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Global Economic Impact and Issues 2017

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  TRAVEL & TOURISMGLOBAL ECONOMIC IMPACT& ISSUES 2017  FOREWORD For over 25 years, the World Travel & Tourism Council (WTTC) has been quantifying the economic and employment impact of Travel & Tourism. The 2017 Annual Economic Reports cover 185 countries and 26 regions of the world, providing the necessary data on 2016 performance as well as unique ten year forecasts on the sector’s future potential. Travel & Tourism: Global Economic Impact and Issues 2017   has a different style this year, building on the flagship economic impact research which shows the breadth of the data available, to give more insights behind the numbers and to provide a fascinating view of Travel & Tourism now and into the future.Despite the increasing and unpredictable shocks from terrorist attacks, political instability, health pandemics, and natural disasters, Travel & Tourism continued to show resilience in 2016. For the sixth successive year, growth in the sector outpaced that of the global economy. The outlook for business and leisure travel in 2017 remains robust. Over the longer term, growth of the Travel & Tourism sector will continue to be strong, as long as governments continue to invest in the necessary infrastructure. The United Nations has designated 2017 the International Year of Sustainable Tourism for Development  . Travel & Tourism creates  jobs, drives exports, and generates prosperity across the world. The International Year provides an enormous opportunity to further showcase the tremendous economic, social, cultural, environmental, and heritage value that the sector brings to people of all nations. 292 million jobs are provided by this sector, which now accounts for 1 in 10 jobs in the global workforce. By 2027, it is anticipated that our sector will be supporting over 380 million jobs, as Travel & Tourism continues to grow its economic contribution. Future growth and success for the sector also depends on recognising trends which will drive future travel habits and consumer expectations. WTTC Industry Partners have contributed their expertise and insights in a set of stimulating articles, which are contained within this new style report. These leading global companies provide valuable products and services to the sector, and we appreciate them joining the conversation about business and leisure travel. Contributions in this report highlight some areas where businesses will need to focus as they drive their future growth.The right policy and planning decisions are best made with authoritative, reliable, and accessible data, combined with expert marketplace insights. WTTC is proud to provide the evidence base required, which helps both public and private bodies make the correct decisions for the future growth of a sustainable Travel & Tourism sector.David Scowsill President & CEO TRAVEL & TOURISM: GLOBAL ECONOMIC IMPACT & ISSUES 2017For more information, please contact: ROCHELLE TURNER |  Research Directorrochelle.turner@wttc.org EVELYNE FREIERMUTH |  Policy & Research Managerevelyne.freiermuth@wttc.org    G   L   O   B   A   L   E   C   O   N   O   M   I   C   I   M   P   A   C   T   &   I   S   S   U   E   S   2   0   1   7 CONTENTS GLOBAL OUTLOOK 1 The top numbers on the global contribution of Travel & Tourism, today and into the future. REGIONAL OUTLOOK 5 An overview of the main regional numbers, and highlights of key developments. COUNTRY HIGHLIGHTS 7 HOW MONEY TRAVELS 11 INDUSTRY PARTNER INSIGHTS 12 Insights into major trends and issues, from the expertise of our WTTC Industry Partners. COUNTRY LISTING 26 “This is the sixth year in a row that Travel & Tourism has outpaced the global economy, showing the sector’s resilience, and the eagerness of people to continue to travel and discover new places, despite economic and political challenges across the world.”  