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Booming tourism approaches tipping point

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Travel and tourism is booming – but the combination of cheaper travel and few tourist barriers could be creating unsustainable demand that pushing the sector towards a tipping point.

The World Economic Forum has released its latest Travel and Tourism Competitiveness Report (TTCR) that ranks 140 countries on their relative strengths in tourism and travel.

The study found that international tourist arrivals surpassed 1,4-billion in 2018, beating predictions by two years – and potentially hastening the tipping point.

As travel and tourism growth continues to outpace predictions, travel hotspots will start to feel their infrastructure and services under pressure to meet demand. Furthermore, emerging travel markets will also feel over-tourism pressures as their institutions try to keep up.

The top 10 countries for tourist arrivals are the same as last year: Spain, France, Germany, Japan, the US, the UK, Australia, Italy, Canada and Switzerland.

Together, these countries account for over a third of international arrivals, showing a heavy concentration of travel today.

The top 25% of countries account for over two-thirds of arrivals.

This combination of concentration of tourist arrivals and rapid travel growth is putting a strain on travel hotspots, despite relatively high infrastructure and travel services scores.

The report finds travel and tourism competitiveness to be growing around the world. This is important considering the industry contributed over 10% to world GDP and about the same to global employment in 2018, according to the World Travel and Tourism Council. This contribution is expected to rise by almost 50% in the next decade due to the expanding global middle class, particularly in Asia.

“With travel barriers and travel costs declining, many countries have been significantly increasing their competitive position in global tourism,” says Christoph Wolff, head of mobility at the World Economic Forum. “Countries can leverage this opportunity to generate economic and development returns, but they must address gaps in infrastructure and environmental protection to make sure these returns can be achieved over the long-term.“

A link between overall economic versus travel and tourism competitiveness was also explored. The average score for more productive high-income countries was about 38% higher than the average score for low- to lower-middle-income countries. The report suggests that lower-income countries with similar levels of natural resources as higher-income countries can use their natural assets to drive broader economic development through direct investments and related policy vehicles in travel and tourism.

Sub-Saharan Africa is the lowest ranking travel and tourism region in this year’s report, with all but three of the 36 countries studied performing lower than the global average. Mauritius (54, +1), is the highest-ranking country in the region, largely due to a good business environment and, by comparison to its peers, high health and hygiene and international openness scores. The country is followed by South Africa (61, -8) and Seychelles (62).

Despite its lower rankings, Africa is expected to have the second highest growth rate over the next 10 years, potentially bolstering its attractiveness to international investments in travel and tourism. Moreover, the region has massive potential for nature-based tourism thanks to its relatively underdeveloped, but rich, natural resources.

Rwanda (107, -10) currently leads the region in safety and security, ranking 31st in this pillar, but has seen its ranking in this area slip 22 spots from the last travel and tourism report and the country fell 11 spots overall. Tanzania (95, -4) is another leading country in the region, ranking first in sub-Saharan Africa for natural resources and 12th in this category globally.

Considered by sub-region, southern Africa is the most competitive, especially outscoring the other sub-regions in tourist services infrastructure, prioritisation of travel and tourism and price competitiveness. Eastern Africa comes second among the sub-regions and Western Africa comes third. However, the report also finds that Western Africa has seen the highest growth of travel and tourism competitiveness in the region.

 The burden of over-tourism is already being felt by many travel hotspots, and emerging markets are starting to feel the strain.

“Countries must look beyond their short-term gains from travel and tourism to ensure a positive future for their economies,” says Lauren Uppink, head of aviation, travel and tourism at the World Economic Forum, “Travel and tourism can drive economies, but only if policy-makers ensure proper management of their tourism assets, which requires a holistic, multi-stakeholder approach.”

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