The travel and tourism sector’s continued sluggish recovery will see its 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). 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 regions around the world.
WTTC said that the recovery of the sector has been hampered by the lack of international coordination, severe travel restrictions and slower vaccination rates in some parts of the world.
In 2019, the travel and tourism sector generated nearly USD 9.2 trillion to the global economy. However, in 2020, the pandemic brought the industry to an almost complete standstill, which resulted in a 49 percent drop, representing a punishing loss of nearly USD 4.5 trillion.
While the global economy is set to receive a modest 30.7 percent year-on-year increase from travel and tourism in 2021, this will only represent USD 1.4 trillion and is mainly driven by domestic spending.
The research reveals that at the current rate of recovery, travel and tourism’s contribution to the global economy could see a similar moderate year-on-year rise of 31.7 percent 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 percent this year.
Similarly, research shows a more hopeful potential year-on-year jobs rise across the sector next year, by a positive 18 percent.
Julia Simpson, WTTC president & CEO said: “If governments can start looking internationally and support travel and 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 travelers to move freely, irrespective of their origin or eventual destination, removing complex tiered systems.
- The implementation of digital solutions, which enable all travelers to easily prove their Covid-19 status, so in turn speeding up the process at borders around the world.
- Recognition of all vaccines authorized by the World Health Organisation (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 percent, reaching USD 6.4 trillion this year (compared to USD 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 percent).
The trend continues into next year when the sector’s contribution to the global economy could see a year-on-year rise of 34 percent, reaching USD 8.6 trillion, close to 2019, a record year for travel and tourism. Similarly, jobs could surpass 2019 levels – up 20 percent year-on-year, to more than 349 million.