David Scowsill, President & CEO, World Travel & Tourism Council  1/10 Travel & Tourism is a key sector for economic development and job creation throughout the world. In 2016, Travel & Tourism directly contributed US$2.3 trillion and 109 million jobs worldwide. Taking its wider indirect and induced impacts into account, the sector contributed US$7.6 trillion to the global economy and supported 292 million jobs in 2016. This was equal to 10.2% of the world’s GDP, and approximately 1 in 10 of all jobs. TRAVEL & TOURISM’S CONTRIBUTION TO THE WORLD’S ECONOMY Travel & Tourism’s impact includes people travelling for both leisure and business, domestically and internationally. In 2016, 76.8% of all travel spend was as a result of leisure travel, compared to 23.2% from business travel.Domestic travel generated 72% of the sector’s contribution to GDP, thus making a significantly larger contribution than international travel, with foreign visitor spending at 28% TRAVEL & TOURISM’S CONTRIBUTION TO GLOBAL GDP 2016 Business vs Leisure / Domestic vs Foreign SpendingTravel & Tourism is an export sector, attracting foreign spending to a country in the form of international visitors. In 2016, global visitor exports accounted for 6.6% of total world exports (a total of US$1.4 trillion) and almost 30% of total world services exports. 2016 GROWTH Travel & Tourism’s direct contribution to GDP grew by 3.1% in 2016. This was faster than the global economy as a whole which grew at 2.5%, meaning that for six consecutive years, the Travel & Tourism sector has outperformed the global economy. The direct contribution of Travel & Tourism to employment grew by 1.8% in 2016 meaning almost 2 million net additional jobs were generated directly by the sector, and a total of around 6 million new jobs created as a result of total direct, indirect and induced activity. This means that almost 1 in 5 of all new jobs created in 2016 were linked to Travel & Tourism. ANNUAL GROWTH TERRORISM Visitor exports growth in 2016 suffered somewhat from continued terrorism and knock-on impacts to sentiment, despite air travel remaining comparatively cheap with the low level of oil prices and a number of countries adopting more visitor-friendly visa policies. In Europe, there were contractions in inbound tourism spending in Belgium, France and Turkey, while inbound visitor spending continued to contract in Egypt after weakness in 2015, with international tourist arrivals now over 60% below the 2008 peak level. However, while the Travel & Tourism sectors in these countries have suffered, several other destinations have profited by being seen as ‘safe-haven’ substitute destinations. Specifically, inbound tourism to Bulgaria and Cyprus picked up noticeably in 2016, while Malta, Portugal and Spain appear to have benefited also.Forecasts for 2017 are positive, but unfortunately considerable downside risks to the international Travel & Tourism spending outlook due to the continued threat of terror remain. WEST & EAST MED: VISITOR EXPORTS GLOBAL OUTLOOK HEALTH CARE & SOCIAL WORKFINANCIAL SERVICESINFORMATION & COMMUNICATIONRETAIL & WHOLESALE DISTRIBUTIONCONSTRUCTIONMANUFACTURINGAGRICULTURE, FORESTRY & FISHERIES TRAVEL & TOURISM2.8%2.5%4.2%2.3%2.8%2.4%2.7%3.1% 23% BUSINESS SPENDING 77% LEISURE SPENDING 28% FOREIGN VISITOR SPENDING 72% DOMESTIC SPENDING 6%5%4%3%2%1%0%2011 2012 2013 2014 2015 2016 GLOBAL GDP DIRECT T&T GDP In addition to outpacing global economic growth, the Travel & Tourism sector also outperformed several other major global economic sectors in 2016. Specifically, direct Travel & Tourism GDP growth was stronger than the growth recorded in the financial and business services, manufacturing, public services, retail and distribution, and transport sectors, but was marginally slower than growth in the communications sector. WORLD INDUSTRY GDP GROWTH      T     O     T     A     L     D     I     R     E     C     T F CUS 220200180160140120100802000 2002 2004 2006 2008 2010 2012 2014 2016 EASTWEST Indexed: 2000=100 OF ALL JOBSWORLDWIDE TRAVEL & TOURISM: GLOBAL ECONOMIC IMPACT & ISSUES 2017 | 21  | WORLD TRAVEL & TOURISM COUNCIL  OUTLOOK FOR 2017 In 2017, the total contribution of Travel & Tourism to the world’s economy is forecast to grow by 3.5%.Continued solid growth at a global level is expected across the main economic indicators of GDP contribution, job creation, investment and visitor exports, with visitor exports making an especially strong contribution.The outlook, however, varies across the different outbound markets.