tourist growth chart

By Bastian Herre, Veronika Samborska and Max Roser

Tourism has massively increased in recent decades. Aviation has opened up travel from domestic to international. Before the COVID-19 pandemic, the number of international visits had more than doubled since 2000.

Tourism can be important for both the travelers and the people in the countries they visit.

For visitors, traveling can increase their understanding of and appreciation for people in other countries and their cultures.

And in many countries, many people rely on tourism for their income. In some, it is one of the largest industries.

But tourism also has externalities: it contributes to global carbon emissions and can encroach on local environments and cultures.

On this page, you can find data and visualizations on the history and current state of tourism across the world.

Interactive Charts on Tourism

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Travel & Tourism Development Index 2021: Rebuilding for a Sustainable and Resilient Future

4. Key findings

Several key findings have been identified in the Travel & Tourism Development Index (TTDI) 2021 results and research. First, the need for T&T development has never been greater as it plays a critical role in helping the global economic recovery by supporting the livelihoods of some of the populations hardest hit by the pandemic and by building resilience, especially when it comes to lower-income countries. Moreover, by investing in the factors that help drive T&T, many economies can leverage tourism to further their overall development. The need for T&T development has never been greater as it plays a critical role in helping the global economic recovery.

Second, the key findings show not only how ongoing challenges such as reduced capacity and labour shortages are tempering the recovery but also how shifting demand has created opportunities, forcing many T&T businesses and destinations to adapt, highlighting the sector’s impressive flexibility. Third, the analysis explores in more detail how various aspects and drivers of T&T development can be more thoughtfully and effectively considered and employed to bolster the recovery and build a more inclusive, sustainable and resilient T&T sector.

4.1 The need for Travel and Tourism development has never been greater

The case for t&t development.

As already alluded to in the global context section above, the T&T sector’s significant contribution to global economic and social development makes its recovery and long-term growth paramount. In 2019, the sector’s direct, indirect and induced output accounted for about 10% of global GDP. Moreover, for many emerging economies, T&T is a major source of export revenue, foreign exchange earnings and investment. On average, out of the economies covered by the TTDI, T&T contributed 70% more towards the exports of middle-income economies than to the exports of high-income economies in 2019. 10 Consequently, restoring T&T sector growth will be particularly vital for developing economies’ recovery. For instance, the World Bank forecasts that emerging markets and developing economies (EMDEs) will not return to pre-pandemic economic output trends until after 2023, with more than 80% of tourism-reliant EMDEs still below their 2019 economic output at the end of 2021. 11 Recent concerns about the slowdown in globalization and trade due to the impact of the pandemic and geopolitical tensions 12 further enforce how important T&T is for global connectivity.

It is also important to note that T&T is vital not only to overall economic performance but also to the livelihood of some of the populations and businesses most vulnerable to, and hardest hit by, the pandemic. This sector contributed to about 10% of global jobs in 2019, 13 employs almost twice as many women as other sectors, has a large share of youth employment and is a major source of jobs for minorities, migrants, informal workers and low-skilled workers. 14 Moreover, SMEs account for more than 80% of T&T businesses. 15 Unsurprisingly, research has shown that T&T growth can support social progress and create opportunities and well-being for communities. 16 Consequently, investing in T&T could not only mitigate the impact of the pandemic but also improve socioeconomic progress and resilience.

Enabling the T&T development landscape

With the case for T&T’s recovery and development clear, it will be critical to focus on and invest in the factors and policies (beyond the critical need for vaccine distribution) that can help enable these goals, many of which are measured by the TTDI. World Economic Forum research shows that TTDI performance correlates with direct T&T GDP, international tourist arrivals and receipts. 17

Figure 3: Travel and Tourism economic and enabling development landscape

Figure 3 can help us understand which economies are likely to be best positioned from a T&T recovery and resiliency point of view, and which may need to prioritize greater investment in T&T enabling factors. This is illustrated by comparing the TTDI scores to economic dependence on T&T. Low- and middle-income economies tend to score below the TTDI average, indicating a potential constraining factor for their economic recovery. In particular, economies in the bottom-right quadrant would gain the most by investing in the drivers of T&T development because they are more dependent on the sector for economic development. Such investment will help their economic recovery by enabling stronger tourism growth as well as supporting their overall economies to be more robust and resilient. On the other hand, while economies in the bottom left are less dependent on T&T, their below-average TTDI score may indicate that their conditions are leading to an underuse of the sector’s ability to drive development, weakening their economic potential – a resiliency issue in itself.

Higher TTDI scores for economies in the top two quadrants indicate that they are more mature markets and are best positioned for the sector’s recovery. Countries in the top-left quadrant are in a more optimal position from a resiliency point of view as they have favourable conditions for T&T operations but are also less reliant on it for their overall economic performance. However, that is not to say that T&T does not play an important role in their overall economic development, especially at the local level and for specific segments of the labour force and SMEs. Meanwhile, economies in the top-right quadrant, like those below them, have also been more vulnerable to the impact of the pandemic, especially given that analysis shows they are typically more reliant on the export of T&T services. These factors may limit their ability to recover economically from the pandemic, but they are also better positioned to generate tourism-led economic growth as international tourism returns. In general, for the most mature T&T countries such as those higher in the top quadrants, sector performance and resilience may be less about making major improvements in aspects of T&T development such as infrastructure and more about continuously calibrating their T&T strategies to adapt to changing demand dynamics, local needs and overall T&T trends.

Figure 4: TTDI 2021 pillar performance

Figure 4 shows in more detail what gaps remain to achieving improved T&T performance and development for various countries. High-income economies and countries in the Europe and Eurasia (Europe) and Asia-Pacific (APAC) regions tend to lead the overall index in results. Among the largest differentiators between index leaders and laggards are: the distribution and promotion of natural, cultural and non-leisure assets and activities; the availability of quality transport and tourist service infrastructure; the degree of international openness; and favourable factors such as (increasingly important) ICT readiness and health and hygiene. However, as shown in the Travel and Tourism Competitiveness Report 2019, because T&T growth is so dependent on factors such as infrastructure and health and hygiene, which if improved bring benefits to more than the tourism sector, sector leaders can play a valuable role in encouraging investment that benefits a country’s economy as a whole. This is especially true for developing economies that have innate natural and cultural assets around which to mobilize investment. 18 The next section detailing key findings will use the TTDI results to discuss the T&T challenges and opportunities created over the past few years, as well as examining how various drivers of T&T development can be employed to bolster T&T recovery and build a more inclusive, sustainable and resilient T&T sector, thereby unleashing its potential for economic and social progress.

4.2 Recovery challenges and shifting demand dynamics

The results highlight difficult operating conditions.

While varying greatly based on local, segment, national and regional conditions, the TTDI results and research help highlight some of the various and common operational challenges the T&T sector faces in its recovery.

With T&T activities being severely restricted over the past few years, the greatest decline in index performance has come from the contraction of related operations and investment. As such, average scores fell in the Air Transport Infrastructure (-9.4%), Prioritization of Travel and Tourism (-6.7%) and Tourist Service Infrastructure (-1.5%) pillars. Air route capacity and airport connectivity plummeted, especially in more mature and high-income economies. Similarly, the decline in tourist service infrastructure reflects initially reduced capacity in the accommodation and related segments. The average number of per capita short-term rental units dropped by about one-fifth between mid-2019 and 2021 across economies ranked in the index. 19 While not reflected in the TTDI results, STR data indicates that, over a similar timespan, the number of hotel rooms did not recover to pre-pandemic levels in many countries. 20 In line with these trends, both T&T capital investment and government T&T expenditures also fell. The decline in sector capacity has also been compounded by the fact that most businesses are SMEs and do not have the means to survive prolonged drops in demand or restrictions on person-to-person contact. The disproportionate impact of the pandemic on the sector is indicated by the direct T&T contribution to global GDP falling from 3.2% to 1.6% and the contribution to global employment falling from 3.8% to 3.1% between 2019 and 2020. 21

Figure 5: Select pillar 2019 to 2021 average score change

Yet, as demand resumes in line with easing travel restrictions and somewhat improving COVID-19 conditions, the initial reductions in capacity increase the potential for supply-side constraints. In advanced economies, in particular, rising demand, earlier layoffs that disproportionality hit T&T, and competition for talent with other sectors have resulted in widespread labour shortages. A WTTC report focusing on the United States, the United Kingdom, France, Spain, Italy and Portugal estimates that the T&T sectors in these countries experienced staff shortfalls ranging from 9% to 18% in 2021. 22 The interconnected nature of the T&T supply chain and ecosystem has also created challenges. Hotels, airlines, car rental firms, tour operators, cruise lines and others all form a chain of service providers dependent on each other along the traveller journey. Bankruptcies or other disruption issues at any point along this chain have the potential to negatively affect the others.

