Global Travel, Tourism Remain the World’s Powerhouses
The travel and tourism sector grew more in 2018 than all other economic sectors but one, adding a record $8.8 trillion to the world’s combined Gross Domestic Product – up from $8.3 trillion in 2017 - as well as 319 million new jobs.
The larger manufacturing sector saw its contribution to global GDP grow 4 percent in 2018, only slightly ahead of the 3.9 percent growth of travel and tourism’s contribution to global GDP.
The next-fastest growing sector of the global economy last year was the construction industry, generally regarded to still be a boom cycle despite slowing growth in China. It’s impact on global GDP expanded at a rate of 3.4 percent last year.
Two other sectors generally regarded as fast-growing sectors saw their contribution to global DGP at a slower rate than travel and tourism. Retail and wholesale grew at a rate of 3.3 percent in 2018 while healthcare grew 3.1 percent.
The travel and tourism sector’s growth performance, touted recently in numbers released by the World Travel & Tourism Council, highlights the size and growing importance of a sector that is not broadly understood by the public to be as big and as economically important as it actually is.
Overall, travel and tourism generated 10.4 percent of the world’s total economic activity in 2018. That worldwide growth was greatly aided by rapid growth of travel and tourism in regions such as Oceania (Australia, Malaysia, Indonesia and the Southwest Pacific islands), Southeast Asia, India and China.
North America, including Canada, Mexico and the United States, remains the third-largest travel and tourism market. Last year it contributed $1.9 trillion in total economic activity, up 8.2% from 2017.
The largest region in terms of travel and tourism economic impact last year was the similarly mature European market, which generated $2.2 trillion worth of travel and tourism-related economic activity. Northeast Asia, which includes China, ranked second with $2.1 trillion in travel and tourism-driven economic activity last year.
But of the 10 largest travel and tourism regions in the world, North America is growing slowest. The fastest-growing is the Caribbean region, which saw travel and tourism generate $62 billion, or 15.5 percent more economic activity than in 2017. Southeast Asia’s travel and tourism sector saw its economic activity rise 12.2 percent, to $373 billion.
The rest includes Oceania (12.2 percent, $206 billion), Europe (9.7 percent), Northeast Asia (9.6 percent), South Asia (India primarily, 8.8 percent, $296 billion), Latin America (8.7 percent, $336 billion), The Middle East (8.7%, 237 billion) and Africa (8.5 percent $194 billion).
By itself the United States remains the largest travel and tourism market when considering individual nations rather than regions. Travel and tourism contributed $1.6 trillion to the nation’s GDP. That’s equal to 7.8 percent of the U.S. economy. The sector grew in this country last year by 2.2 percent.
The WTTC's president, Gloria Guevara, says travel and tourism now is responsible for creating one out of every five new jobs worldwide. The global lobby group expects travel and tourism to generate 100 million new jobs worldwide over the next 10 years. That would push the total number of people working in travel and tourism to 421 million by 2029.
But there is one area of concern. For rather obvious global political reasons, travel from China to the United States was flat in 2018 vs. the previous year. That followed a full decade in which the growth in Chinese travel to this country averaged 23 percent a year.
As a result, now about 11 percent of all economic activity in this country related to travel and tourism is generated by Chinese visitors.
That’s why U.S. travel and tourism companies and organizations are hopeful that solutions to the currently-strained U.S.-China trade relationship, featuring tariffs imposed by President Donald Trump on the importation of many Chinese-made goods, can be reached sooner rather than later.
Guevara also noted that any improvement in U.S.-China trade relations likely would have a large positive impact on both nations’ overall economies.