By Onome Amuge.
Travel & tourism investments is on a pathway to overturning pandemic setbacks , with its value projected to reach $955 billion in 2023, according to the latest report by the World Travel & Tourism Council (WTTC).
The WTTC report titled “Travel & Tourism Economic Impact 2023 Global Trends Report”,predicts a 11.5 per cent growth in investment for the year as it resurges to pre-pandemic levels against the backdrop of pent-up demand.
According to the report, the investment landscape, buoyed by a significant rise in demand, has surged to about $856 billion so far, indicating a 11.1 per cent increase from the preceding year.
Though the figure fell short of the 2019 benchmark by 22.5 per cent, the report showed that it represented a 53 per cent increase over 2000 levels, reflecting the industry’s steadfast growth trajectory.
Notably, Asia-Pacific and Africa outperformed other regions as investments in the regions in 2022 were 161 per cent higher than those recorded in 2000.
In contrast, Europe and the Middle East recorded weaker growth patterns, as pandemic disruptions offset their two-decade progress.
The United States topped the list of markets with the highest investment in the sector for 2022 as it contributed about $213 billion worth of investments to the sector, closely followed by China with a $146 billion investment. Saudi Arabia secured the third spot with an investment of $2 billion.
Meanwhile, island destinations emerged as frontrunners in terms of travel & tourism investment as a percentage share of their respective economies in 2022. The US Virgin Islands secured the lead by channeling a 35 per cent of their economic investment into the sector. Antigua and Barbuda followed closely with 34 per cent and Aruba recorded nearly 32 per cent for the third spot.
WTTC forecasts a promising 6.1 per cent average annual growth globally, with the strongest annualised growth rates projected to be in Asia-Pacific and the Caribbean.
The report also highlighted the significance of investment in boosting the sector’s capacity, citing the key roles played by private investments in assets such as aircraft, hotels, and vehicles, complemented by public investments. This, it noted, results in increased job opportunities, robust economies, and stronger communities.
However,the report warned that the global hike in interest rates creates challenges for future investment. This is as central banks globally continue to increase interest rates to combat rising inflation, leading to increases in the cost of borrowing and products.
“Higher interest rates could present a risk to future investment in the sector so it’s crucial that the public and private sectors work together to innovate to ensure the continual strengthening of this vital sector, “ WTTC said.
Julia Simpson, WTTC President & CEO, described investment in travel & tourism as not just a numbers game; but the heartbeat of global connectivity and economic revival. She pointed out that despite the setbacks from the pandemic, 2022’s growth is a promising sign of positive investments to come. .
Commenting on the impact of investment in travel & tourism to the world’s recovery and growth, Simpsodn said, “The sector’s resilience and potential for innovation continues to drive us forward. We remain confident, yet vigilant, in our pursuit of a brighter, more connected global future.”