"In addition to labour shortages and capacity constraints, the sector has also been exposed to broader global disruptions that are complicating recovery."

Over the course of the pandemic, growth in merchandise trade coincided with production, worker, equipment and space shortages to create a global supply-chain crisis. For instance, hotels have faced shortages of items ranging from slippers for clients to kitchen equipment. 23

The recent outbreak of war in Ukraine and resulting sanctions and travel restrictions related to Russia have added further pressure on the recovery. Airlines around the world have had to reroute operations, increasing travel times and costs. Meanwhile, the still fragile recovery in international tourism demand could be tempered by increased hesitancy among travellers when it comes to visiting Europe. 24 Many T&T economies in Europe, Eurasia and beyond may also be hard hit due to reduced demand from Russia and Ukraine. Combined, these two economies account for about 3% of international tourism spending, with Russia having been a major source of visitors to destinations ranging from Azerbaijan, Georgia and Turkey to Israel, the United Arab Emirates and Thailand. 25

While not yet fully reflected in the TTDI’s Price Competitiveness pillar, rising travel demand, the stated labour, capacity and other shortages, global supply-chain disruptions and rises in fuel prices and inflation caused by factors such as the war in Ukraine will likely increase costs and service prices throughout the entire T&T supply chain and ecosystem. For example, as of 13 May 2022, jet fuel prices were more than double what they were a year ago, 26 and if they remain high, airline yields and ticket prices will likely rise. 27 Recent UNWTO analysis cites how conflict-induced uncertainty, higher energy and food prices and inflation, in general, are putting pressure on consumer purchasing power and tempering global economic growth, potentially affecting T&T sector performance. Moreover, as economies such as the United States combat inflation by increasing interest rates, consumer demand and T&T investment may be further hit by the rising cost of credit. 28

The pandemic shifts demand dynamics, creating opportunities and driving adaptation

With travel restrictions still common and traveller confidence hampered by pandemic concerns, the past few years have also seen a shift in demand trends in global T&T. According to the UNWTO Panel of Experts, the major trends driving the T&T recovery include domestic tourism, travel close to home, open-air activities, nature-based products and rural tourism. 29 The World Travel and Tourism Council (WTTC) data shows that, on average for the 117 economies covered by the index, domestic spending’s share of T&T spending increased from 50.8% in 2019 to 62.6% in 2020 as domestic demand fared better than collapsing international demand. 30 Moreover, current projections for 2021 show that domestic spending growth is expected to substantially outpace international spend in every region outside of the Caribbean and Middle East. 31

The TTDI results further reinforce the shift in demand dynamics that the world has witnessed. The second most improved pillar is Natural Resources (+2.5% average score increase). While this was driven largely by an expansion in the number of recognized UNESCO World Heritage natural sites and protected areas, such as national parks, the greatest improvement has come from destinations’ ability to garner interest in nature-related segments as illustrated by the 20.8% average growth in natural tourism Digital Demand value, a measure of online searches for topics such as natural wonders, outdoor activities and rural accommodation.

On the other hand, the Non-Leisure Resources pillar had one of the greatest declines in average performance (-1.9%) as business travel declined. While this sector is recovering, it has rebounded at a slower rate than leisure, with factors such as workplace flexibility and the availability of virtual alternatives for in-person meetings tempering demand and potentially leading to some permanent loss in corporate travel. This will force many T&T segments to adapt. For example, operators in the meetings, incentives, conferences and events (MICE) area may have to rely more on smaller and hybrid events. 32 T&T businesses and destinations are increasingly looking to capture opportunities offered by the changing nature of work. Over the course of the pandemic, more businesses have gone virtual, and an increasing share of the labour force is becoming independent.

"In 2020, 10.9 million Americans said they were digital nomads, a 49% increase from 2019."

This sample of independent workers is also increasingly willing to travel. A recent survey showed that the share of US independent workers doing business outside the country jumped from 12% in 2013 to 28% in 2020. 33 Additionally, the trend in “bleisure” travel – the addition of leisure activities to business trips – is also growing. 34

To cater to these growing markets, T&T businesses will have to become more flexible and create new, innovative products. For instance, some major hospitality groups are creating new long-stay properties that include kitchens and living spaces, while other have introduced packages that offer reduced rates for those staying longer, which include IT and boardroom services. 35 Furthermore, while virtual business may require less office space, corporations and their employees may need options for occasional company meetings and events that the sector could provide. However, it is important to note that these new market opportunities are primarily for the high-end travel market and are not likely to replace the overall loss in business travel. Lastly, T&T operators have also had to introduce more flexible booking and cancellation policies in order to address uncertainty about travel regulations and the pandemic, in addition to increased consumer desire to make last-minute changes or to add leisure stays to their business trips. 36

From a destination point of view, many governments have also adapted to changing conditions to take advantage of shifting demand dynamics. For one thing, many countries have provided various incentives to boost domestic tourism. For example, Hong Kong, Singapore, South Korea and Japan have rolled out various programmes that provide discounts, coupons and subsidies for domestic travel. 37 Meanwhile, Aruba targeted the digital nomad market through extended work visas and other benefits via its One Happy Workation programme. 38 The trends towards more rural and nature-based tourism also offer an opportunity for less-developed economies to harness the benefits of T&T given that the distribution and quality of natural assets are less tied to overall economic development, with Natural Resources being one of the few pillars where non- high-income economies typically outperform high- income countries (see Figure 6).

Figure 6: Composition of top quartile, by income group

Overall, the above adaptations to shifting demand and COVID-19 conditions help highlight how flexible T&T business and destinations can be in times of crisis. As the sector rebuilds and addresses future risks, its adaptability will become more crucial than ever. In particular, as can be seen in the key findings that follow, the shift to domestic and nature-based travel, as well as other trends, coincides with an increased emphasis on sustainable and safe travel. Therefore, T&T development will have to become increasingly sustainability-oriented.

4.3 Building back better

Given the current challenges, shifting demand dynamics and future opportunities and risks, it is vital that T&T development strategies are employed to rebuild the sector in a more inclusive, sustainable and resilient manner.

Restoring and accelerating international openness and consumer confidence, including investment in health and security

For starters, as travel restrictions are removed, ensuring that T&T markets are open to visitors and investors will become vital. In particular, it is important that the historical trend of ever greater international openness in T&T continues. Reduced visa requirements fuel international tourism and additional air service agreements open up markets to more airlines, routes, competition and, ultimately, better service (see Figure 7). Given the recent decline in international route capacity and travel demand, prioritizing visa and air service agreement liberalization will be important – with those economies most dependent on tourism exports and lacking large domestic markets standing to benefit the most. Financial openness and an increase in regional trade agreements can also help to facilitate necessary cross-border investment in T&T and beyond, which may also help encourage more international and intra-regional travel.