ã With the dollar strength expected to persist, 2017 is forecast to be another strong year for the USA, with growth of 5.4% in outbound Travel & Tourism spend expected. The most likely beneficiaries of this strong growth will be other North American destinations such as Canada and Mexico as well as Caribbean and Mediterranean destinations.ã In China, after 7 consecutive years of annual growth in excess of 20%, outbound spending is expected to cool slightly, yet remain very strong by international standards, with growth of 12.0% expected in 2017.ã The depreciation of sterling is forecast to continue during 2017, which is expected to lead to a substantial slowdown in outbound Travel & Tourism spending growth from the UK, from 8.0% in 2016 to a contraction of 4.2% in 2017. The markets most likely to suffer as a consequence are European destinations and longer-haul travel to the USA. GLOBAL OUTLOOK 52.6%21.2%11.1% 6.4%5.3% T&T GLOBAL GROWTH 2017OUTBOUND TRAVEL EXPENDITURE BY COUNTRY Percentage of global total (2016) 5%4%3%2%1%0%3.6%3.8%4.1%3.7%4.5%Total T&T GDPDirect T&T GDPDomestic T&T GDPVisitor ExportsT&T InvestmentRESTCHINAUSAGERMANYUKFRANCE A key challenge for Travel & Tourism in 2017 will be a general slowdown in consumer spending power which will impact consumer spending on Travel & Tourism. The combination of higher inflation caused by recovering oil prices (which could have knock-on impacts for air fares), rising debt servicing costs as interest rates rise, and a slowdown in job creation across the globe is curbing global spending power which is expected to grow at the weakest rate for eight years in 2017. SUSTAINABILITY 2017 is the International Year of Sustainable Tourism for Development, and WTTC – along with the sector as a whole, is increasingly focusing on the issues potentially challenging the future growth of the sector and will be publishing more on this through the year. Sustainability certainly remains an especially important issue for some of the fast growing tourism destinations around the world. One way of looking at this is through the number of international visitors compared to the local population, which provides one indicator of impact tourism may have on the destination. For example, in Iceland in 2016, overnight international tourism arrivals outnumbered the resident population by a ratio of 5.1 to 1. The ratio is also particularly high in growing tourism hotspots like Croatia (3.3 to 1) and Montenegro (2.6 to 1). This ratio highlights destinations where continued strong growth may put a squeeze on infrastructure capacity and could lead to environmental pressures if not managed appropriately. F CUS In 2016, international arrivals to Iceland outnumbered the resident population by 5:1 TEN YEAR FORECASTS Travel & Tourism’s direct contribution to GDP is expected to grow at an average of 3.9% per year over the next ten years. By 2027, Travel & Tourism is expected to support more than 380 million jobs globally, which equates to 1 in 9 of all jobs in the world and the sector is expected to contribute around 23% of total global net job creation over the next decade. Meanwhile, total Travel & Tourism GDP is expected to account for 11.4% of global GDP and global visitor exports are expected to account for 7.1% of total global exports.Furthermore, the sector is expected to outperform the global economy throughout the forecast period and increase its share of global economic activity across each of GDP, employment, exports and investment.In addition to outperforming the global economy over the next ten years, Travel & Tourism is also forecast to outpace a range of other major global economic sectors, including communications, financial and business services, manufacturing and retail and distribution. US$ 7.6 TRILLION TO WORLD GDP292 MILLION JOBSWORLDWIDE OVER THE NEXT 10 YEARS, THE SECTOR WILL… 30% OF TOTAL SERVICE EXPORTS Travel & Tourism is expected to contribute around 23% of total global net job creation over the next decade GLOBAL TRAVEL & TOURISM CONTRIBUTES… SUPPORT 23% OF NEW JOBS CREATEDOUTPERFORM THE GLOBAL ECONOMY 23% TRAVEL & TOURISM: GLOBAL ECONOMIC IMPACT & ISSUES 2017 | 43  | WORLD TRAVEL & TOURISM COUNCIL
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