by Jim Pratt
Whether for business or pleasure, travel remains strong. This comes even in the face of challenges globally, as global travel and tourism is expected to finish 2015 up 3.8%, reaching a total contribution of US$7.8 trillion in GDP according to the World Travel and Tourism Council. Business travel, also on the rise, looks to contribute US$1.25 trillion of this, a 6.4% growth rate over 2014 according to the Global Business Travel Association.
A Highly Resilient Sector
Both global tourism and business travel are growing in spite of economic, political, and other speedbumps impacting both departures and arrivals.
David Scowsill, President & CEO, WTTC, said: “Travel & Tourism is a tremendously resilient sector. Despite a number of terrible regional incidents throughout the year, the sector will still grow 1% faster than global GDP in 2015.”
China a Leader, Other Markets to Follow
Even in the face of economic struggles, China is set to pull away as the global leader over the next five years. According to GBTA, China business travel will increase by 61 percent over the next 5 years, from $261 billion in 2014 to $420 billion in 2019. That increase is greater than the increases in business travel growth in the next 8 largest countries combined, including the U.S., Germany, India, U.K., Indonesia, France, Turkey and Japan.
In the entire travel market, China (7.7% growth) is outpaced only by India (8.1%) and Saudi Arabia (7.9%) in 2015, according to the WTTC mid-year report.
With investments from established brands and startups vying for position in China, the country’s travel market—both outgoing and incoming—is something to watch in the next decade.
Among other markets to watch,
- India: A candidate for breakout growth, India’s developing middle class and massive population positions the country for 8.1% growth, 11.5% growth in business travel, expected to reach $45 billion in business travel in 2019
- Indonesia: 5.6% overall travel growth, listed as a country to watch in the GBTA report
- Malaysia: Joining Indonesia and much of the South Pacific, Malaysia is expected to become a top business travel player as well as a top travel and tourism market.
- Turkey: Overcoming political and geographic hurdles, Turkey lands among the GBTA top 5 for business travel, as well as seeing 3.0% travel and tourism growth overall.
- Poland: As growth stagnates in both established Western European countries and declines in Russia, Poland is forecast as a growth country, especially in business travel.
- Mexico: While much of Latin America looks bleak, Mexico is on the rise, both in terms of business travel and overall travel and tourism. Listed as a travel market of the future by GBTA, Mexican travel is growing at 5.8% overall, according to WTTC.
Travel and Tourism Investment Leading Monetary Impact
On the horizon, investment in travel and tourism is expected to grow at a 4.6% clip, outpacing visitor exports and domestic spending. The strong forecast investment growth is in line with an expected acceleration in economywide investment and is a reflection of the modest strengthening of the global economy and consequent enhanced confidence from investors, alongside the availability of capital due to low interest rates and large corporate cash stockpiles.
2025: Travel and Tourism to Make Up 10% of Economy and Employment
As highlighted in the WTTC Report, Travel and Tourism is expected to grow 3.7% each year, expected to reach US$11.7 trillion by 2025, supporting 355 million jobs and accounting for 10.5% of the global economy:
“Over the ten-year period to 2025, the recent and short-term strong growth of the Travel & Tourism sector is expected to continue, with forecast average annual Travel & Tourism GDP growth of 3.7%. As such, we expect that the growth of the sector will continue to outpace that of the wider economy. By 2025 it is anticipated that Travel & Tourism will contribute US$11.3 trillion in GDP to the world economy (2014 prices and exchange rates) and will support 355 million jobs globally, which is expected to translate to approximately 10.5% of the world economy in terms of both GDP and employment.”
Please read the GBTA press release for more information.
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