TTDI results indicate that Western, Southern and Northern Europe are usually the most internationally open subregions due to the close integration that the European Union, the Schengen Area and similar blocs and agreements provide. Such systems allow T&T operators to benefit from factors such as a larger and more diverse consumer base and common market rules. It is also important to recognize that despite the pandemic and disrupted global trade, 83 economies ranked in the index increased their number of regional trade agreements in force between 2019 and 2021. Relevant recent developments include the African Continental Free Trade Area (AfCFTA), which came into force in 2021. Combined with related efforts such as the Free Movement Protocol and Single African Air Transport Market (SAATM), the sub-Saharan Africa region has the potential to unlock its untapped T&T potential and grow its underdeveloped intra- regional T&T market and air route capacity. 39

Figure 7: Correlation between air service agreement liberalization and air transport infrastructure, 2019

Endnotes 40 , 41

Of course, the pandemic, along with the recent rise in geopolitical tensions, also highlights just how important health and security conditions are to protecting the openness on which T&T relies and to restoring consumer confidence in travel. Economies with sophisticated healthcare systems are better equipped to mitigate the impact of pandemics on T&T and the wider economy by protecting their populations, including the T&T workforce and visitors, thus reducing the need for travel and lockdown restrictions. Meanwhile, access to clean water and sanitation facilities helps prevent diseases or their spread. Lastly, consumers and business travellers are likely to remain more sensitive to the health and hygiene conditions at destinations for some time. A recent survey shows that the majority of travellers consider safety protocols, restrictions and cleanliness to be key factors in travel decision- making. 42 In the short term, T&T business, destinations and international organizations have responded to these issues via actions such as the introduction of various protocols and certifications. For instance, the World Travel & Tourism Council has introduced the Safe Travels protocols and certification stamp that can be used by T&T to show customers they are following standardized global health and hygiene practices. 43

In general, underdeveloped health and hygiene infrastructure and access represents an acute challenge for many developing countries, with low- and lower-middle-income economies scoring 50.0% and 25.6% below average in the Health and Hygiene pillar. These states lack physicians and hospital beds (in terms of ratio to population size) and access to basic sanitation and drinking water, and such issues, combined with lower vaccination rates, mean that these economies will struggle to recover at the same pace as others and will have difficulty building adequate resilience against future health security risks. It is therefore crucial for the success of the global T&T sector that the challenges related to vaccine distribution and roll-out are addressed in an equitable and inclusive fashion. While further effort is required, public-private cooperation can provide a useful avenue to address this challenge. For example, the World Economic Forum’s Supply Chain & Transport Industry Action Group community, which consists of leading supply-chain companies, is supporting UNICEF and the COVAX Vaccine Distribution programme with “planning, preparedness and prioritized transportation and distribution of COVID-19 vaccines and related supplies”. 44

The above-mentioned introduction of travel bans, flight-route adjustments, increasing fuel and food prices and potentially hindered international travel demand caused by the war in Ukraine have also shown the degree to which international T&T can be affected by geopolitical tension and conflict. Overall, it is well established that crime and security issues such as terrorism and conflict have a negative impact on tourist arrivals and sector revenue. 45 The 2021 TTDI data shows that economies in the Americas, sub-Saharan Africa and South Asia tend to score the lowest for safety and security, thereby creating a further obstacle to the future development of T&T in these areas.

On the other hand, research has also shown that a sustainable and open tourism sector can be resilient to violence and conflict and that it may help foster positive peace, namely the “attitudes, institutions and structures that create and sustain peaceful societies”. More specifically, the mechanisms through which tourism can accomplish this include cultural and information exchange, encouragement of tolerance, better government functioning, human capital development, and local and cross-border economic gain that can reduce the risks to peace. 46 It is now more important than ever to leverage the T&T sector’s potential for peace through sustainable development.

"It is crucial for the success of the global T&T sector that the challenges related to vaccine distribution and roll- out are addressed in an equitable and inclusive fashion. While further effort is required, public- private cooperation can provide a useful avenue to address this challenge."

Building favourable and inclusive labour, business and socioeconomic conditions

Over the course of the pandemic, the T&T sector has received substantial support in the form of debt financing, tax policies, assistance with business costs, public-sector investment, employment support, incentivization of tourism demand and easing of regulations. 47 In the future, continued investment in human capital and the creation of more favourable labour, business and socioeconomic conditions will be vital components in making the sector more inclusive, addressing ongoing challenges such as labour shortages and driving T&T growth and resilience.

Factors such as accessible and quality education and staff training, supportive hiring and firing practices, programmes to source skilled labour, flexible working arrangements and efforts to improve labour productivity can help equip T&T companies with a workforce that can improve operating efficiency, provide quality services, maintain flexibility in the face of evolving business needs and challenges and take advantage of the growing role of ICT tools. For example, according to the World Economic Forum’s The Future of Jobs Report 2020 , skills gaps in the local labour market were the number one barrier to adoption of new technologies in the transport and storage, and consumer sectors, the two sectors most closely tied to T&T. 48 Furthermore, according to the WTTC, factors such as facilitation of labour mobility, upskilling and reskilling and promotion of education are vital elements in addressing the current labour shortage. 49 Meanwhile, the past few years have shown how important policy stability, access to credit and creating more business- friendly regulatory and tax environments have been in supporting the T&T sector, especially SMEs that typically do not have the same resources and access to capital as larger firms. 50

The 2021 TTDI results partially reflect some efforts by policy-makers to support their economies, with the average Business Environment score climbing 1.7% since 2019. In particular, perceptions of the burden of government regulations and SME access to finance were areas that saw some of the largest improvements. The average Human Resource and Labour Market pillar also improved by 1.5% between 2019 and 2021, due to overall progress made in areas such as staff training. Nonetheless, less developed economies still score well below the TTDI average for most indicators for both pillars.

The pandemic has also highlighted how important an economy’s socioeconomic resilience is for the T&T sector. In general, the ability of an economy to support its population through social protections such as unemployment and maternity benefits, keep youth employed or in training, effectively uphold workers’ rights and support a diverse and inclusive workforce may potentially help strengthen employee productivity, expand the labour pool and make it more resilient to risks such as pandemics. 51 This is particularly true for the T&T sector because it provides income for a large number of youth, women, informal workers, the self-employed and small enterprises, who do not always have access to social or worker protections. Figure 8 shows that there is a relationship between socioeconomic resilience and conditions and labour productivity in T&T. Recent survey data also reinforces how important issues such as benefits and working conditions are for attracting talent and addressing the ongoing labour shortage in the sector. One poll of former US hospitality workers showed that more than half won’t return to their old jobs and over a third are not planning on returning to the industry as they seek higher pay, better working conditions and benefits, and more flexibility. 52

Figure 8: Correlation between socioeconomic resilience and conditions and tourism labour productivity

The 2021 TTDI results show that, across the board, socioeconomic resilience has tended to improve due to the expansion of social protection coverage and spending in line with global efforts to mitigate the impact of COVID-19. High-income economies do tend to score far higher on the Socioeconomic Resilience and Conditions pillar, putting them in a better position to deal with future challenges and maximize their workforce potential. Conversely, low- and lower-middle-income countries have far lower socioeconomic resilience due to more limited social protection, higher rates of youth not in education, employment or training (NEET), fewer workers rights and greater inequality of opportunity for all. As a result, the T&T sector in these economies may face more obstacles to recovery and may be more vulnerable to future risks.

While rising interest rates and debt levels represent a growing obstacle, government responses to the pandemic demonstrated their capacity to provide more comprehensive socioeconomic support, and the benefits of doing so, albeit during an unprecedented situation. While the pandemic has certainly disproportionately affected SMEs, entrepreneurs or more vulnerable populations, strengthening such mechanisms, especially in the T&T sector, could have compound benefits for the sector and economies as a whole.

The growing role of environmental sustainability

In the coming years, the success of T&T businesses and destinations will be increasingly tied to their ability to manage and operate under ever greater ecological and environmental threats. According to surveys conducted for the World Economic Forum’s Global Risks Report 2022 , environmental risks represent half of the top 10 global risks, with climate action failure, extreme weather and biodiversity role natural assets play in generating T&T demand and spend, these environmental risks represent a serious threat to long-term growth for the sector. Moreover, within this context, travellers increasingly value environmentally sustainable options. 54 df

The 2021 TTDI results indicate the extent of environmental sustainability threats and challenges. For instance, comparing the Natural Resources and Environmental Sustainability pillar scores helps to pinpoint where some of the greatest risks to nature-based tourism might lie. Out of the 30 economies that rank in the top quartile for natural resources, 17 score below the global average for environmental sustainability and eight rank in the bottom 25.

