countries, as well as movement within many countries. In this pillar we measure international and domestic air route capacity and quality, using indicators such as available seat kilometres, the number of operating airlines and the efficiency of air transport services. The extent to which a country’s airports are integrated into the global air transport network is also measured.

Ground and Port Infrastructure (7 indicators): This pillar measures the availability of efficient and accessible ground and port transportation to important business centres and tourist attractions. Sufficiently extensive road and railway networks, indicated by road and railway densities, as well as road, railway and port infrastructure that meets international standards of comfort, security and modal efficiency are vital to enabling a T&T economy. This pillar also accounts for the efficiency of and access to public transport services such as underground rail systems and taxis as these are regularly used by visitors and T&T employees, especially in urban locations.

Tourist Service Infrastructure (5 indicators): This pillar measures the availability and competitive provision of key tourism services such as accommodation and car rentals. The availability of sufficient accommodation, resort and leisure facilities can represent a significant advantage for a country. We measure the level of tourism service infrastructure through the number of hotel rooms and short-term rental units, complemented by the extent of access to services such as car rentals and ATMs. Competition among tourism services is also accounted for because it plays a role in the pricing and quality of services.

View of Rail Line in Yuen Long District, Hong Kong
Hong Kong SAR scored highest for Ground and Port Infrastructure.
Source: Getty Images/iStockphoto

Natural Resources (5 indicators): This pillar measures the available natural capital as well as the development of outdoor tourism activities. Natural capital is defined in terms of the landscape, natural parks and richness of fauna. Countries with natural assets may be better positioned to attract tourists. In this pillar, we include several attractiveness measures, including the number of United Nations Educational, Cultural and Scientific Organization (UNESCO) natural World Heritage Sites, the richness of fauna and biodiversity in the country and the scope of protected areas, which indicates the extent of national parks and nature reserves. Digital Demand[i] for nature and relevant activities is also measured as an illustration of how well known and effectively marketed a country’s natural assets are.

Cultural Resources (6 indicators): This pillar measures the availability of cultural resources such as archaeological sites and entertainment facilities. To an extent, this pillar captures how cultural resources are protected, developed and promoted. Included here are the number of UNESCO cultural World Heritage Sites, the number of large stadiums that can host significant sport or entertainment events, and a measure of Digital Demand for a country’s cultural sites and entertainment. Also included are the number of UNESCO Creative Cities, representing efforts to protect and develop cultural and creative activities and industries in urban centres.

Non-Leisure Resources (4 indicators): This pillar measures the extent and attractiveness of factors that drive business and other non-leisure travel, which account for a significant share of T&T revenue and profit. We have included the presence of major multinational corporations and cities that are highly integrated into the global economy as proxies for business travel. Meanwhile, the number and quality of a country’s universities play an important role in attracting academic travel. Lastly, online searches related to business, academic and medical travel are also measured to imply global interest in a country’s non-leisure resources.

Source: unsplash.com

Environmental Sustainability (15 indicators): This pillar measures the general sustainability of an economy’s natural environment, protection of its natural resources, and vulnerability to and readiness for climate change. The importance of the natural environment in providing an attractive location for tourism cannot be overstated, so policies and factors enhancing environmental sustainability are an important aspect of ensuring a country’s future attractiveness as a destination. Water stress, marine and air pollution, loss of forest cover and the degree of extinction risk for species provide an insight into the status of a country’s environment. Additionally, public- and private-sector protection of the environment and national parks and the ratification of international environmental treaties indicate the degree to which the government and the private sector are preserving the natural assets that generate nature-based T&T. Lastly, metrics related to greenhouse gas emissions (GHGs), the use of renewable energy, investment in green infrastructure and exposure to weather-related events are important in understanding how exposed, ready and willing a country is to address climate change, which in itself is one of the greatest long-term threats the T&T sector faces.

Socioeconomic Resilience and Conditions (7 indicators): This pillar captures the socio-economic well-being and resilience of an economy. Gender equality, inclusion of a diverse workforce, greater workers’ rights and reducing the number of young adults not in education, employment or training are all important for improving employee productivity and creating a larger and higher-quality labour pool. This is particularly important for the T&T sector as it often employs an above-average number of women, members of minorities and youths. Investment in and greater coverage of social protection services such as child and maternity support, unemployment and disability benefits are also key to making the labour market more resilient in the face of economic downturns and other shocks. Furthermore, combined with access to basic resources, as measured by poverty rates, all of the factors above play a role in broader social and economic stability, which affects investment in T&T.

Travel and Tourism Demand Pressure and Impact (7 indicators): This pillar measures factors that may indicate the existence of, or risk related to, overcrowding and demand volatility, as well as the quality and impact of T&T. The T&T sector does not operate in a vacuum. Unmanaged tourism development can lead to destinations operating beyond their capacity, leading to overcrowding, damaged natural and cultural resources, strained infrastructure, increased housing prices and overall reduced liveability for local residents. If left unaddressed, such issues can lead to a backlash by residents towards tourism, reduced visitor satisfaction and lower overall destination attractiveness, all of which negatively affect T&T development. Aspects measured include length of visitor stays, tourism seasonality, proxies for the dispersion of tourism, and the distribution of T&T economic benefits to local communities. Such factors can all help mitigate these issues by lowering the strain on destination capacity, creating resident buy-in, promoting more travel options and markets, and enriching travellers’ experiences.

1.2 Data and methodology

Most of the dataset for the TTDI is statistical data from international organizations, with the remainder based on survey data from the World Economic Forum’s annual Executive Opinion Survey, which is used to measure concepts that are qualitative in nature or for which internationally comparable statistics are not available for enough countries.

The sources of statistical data include, but are not limited to, AirDNA, Bloom Consulting, Euromonitor International, IATA, ICAO, the International Labour Organization (ILO), the International Telecommunications Union (ITU), the International Union for the Conservation (IUCN), STR, Tripadvisor, UNESCO, UN Statistics Division, UNWTO, the World Health Organization (WHO), World Bank, CIA World Factbook, WTO, WTTC and the World Database on Protected Areas (WDPA). The overall TTDI score is computed through successive aggregations of scores, from the indicator level (e.g. the lowest, most disaggregated level) through the pillar levels, using a simple average (i.e. the arithmetic mean) to combine the components. Scores on each indicator are first normalized and rated on a common scale.

1.3 Country coverage

The TTDI covers 117 countries. Economies that were covered in the TTCI 2019 but are not covered in the TTDI 2021 are Algeria, Brunei Darussalam, Burkina Faso, Burundi, Democratic Republic of the Congo, Ethiopia, Eswatini, Gambia, Guinea, Haiti, Iran, Jamaica, Liberia, Mauritania, Mozambique, Norway, Oman, Russian Federation, Seychelles, Uganda, Ukraine, Zimbabwe and Taiwan, China.

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