Continued sluggish recovery will see the travel and tourism industry’s year-on-year contribution to global GDP rise by less than one third in 2021, according to new research from the World Travel & Tourism Council (WTTC).
In 2019, the sector generated nearly US$9.2 trillion to the global economy, however in 2020, the pandemic brought it to an almost complete standstill which resulted in a 49.1% drop, representing a punishing loss of nearly US$4.5 trillion.
While the global economy is set to receive a modest 30.7% year on year increase from travel and tourism in 2021, this will only represent US$1.4 trillion and is mainly driven by domestic spending.
The economic modelling was conducted by Oxford Economics on behalf of WTTC and calculated a baseline scenario based on the current global vaccination rollout, consumer confidence and relaxed travel restrictions in some in regions around the world.
The research reveals that at the current rate of recovery, the sector’s contribution to the global economy could see a similar moderate year on year rise of 31.7% in 2022.
Last year, WTTC revealed the loss of a staggering 62 million travel and tourism jobs around the world and with the current pace of recovery, jobs are set to rise by only 0.7% this year.
Similarly, research shows a more hopeful potential year-on-year jobs rise across the sector next year, by a positive 18%.
Julia Simpson, WTTC president & CEO observed that: “Our research clearly shows that while the global Travel & Tourism sector is beginning to recover from the ravages of COVID-19 there are still too many restrictions in place, an uneven vaccine rollout, resulting in a slower than expected recovery of just under a third this year.”
Simpson continued: “Last year, 62 million Travel & Tourism jobs were lost globally, and our data shows a rise of a meagre 0.7% this year. While next year is looking more positive in terms of the global economy and jobs, the current rate of recovery is simply not fast enough and is in the most part driven by domestic travel, which will not achieve a full economic recovery.”
And she pointed out that: “If governments can start looking internationally and support Travel & Tourism with simplified rules to enable the safe return of travel, there is the opportunity to save jobs and boost economic wealth.”
According to the research, the sector’s contribution to global GDP and the rise in jobs could be more positive this year and next, if the following measures are met:
- Allow fully vaccinated travellers to move freely, irrespective of their origin or eventual destination, removing complex tiered systems.
- The implementation of digital solutions which enable all travellers to easily prove their COVID status, so in turn speeding up the process at borders around the world.
- Recognition of all vaccines authorized by the World Health Organization (WHO) and/or any of the Stringent Regulatory Authorities (SRA).
- Agreement from all relevant authorities that international travel is safe with enhanced health and safety protocols.
The research shows that if these four vital rules are followed before the end of 2021, the impact on the global economy and jobs could be significant.
According to the data, the sector’s contribution to the global economy could jump by 37.5% – reaching US$6.4 trillion this year (compared to US$4.7 trillion in 2020).
However, there is still hope if restrictions continue being lifted and with more international cooperation, governments could bring back nearly 19 million jobs before the year ends (up 6.8%).
The trend continues into next year when the sector’s contribution to the global economy could see a year on year rise of 34%, reaching US$8.6 trillion, close to 2019, a record year for travel and tourism. Similarly, jobs could surpass 2019 levels – up 20.1% year on year, to more than 349 million.