Figure 9 provides a regional view of the challenge. While most economies in the Americas and Asia- Pacific and almost half of those in sub-Saharan Africa score above average for natural resources, they commonly underperform in environmental sustainability, making it a critical problem for future T&T development. Environmental issues differ in these regions, but some examples include elevated climate-related risk (as measured by the Global Climate Risk Index), air and sea pollution, deforestation, poor wastewater treatment and inadequate preservation policies. In the Middle East and North Africa, common problems include water stress and air pollution. On the other hand, economies in the Europe and Eurasia region are world leaders in environmental sustainability, accounting for more than half of countries in the TTDI that score above average for this pillar. Combined with the fact that natural resources are not its greatest strength or dependency, the region and its tourism sector may be the better positioned to deal with future ecological risks.

Figure 9: Share of regional economies scoring above average for natural resources and environmental sustainability

Nonetheless, while there are some economies that have better environmental conditions, the challenge is widespread and is not easing. The difference in average score between the top and bottom quartiles for the Environmental Sustainability pillar is the second-lowest among the pillars. Moreover, performance for many indicators in this pillar has been mixed. For example, scores for deforestation continued to worsen. On the other hand, efforts to preserve the environment and T&T-generating natural assets got a boost from continued expansion in the share of protected territories and the number of environmental treaties signed.

A recent UNWTO and One Planet report reiterated the importance of a healthy environment for T&T competitiveness and development and recommended several actions to help the T&T sector produce a greener recovery. This included biodiversity protection actions such as putting tourism at the forefront of conservation efforts and ensuring that the value tourism provides for conservation efforts via monitoring mechanisms and investing in nature-based solutions is captured. Climate action efforts in T&T can be accelerated through the likes of monitoring and reporting emissions from tourism operations, accelerating decarbonization through the development of low-carbon transport options and greener infrastructure, and engaging in carbon removal via the restoration of carbon-density ecosystems and carbon-removal technologies. Finally, circular economy actions are recommended.

These include investing in transforming tourism value chains by reducing, reusing, repairing, refurbishing, remanufacturing, recycling and repurposing whenever possible; prioritizing sustainable food approaches such as local and organic procurement; creating sustainable menus and focusing on reducing food loss; and shifting towards a circularity of plastic in tourism. 55

At the World Economic Forum, efforts in this field are plentiful, and cover multistakeholder actions on decarbonizing transportation, accelerating action on plastics, ensuring the long-term, sustainable use of the ocean, and developing the circular economy. In particular, the Clean Skies for Tomorrow Coalition 56 is working with stakeholders in the aviation ecosystem, including buyers of corporate travel, to accelerate the production and use of sustainable aviation fuels, all while better distributing the green premium for these fuels. The Forum also hosts the Global Future Council on Sustainable Tourism, 57 a community of experts from academia, business, civil society and governments who are developing a set of principles for sustainable destinations to guide decision-making on rebuilding the sector in the wake of the pandemic. The Council is also researching customer behaviour changes that can incentivize the development and delivery of more sustainable travel products and services, articulating the value of investment in the blue and green economies in tourism, and providing guidance on the ambition of achieving net-zero emissions across the various verticals in the T&T sector.

Managing tourism demand and impact

Sustainable management of tourism demand that maximizes benefits for local communities, while also mitigating negative side effects such as overcrowding, will also become a vital component of T&T development as the sector recovers.

The TTCR 2019 discussed how long-term T&T growth was starting to put pressure on local infrastructure and housing, as well as degrading cultural and natural assets that attract visitors and fuelling uneven distribution of T&T benefits. This ultimately led to falling liveability standards for residents, local backlash against tourism and diminished visitor experience. 58 Although recent lockdowns and travel restrictions led to this sustainability challenge being discussed less, it is likely to become a more common topic as demand continues to recover. In many areas, the pandemic-fuelled travel demand push towards outdoor attractions, rural communities and secondary destinations has already revealed capacity constraints. For instance, the rise in nature travel had already led to more overcrowding at many national parks, with many US national parks monthly visitation number hitting all-time highs, leading to issue such as littering, wildlife disruption and traffic jams. 59 Visitors also show signs of wanting to reduce their footprint and improve the social impact on the destinations they visit, with just over half of global travellers in a recent survey indicating that they would be willing to switch their original destination for a lesser-known one if it led to a reduced footprint and greater community impact. 60

While issues such as overcrowding and other effects of T&T on communities are typically a local rather than national-level concern, the TTDI looks at the existence of, or risk related to, overcrowding and demand volatility, as well as the quality and impact of T&T via the T&T Demand Pressure and Impact pillar. In general, pillar results indicate that T&T Demand Pressure and Impact challenges affect economies of all levels of development. For instance, the difference in the average pillar score between low- and lower-middle-income and high-income economies covered by the index is just 0.8% and 2.5%, respectively.

High-income European countries tend to be some of the top TTDI performers and include rich cultural and non-leisure assets and quality transport and tourism infrastructure that allow for the absorption of large quantities of visitors. However, they still tend to score below average for the T&T Demand Pressure and Impact pillar due to factors such as shorter lengths of stay, higher seasonality and a very high level of concentration of interest in a small number of attractions, as shown by Tripadvisor page views and backed by at times unfavourable perceptions of the dispersions of tourism. Unsurprisingly, this region has often claimed headlines for tourism overcrowding. On the other hand, less-developed economies and those ranking lower on the TTDI tend to bring in fewer tourists, but still score below average for perception of tourism dispersion and town- and city-centre accessibility and crowding, an issue that may be partially explained by these economies’ typically below-average scores for transport infrastructure.

Figure 10: T&T Demand Pressure and Impact pillar component scores, 1–7 (best)

In summary, the relatively close distribution of T&T Demand Pressure and Impact pillar scores among economies of different incomes and tourist arrival levels highlights the fact that challenges such as overcrowding have less to do with visitor numbers and more to do with local conditions and policies.

Yet, as the sector rebuilds, there is an opportunity to use increasing domestic and nature-based T&T demand, consumers’ rising preference to manage their footprint and the need to address historical issues such as overcrowding by making investments and policies that help disperse T&T, thus making the sector more resilient. For one, proper care must be paid to developing transport, tourism, health and ICT infrastructure in rural, nature and secondary destinations. This can help funnel tourism and its benefits to more communities, make them more attractive destinations and increase their capacity to absorb more visitors. Within urban centres, improved road and public transport infrastructure and access to efficient, accessible, safe and affordable transport options can reduce the chances of overcrowding and lead to both greater liveability for residents and a better visitor experience (see Figure 11).

Figure 11: Correlation between public transport and quality of town and city centres

In general, TTDI 2021 results show an improvement in the Ground and Port Infrastructure pillar (+2.2%) since 2019. In particular, middle-income economies have experienced some of the strongest growth in areas such as perceptions of road quality and efficiency of train services. Nevertheless, as already alluded to, less-developed economies still have gaps in their infrastructure, ranging from lower road and rail density to a lack of access to efficient and quality public transport. Combined with lower marks for factors such as tourist and health infrastructure, these economies will face some of the greatest challenges in distributing tourism and its benefits throughout their communities. However, they also have the most to gain from overcoming these obstacles.

Aside from investment in infrastructure, policies are also a fundamental part of proper tourism demand management and dispersion. The above subsections of the key findings section explored how governments and destinations can institute policies to develop domestic and other forms of tourism. Moreover, there are specific efforts that can be made to manage T&T to prevent overcrowding and efficiently use a destination’s carrying capacity. For instance, the UNWTO has set out strategies and measures that can combat challenges such as these in cities. Some of these include the promotion of attractions and events that disperse visitors so they are not concentrated only in certain areas, time-based dynamic pricing, the creation of pedestrian-only zones, defining the carrying capacity of city areas, focusing on lower-impact visitor segments, ensuring local communities benefit from tourism, engaging with local stakeholders and monitoring the impact of tourism, including through the use of big data. 61

T&T stakeholders can also play a more active role in broader sustainable mobility efforts and trends that can help to reduce the sector’s environmental impact, manage demand and make destinations more attractive for visitors and residents. For example, the World Economic Forum’s Global New Mobility Coalition (GNMC) is a multistakeholder community for “accelerating the shift to a Shared, Electric and Autonomous Mobility (SEAM) system”. The synchronization of high-occupancy, electric and autonomous transport options can lead to better traffic flow, higher efficiency of road usage, more equitable mobility systems, better air quality, lower carbon emissions and improved grid resilience. More specifically, SEAM may reduce carbon emissions by 95%, improve mobility efficiency by 70% and decrease commuting costs by 40%. Given SEAM’s clear potential to create more sustainable destinations, a case can be made for T&T sector involvement this area. 62

The crucial role of digital technology

All of the aforementioned efforts to build back a better T&T sector will depend on effective leveraging of the growing role of digitalization in T&T.

More T&T services are being accessed by digital systems through online travel agencies (OTAs) and sharing economy platforms, direct online bookings, digital payment systems and mobile devices, and thus consumers tend to expect the greater convenience, increased options, reduced person- to-person contact and seamless experience that these systems provide. Furthermore, digitalization enables T&T businesses to gather consumer insights and preferences, optimize operations, cut transaction costs and automate processes. 63 Online platforms also enable T&T service providers, including SMEs, to reach beyond their local markets and connect with broader domestic and international markets. Due to the above- mentioned factors, it is not surprising that a positive relationship has been found between ICT readiness and international tourism receipts. 64 In the context of shifting demand dynamics, destinations with greater ICT readiness will be better positioned to diversify their markets and take advantage of trends such as the rising numbers of digital nomads and growth in nature-related travel. For instance, research shows a clear relationship between the ICT Readiness pillar and natural tourism online searches in economies with rich natural resources. 65

A recent report by the Asia Development Bank (ADB) and UNWTO outlines how the T&T sector can use big data and digitalization for better and more sustainable tourism management and recovery. Tourism-specific data coming from sources such as T&T operators and online platforms, and non-tourism-specific data coming from sources such as credit card transactions, mobility services and sensors can help T&T stakeholders track and manage the social, economic and environmental impacts of T&T, complement more traditional data-collection efforts, manage tourism flows and target preferred source markets, thereby helping to create smart destinations.

For instance, the Macao Government Tourism Office has worked with a major Chinese multinational technology company to “optimize visitors’ travel experiences before, during and after trips; obtain insights into travellers’ behaviour through in-depth analysis of big data; and monitor, divert and disperse visitor flows at tourist districts and congested areas”. The use of big data and various digital platforms and technology can also help seamless travel and act as health and security tools by enabling safety protocols, biosecurity technologies and digital health certificates, thereby boosting traveller confidence. However, the report also highlights the various barriers to greater use of big data and digitalization within the T&T sector. Some of these challenges include privacy concerns, data reliability, governance issues, disincentives for public-private collaboration, the digital divide, skills gaps and greater efforts to include SMEs. 66

Figure 12: ICT Readiness by economic income group, 2019–2021

Figure 12 helps to illustrate the digital divide among economic income groups. Developing economies typically lag when it comes to ICT infrastructure, internet connectivity and mobile network coverage, which hampers the use of digital platforms in financial services, transport and tourism activities. On the other hand, the ICT Readiness pillar is the most improved (+3.0%) since 2019 largely due to continued improvement in low- and middle-income economies. These results indicate that while high-income economies are best positioned to leverage digitalization and create smart destinations, developing economies are building capacity. In addition, as already mentioned, creating a more highly skilled labour force will be an essential element and challenge in maximizing the use of ICT tools in T&T.

The growing role of digitalization and, in particular, digital platforms, within the T&T space can also create other labour and socioeconomic challenges. Globally, the number of active digital labour platforms, which include ride-hailing taxi and delivery services, has grown from fewer than 200 in 2010 to at least 777 at the start of 2021. As stated, these platforms create new avenues for flexible employment for people, allow business to access wider markets and talent pools, improve productivity and provide convenience for customers. However, they could also lead to greater income and job insecurity. Commonly raised issues include less favourable working conditions, deficient social protection and employment benefits and a lack of access to fundamental rights of freedom of association and collective bargaining. 67 The growth in popularity of digital platforms offering short-term rentals has also led to concerns about residents’ access to housing at destinations where housing capacity is increasingly taken up by the T&T sector. 68 The concentration of market share in the hands of digital platforms may also lead to imbalances in the bargaining and pricing power of the various stakeholders, including workers and SMEs. 69

If proper efforts are made, from employee training and supporting SMEs’ use of ICT to fair and effective regulation of digital platforms and their impact on workers and destination communities, digitalization in T&T will become one of the driving forces in growing the sector’s role in inclusive, sustainable and resilient development. However, failing in these areas could also transform this key aspect of T&T operations into an increasingly acute barrier to future T&T growth.

4.4 Conclusion to the key findings

The COVID-19 pandemic and its impact have underscored the T&T sector’s vital role in global connectivity and development. In the coming years it will therefore be crucial for T&T stakeholders to devise strategies that make the sector more inclusive, sustainable and resilient.

As the TTDI 2021 results reveal, any such enterprise will require a comprehensive and holistic approach. Creating a better T&T economy is not just about improving infrastructure or offering favourable pricing. It also involves creating better health and hygiene conditions, ensuring natural resources are protected and that the workforce on which the sector depends has access to training and social protection. This necessitates the active participation and coordination of sector and non-sector business, employers and employees, government agencies ranging from tourism and health ministries to local authorities, environmental and conservation groups, and international organizations. Over the course of the pandemic, often uncoordinated travel restrictions and health protocols revealed the difficulty and necessity of such cooperation.

In the future, efforts will need to be made to devise common frameworks for defining and measuring T&T sustainability, including the creation of commonly accepted environment, social and governance metrics. The safe and ethical use of big data will prove fundamental to this cause. Moreover, in an increasingly complex and technology-enabled environment, it will be vital to ensure that developing economies, workers and SMEs are not left behind.

While these challenges may be difficult, the flexibility and adaptation the T&T sector has shown in the past few years also indicates that sector stakeholders are more than capable of rising to the occasion.

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MONTHLY INSIGHTS March 04, 2024

U.S. Travel has temporarily paused our monthly data newsletter, however, the latest travel data is still available via the U.S. Travel Insights Dashboard . This dashboard is updated each month (member login required).

The U.S. Travel Insights Dashboard , developed in collaboration with Tourism Economics, is supported by more than 20 data sources. The dashboard is the most comprehensive and centralized source for high-frequency intelligence on the U.S. travel industry, tracking industry performance, travel volumes and predictive indicators of recovery including air and lodging forecasts, DMO website traffic, convention and group trends, travel spending and losses, traveler sentiment, among others to measure the health of the industry.

Key Highlights January 2024:

• Travel appetite started the year on a softer note, but overall growth continued. Air passenger growth remained positive, up 6% versus the prior year but lower than the double-digit growth seen through 2023. Foreign visits remained strong, up 24% YoY.
• Hotel room demand continued a trend of slight contraction falling 1% versus the prior year, while short-term rental demand grew 1%, a lower rate than 2023.
• A particular bright spot was that group room demand within the top 25 markets displayed solid growth of 9% relative to the prior year.
• The outlook for the economy remains fairly optimistic due to the strength of the labor market, looser financial conditions and healthy household and nonfinancial corporate balance sheets. This has filtered through to slightly higher consumer sentiment in February.
• Sentiment is also growing for upcoming leisure travel in 2024. The share of travelers reporting having travel plans within the next six months increased to 93% in January from 92% in December, according to Longwoods International’s monthly survey.
• Travel price inflation (TPI) fell slightly in January as a result of falling transportation prices. Sticky services inflation should see relief from decelerating wage growth. However, upside risks stem from rising healthcare costs, supply chain disruptions and slowing labor supply. Source: U.S. Travel Association and Tourism Economics

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Travel and Tourism

Travel and tourism satellite account for 2017-2021.

The travel and tourism industry—as measured by the real output of goods and services sold directly to visitors—increased 64.4 percent in 2021 after decreasing 50.7 percent in 2020, according to the most recent statistics from BEA’s Travel and Tourism Satellite Account.

Data & Articles

• U.S. Travel and Tourism Satellite Account for 2017–2021 By Sarah Osborne - Survey of Current Business February 2023
• "U.S. Travel and Tourism Satellite Account for 2015–2019" By Sarah Osborne - Survey of Current Business December 2020
• "U.S. Travel and Tourism Satellite Account for 2015-2017" By Sarah Osborne and Seth Markowitz - Survey of Current Business June 2018
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What is Travel and Tourism?

Measures how much tourists spend and the prices they pay for lodging, airfare, souvenirs, and other travel-related items. These statistics also provide a snapshot of employment in the travel and tourism industries.

What’s a Satellite Account?

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The future of tourism: Bridging the labor gap, enhancing customer experience

As travel resumes and builds momentum, it’s becoming clear that tourism is resilient—there is an enduring desire to travel. Against all odds, international tourism rebounded in 2022: visitor numbers to Europe and the Middle East climbed to around 80 percent of 2019 levels, and the Americas recovered about 65 percent of prepandemic visitors 1 “Tourism set to return to pre-pandemic levels in some regions in 2023,” United Nations World Tourism Organization (UNWTO), January 17, 2023. —a number made more significant because it was reached without travelers from China, which had the world’s largest outbound travel market before the pandemic. 2 “ Outlook for China tourism 2023: Light at the end of the tunnel ,” McKinsey, May 9, 2023.

Recovery and growth are likely to continue. According to estimates from the World Tourism Organization (UNWTO) for 2023, international tourist arrivals could reach 80 to 95 percent of prepandemic levels depending on the extent of the economic slowdown, travel recovery in Asia–Pacific, and geopolitical tensions, among other factors. 3 “Tourism set to return to pre-pandemic levels in some regions in 2023,” United Nations World Tourism Organization (UNWTO), January 17, 2023. Similarly, the World Travel & Tourism Council (WTTC) forecasts that by the end of 2023, nearly half of the 185 countries in which the organization conducts research will have either recovered to prepandemic levels or be within 95 percent of full recovery. 4 “Global travel and tourism catapults into 2023 says WTTC,” World Travel & Tourism Council (WTTC), April 26, 2023.

Longer-term forecasts also point to optimism for the decade ahead. Travel and tourism GDP is predicted to grow, on average, at 5.8 percent a year between 2022 and 2032, outpacing the growth of the overall economy at an expected 2.7 percent a year. 5 Travel & Tourism economic impact 2022 , WTTC, August 2022.

So, is it all systems go for travel and tourism? Not really. The industry continues to face a prolonged and widespread labor shortage. After losing 62 million travel and tourism jobs in 2020, labor supply and demand remain out of balance. 6 “WTTC research reveals Travel & Tourism’s slow recovery is hitting jobs and growth worldwide,” World Travel & Tourism Council, October 6, 2021. Today, in the European Union, 11 percent of tourism jobs are likely to go unfilled; in the United States, that figure is 7 percent. 7 Travel & Tourism economic impact 2022 : Staff shortages, WTTC, August 2022.

There has been an exodus of tourism staff, particularly from customer-facing roles, to other sectors, and there is no sign that the industry will be able to bring all these people back. 8 Travel & Tourism economic impact 2022 : Staff shortages, WTTC, August 2022. Hotels, restaurants, cruises, airports, and airlines face staff shortages that can translate into operational, reputational, and financial difficulties. If unaddressed, these shortages may constrain the industry’s growth trajectory.

The current labor shortage may have its roots in factors related to the nature of work in the industry. Chronic workplace challenges, coupled with the effects of COVID-19, have culminated in an industry struggling to rebuild its workforce. Generally, tourism-related jobs are largely informal, partly due to high seasonality and weak regulation. And conditions such as excessively long working hours, low wages, a high turnover rate, and a lack of social protection tend to be most pronounced in an informal economy. Additionally, shift work, night work, and temporary or part-time employment are common in tourism.

The industry may need to revisit some fundamentals to build a far more sustainable future: either make the industry more attractive to talent (and put conditions in place to retain staff for longer periods) or improve products, services, and processes so that they complement existing staffing needs or solve existing pain points.

One solution could be to build a workforce with the mix of digital and interpersonal skills needed to keep up with travelers’ fast-changing requirements. The industry could make the most of available technology to provide customers with a digitally enhanced experience, resolve staff shortages, and improve working conditions.

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Complementing concierges with chatbots.

The pace of technological change has redefined customer expectations. Technology-driven services are often at customers’ fingertips, with no queues or waiting times. By contrast, the airport and airline disruption widely reported in the press over the summer of 2022 points to customers not receiving this same level of digital innovation when traveling.

Imagine the following travel experience: it’s 2035 and you start your long-awaited honeymoon to a tropical island. A virtual tour operator and a destination travel specialist booked your trip for you; you connected via videoconference to make your plans. Your itinerary was chosen with the support of generative AI , which analyzed your preferences, recommended personalized travel packages, and made real-time adjustments based on your feedback.

Before leaving home, you check in online and QR code your luggage. You travel to the airport by self-driving cab. After dropping off your luggage at the self-service counter, you pass through security and the biometric check. You access the premier lounge with the QR code on the airline’s loyalty card and help yourself to a glass of wine and a sandwich. After your flight, a prebooked, self-driving cab takes you to the resort. No need to check in—that was completed online ahead of time (including picking your room and making sure that the hotel’s virtual concierge arranged for red roses and a bottle of champagne to be delivered).

While your luggage is brought to the room by a baggage robot, your personal digital concierge presents the honeymoon itinerary with all the requested bookings. For the romantic dinner on the first night, you order your food via the restaurant app on the table and settle the bill likewise. So far, you’ve had very little human interaction. But at dinner, the sommelier chats with you in person about the wine. The next day, your sightseeing is made easier by the hotel app and digital guide—and you don’t get lost! With the aid of holographic technology, the virtual tour guide brings historical figures to life and takes your sightseeing experience to a whole new level. Then, as arranged, a local citizen meets you and takes you to their home to enjoy a local family dinner. The trip is seamless, there are no holdups or snags.

This scenario features less human interaction than a traditional trip—but it flows smoothly due to the underlying technology. The human interactions that do take place are authentic, meaningful, and add a special touch to the experience. This may be a far-fetched example, but the essence of the scenario is clear: use technology to ease typical travel pain points such as queues, misunderstandings, or misinformation, and elevate the quality of human interaction.

Travel with less human interaction may be considered a disruptive idea, as many travelers rely on and enjoy the human connection, the “service with a smile.” This will always be the case, but perhaps the time is right to think about bringing a digital experience into the mix. The industry may not need to depend exclusively on human beings to serve its customers. Perhaps the future of travel is physical, but digitally enhanced (and with a smile!).

Digital solutions are on the rise and can help bridge the labor gap

Digital innovation is improving customer experience across multiple industries. Car-sharing apps have overcome service-counter waiting times and endless paperwork that travelers traditionally had to cope with when renting a car. The same applies to time-consuming hotel check-in, check-out, and payment processes that can annoy weary customers. These pain points can be removed. For instance, in China, the Huazhu Hotels Group installed self-check-in kiosks that enable guests to check in or out in under 30 seconds. 9 “Huazhu Group targets lifestyle market opportunities,” ChinaTravelNews, May 27, 2021.

Technology meets hospitality

In 2019, Alibaba opened its FlyZoo Hotel in Huangzhou, described as a “290-room ultra-modern boutique, where technology meets hospitality.” 1 “Chinese e-commerce giant Alibaba has a hotel run almost entirely by robots that can serve food and fetch toiletries—take a look inside,” Business Insider, October 21, 2019; “FlyZoo Hotel: The hotel of the future or just more technology hype?,” Hotel Technology News, March 2019. The hotel was the first of its kind that instead of relying on traditional check-in and key card processes, allowed guests to manage reservations and make payments entirely from a mobile app, to check-in using self-service kiosks, and enter their rooms using facial-recognition technology.

The hotel is run almost entirely by robots that serve food and fetch toiletries and other sundries as needed. Each guest room has a voice-activated smart assistant to help guests with a variety of tasks, from adjusting the temperature, lights, curtains, and the TV to playing music and answering simple questions about the hotel and surroundings.

The hotel was developed by the company’s online travel platform, Fliggy, in tandem with Alibaba’s AI Labs and Alibaba Cloud technology with the goal of “leveraging cutting-edge tech to help transform the hospitality industry, one that keeps the sector current with the digital era we’re living in,” according to the company.

Adoption of some digitally enhanced services was accelerated during the pandemic in the quest for safer, contactless solutions. During the Winter Olympics in Beijing, a restaurant designed to keep physical contact to a minimum used a track system on the ceiling to deliver meals directly from the kitchen to the table. 10 “This Beijing Winter Games restaurant uses ceiling-based tracks,” Trendhunter, January 26, 2022. Customers around the world have become familiar with restaurants using apps to display menus, take orders, and accept payment, as well as hotels using robots to deliver luggage and room service (see sidebar “Technology meets hospitality”). Similarly, theme parks, cinemas, stadiums, and concert halls are deploying digital solutions such as facial recognition to optimize entrance control. Shanghai Disneyland, for example, offers annual pass holders the option to choose facial recognition to facilitate park entry. 11 “Facial recognition park entry,” Shanghai Disney Resort website.

Automation and digitization can also free up staff from attending to repetitive functions that could be handled more efficiently via an app and instead reserve the human touch for roles where staff can add the most value. For instance, technology can help customer-facing staff to provide a more personalized service. By accessing data analytics, frontline staff can have guests’ details and preferences at their fingertips. A trainee can become an experienced concierge in a short time, with the help of technology.

Apps and in-room tech: Unused market potential

According to Skift Research calculations, total revenue generated by guest apps and in-room technology in 2019 was approximately $293 million, including proprietary apps by hotel brands as well as third-party vendors. 1 “Hotel tech benchmark: Guest-facing technology 2022,” Skift Research, November 2022. The relatively low market penetration rate of this kind of tech points to around $2.4 billion in untapped revenue potential (exhibit).

Even though guest-facing technology is available—the kind that can facilitate contactless interactions and offer travelers convenience and personalized service—the industry is only beginning to explore its potential. A report by Skift Research shows that the hotel industry, in particular, has not tapped into tech’s potential. Only 11 percent of hotels and 25 percent of hotel rooms worldwide are supported by a hotel app or use in-room technology, and only 3 percent of hotels offer keyless entry. 12 “Hotel tech benchmark: Guest-facing technology 2022,” Skift Research, November 2022. Of the five types of technology examined (guest apps and in-room tech; virtual concierge; guest messaging and chatbots; digital check-in and kiosks; and keyless entry), all have relatively low market-penetration rates (see sidebar “Apps and in-room tech: Unused market potential”).

While apps, digitization, and new technology may be the answer to offering better customer experience, there is also the possibility that tourism may face competition from technological advances, particularly virtual experiences. Museums, attractions, and historical sites can be made interactive and, in some cases, more lifelike, through AR/VR technology that can enhance the physical travel experience by reconstructing historical places or events.

Up until now, tourism, arguably, was one of a few sectors that could not easily be replaced by tech. It was not possible to replicate the physical experience of traveling to another place. With the emerging metaverse , this might change. Travelers could potentially enjoy an event or experience from their sofa without any logistical snags, and without the commitment to traveling to another country for any length of time. For example, Google offers virtual tours of the Pyramids of Meroë in Sudan via an immersive online experience available in a range of languages. 13 Mariam Khaled Dabboussi, “Step into the Meroë pyramids with Google,” Google, May 17, 2022. And a crypto banking group, The BCB Group, has created a metaverse city that includes representations of some of the most visited destinations in the world, such as the Great Wall of China and the Statue of Liberty. According to BCB, the total cost of flights, transfers, and entry for all these landmarks would come to $7,600—while a virtual trip would cost just over $2. 14 “What impact can the Metaverse have on the travel industry?,” Middle East Economy, July 29, 2022.

The metaverse holds potential for business travel, too—the meeting, incentives, conferences, and exhibitions (MICE) sector in particular. Participants could take part in activities in the same immersive space while connecting from anywhere, dramatically reducing travel, venue, catering, and other costs. 15 “ Tourism in the metaverse: Can travel go virtual? ,” McKinsey, May 4, 2023.

The allure and convenience of such digital experiences make offering seamless, customer-centric travel and tourism in the real world all the more pressing.

Three innovations to solve hotel staffing shortages

Is the future contactless.

Given the advances in technology, and the many digital innovations and applications that already exist, there is potential for businesses across the travel and tourism spectrum to cope with labor shortages while improving customer experience. Process automation and digitization can also add to process efficiency. Taken together, a combination of outsourcing, remote work, and digital solutions can help to retain existing staff and reduce dependency on roles that employers are struggling to fill (exhibit).

Depending on the customer service approach and direct contact need, we estimate that the travel and tourism industry would be able to cope with a structural labor shortage of around 10 to 15 percent in the long run by operating more flexibly and increasing digital and automated efficiency—while offering the remaining staff an improved total work package.

Outsourcing and remote work could also help resolve the labor shortage

While COVID-19 pushed organizations in a wide variety of sectors to embrace remote work, there are many hospitality roles that rely on direct physical services that cannot be performed remotely, such as laundry, cleaning, maintenance, and facility management. If faced with staff shortages, these roles could be outsourced to third-party professional service providers, and existing staff could be reskilled to take up new positions.

In McKinsey’s experience, the total service cost of this type of work in a typical hotel can make up 10 percent of total operating costs. Most often, these roles are not guest facing. A professional and digital-based solution might become an integrated part of a third-party service for hotels looking to outsource this type of work.

One of the lessons learned in the aftermath of COVID-19 is that many tourism employees moved to similar positions in other sectors because they were disillusioned by working conditions in the industry . Specialist multisector companies have been able to shuffle their staff away from tourism to other sectors that offer steady employment or more regular working hours compared with the long hours and seasonal nature of work in tourism.

The remaining travel and tourism staff may be looking for more flexibility or the option to work from home. This can be an effective solution for retaining employees. For example, a travel agent with specific destination expertise could work from home or be consulted on an needs basis.

In instances where remote work or outsourcing is not viable, there are other solutions that the hospitality industry can explore to improve operational effectiveness as well as employee satisfaction. A more agile staffing model  can better match available labor with peaks and troughs in daily, or even hourly, demand. This could involve combining similar roles or cross-training staff so that they can switch roles. Redesigned roles could potentially improve employee satisfaction by empowering staff to explore new career paths within the hotel’s operations. Combined roles build skills across disciplines—for example, supporting a housekeeper to train and become proficient in other maintenance areas, or a front-desk associate to build managerial skills.

Where management or ownership is shared across properties, roles could be staffed to cover a network of sites, rather than individual hotels. By applying a combination of these approaches, hotels could reduce the number of staff hours needed to keep operations running at the same standard. 16 “ Three innovations to solve hotel staffing shortages ,” McKinsey, April 3, 2023.

Taken together, operational adjustments combined with greater use of technology could provide the tourism industry with a way of overcoming staffing challenges and giving customers the seamless digitally enhanced experiences they expect in other aspects of daily life.

In an industry facing a labor shortage, there are opportunities for tech innovations that can help travel and tourism businesses do more with less, while ensuring that remaining staff are engaged and motivated to stay in the industry. For travelers, this could mean fewer friendly faces, but more meaningful experiences and interactions.

Urs Binggeli is a senior expert in McKinsey’s Zurich office, Zi Chen is a capabilities and insights specialist in the Shanghai office, Steffen Köpke is a capabilities and insights expert in the Düsseldorf office, and Jackey Yu is a partner in the Hong Kong office.

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• Tourism Market
• Hospitality & Tourism

Tourism Market Size, Share, and Growth, Analysis Research Report – Segmented By Type (International Tourism and Domestic/Local Tourism), Purpose (Adventure Tourism, Business Travel, Conference or Seminar Travel, Family and Friend Visits and Others), and Region - Industry Forecast of 2024 to 2029.

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• Description

Tourism Market Size (2024 - 2029):

The Global  Tourism Market  was worth US$ 11.03 trillion in 2023 and is anticipated to reach a valuation of US$ 14.77 trillion by 2029 and it is predicted to register a CAGR of 5% during the forecast period 2024-2029.

Market Overview:

Worldwide tourism has performed well over the five-year period, and economies in emerging markets continue to stimulate expansion.   In addition, countries in Asia and South America have seen a strong expansion in per capita income, which has allowed consumers in these regions to travel abroad in escalating numbers. However, due to the worldwide spread of COVID-19 (coronavirus) in 2020, industry revenue is predicted to decline by 8.9%. The worldwide pandemic is supposed to have a huge effect on all tourism-related industries, as many countries suspend international travel and limit the number of domestic flights.

Tourism is defined as the fact that international visitors who cross borders travel mainly for business, conferences, government affairs, and for leisure, vacations or to visit local people, friends, and family. The main industries that benefit from tourism spending include national and international air transport, accommodation services, food services, beverages, car rental, and travel agencies.

Market Trends:

Government agencies and organizations such as the World Tourism Organization, and UNWTO, promote tourism to attract diverse tourists from around the world. These initiatives are leading to the expansion of the world tourism market. Adventure tourism is a new concept in the tourism market that drives the entire industry. Also, medical tourism is also a new concept that is gaining ground around the world. The significant difference in prices for medical procedures between different countries is driving the trend in the medical tourism sector. Another determining factor for the global tourism market is the surge in international sporting and recreational events.

Market Drivers:

The increase in per capita income stimulates the expansion of the global tourism market, which translates into a continuous expansion of international tourism. For the past five years, the tourism market in emerging economies, particularly countries in South America and Asia, has been the driving force behind the worldwide industry. Compared to ten years ago, the world tourism market has undergone many changes. Emerging economies now represent more market share than developed economies. In recent years, the adventure tourism industry has grown exponentially worldwide. Also, travelers are interested in visiting unknown destinations for fun. Besides, a significant increase in government initiatives in the form of public and private partnerships to promote tourism is driving the expansion of the worldwide adventure travel market. The comfort factor associated with the application and implementation of the e-tourism market has been an important factor for this market. Access to the complete travel package as well as strategic access to know all the relevant information related to the place has helped customers opt for electronic means to make their travel plans.

Market Restraints:

The risk of unpredictable weather conditions limits the expansion of the global tourism market.

Market Opportunities:

The development of new trends like adventure tourism, medical tourism, etc., are likely to promote the expansion in call of the global tourism market. Adventure tourism includes some activities such as rock climbing, hiking, caving, rafting, and others. Tourism is one of the sectors with the highest exponential expansion, among which adventure tourism is one of the fastest growing. According to a study of the travel market, Europe and America are the two main regions of this market. Furthermore, the introduction of artificial intelligence plays a vital role in the operation and exploitation of adventure tourism. The growing trend of social media is also estimated to offer a promising opportunity for this market expansion.

TOURISM MARKET REPORT COVERAGE:

Market Segmentation:

Tourism Market -  By Type:

• International Tourism
• Domestic/Local Tourism

Tourism Market -  By Purpose:

• Adventure Tourism
• Business Travel
• Conference or Seminar Travel
• Family and Friend Visits

Tourism service companies offer various products and services to their clients. Thus, the industry products included in the worldwide tourism industry are accommodation for travelers, travel organizations and reservations, air transport, other local transport such as car rental, food and drink establishments, recreation and entertainment, gasoline, and other activities. In addition, industrial activities considered in the worldwide tourism market include accommodation services for travelers, provision of hospitality services to international tourists, airline operation, motor vehicle leasing, travel agencies, and travel organization services.

Market Regional Analysis:

The  Tourism Market Report includes the segmentation of Regions:

• North America 
• Europe 
• Asia Pacific
• Latin America 
• Middle East & Africa 

Countries like the United States, Germany, and France are popular destinations for world tourism. But in recent years, other lesser-known countries in Asia and Africa have emerged as destinations of interest to international travellers. Therefore, tourism service providers are reorienting their services to take advantage of the economic benefits of this trend. Thailand was the most popular destination for medical tourism in 2019. The expansion of the market was due to Thailand's status as one of the most popular tourist destinations in Asia. The escalating number of private hospitals, improvements in health infrastructure in general, and cheaper treatment costs are responsible for the expansion of medical tourists arriving in Thailand. Thailand has more than 450 private hospitals and that number is likely to grow exponentially.

Medical tourism generates substantial income in developing economies, helping them to further develop their health activities. This has resulted in escalated participation and promotion of medical tourism by government authorities. For example, in Thailand, the government is targeting potential new markets such as China, Laos, Myanmar, Cambodia, and Vietnam to benefit from the growing wealth and growing call for professional healthcare services in these countries. In February 2018, the government announced the prerequisites for the issuance of smart visas for professionals or entrepreneurs interested in investing in new businesses, which will help international medical tourism providers expand their business in Thailand with incentives such as granting a visa period of 4 years.

Impact of COVID-19 on the Tourism Market:

The novel coronavirus, which is one of its types of humanitarian disasters, has affected people and businesses around the world, triggering a worldwide economic crisis. In this sense, the tourism sector is no exception.  COVID-19 has given almost a death blow to the tourism industry around the world. The strict lockdown conditions and shutdown of transport modes have resulted in declining revenue in this industry. However, with the relaxation of lockdown conditions, the business is supposed to resume in 2021.

Market Key Players:

The Tourism Market has a low level of concentration as there are large numbers of international and local players in the tourism market. The market for global tourism is highly fragmented.

• Aban Offshore Ltd.
• Accor Group
• Balkan Holidays Ltd.
• Fred Harvey Company
• G Adventures

Market Recent Developments:

Mumbai-based Gem Tours & Travel has declared a coronavirus vaccination tour package for High Network Individual consumers who wish to travel to the United States for the shooting.

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Frequently Asked Questions

1. What is the Tourism Market growth rate during the projection period? +

The Global Tourism Market is expected to grow with a CAGR of 5% between 2024-2029.

2. What can be the total Tourism Market value? +

The Global Tourism Market size is expected to reach a revised size of US$ 14.77 trillion by 2029.

3. Name any three Tourism Market key players? +

Accor Group, Crown Ltd., and Balkan Holidays Ltd. are the three tourism market key players.

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Tourism Enjoys Strong Start to 2022 while Facing New Uncertainties

• All Regions
• 25 Mar 2022

International tourism continued its recovery in January 2022, with a much better performance compared to the weak start to 2021. However, the Russian invasion of Ukraine adds pressure to existing economic uncertainties, coupled with many Covid-related travel restrictions still in place. Overall confidence could be affected and hamper the recovery of tourism.

Based on the latest available data, global international tourist arrivals more than doubled (+130%) in January 2022 compared to 2021 - the 18 million more visitors recorded worldwide in the first month of this year equals the total increase for the whole of 2021.

While these figures confirm the positive trend already underway last year , the pace of recovery in January was impacted by the emergences of the Omicron variant and the re-introduction of travel restrictions in several destinations. Following the 71% decline of 2021, international arrivals in January 2022 remained 67% below pre-pandemic levels.

Europe and Americas perform strongest

All regions enjoyed a significant rebound in January 2022 , though from low levels recorded at the start of 2021. Europe (+199%) and the Americas (+97%) continued to post the strongest results, with international arrivals still around half pre-pandemic levels (-53% and -52%, respectively).

The Middle East (+89%) and Africa (+51%) also saw growth in January 2022 over 2021, but these regions saw a drop of 63% and 69% respectively compared to 2019. While Asia and the Pacific recorded a 44% year-on-year increase, several destinations remained closed to non-essential travel resulting in the largest decrease in international arrivals over 2019 (-93%).

By subregions , the best results were recorded by Western Europe, registering four times more arrivals in January 2022 than in 2021, but 58% less than in 2019. Additionally, the Caribbean (-38%) and Southern and Mediterranean Europe (-41%) have shown the fastest rates of recovery towards 2019 levels. Indeed, several islands in the Caribbean and Asia and the Pacific, together with some small European and Central American destinations recorded the best results compared to 2019: Seychelles (-27%), Bulgaria and Curaçao (both -20%), El Salvador (-19%), Serbia and Maldives (both -13%), Dominican Republic (-11%), Albania (-7%) and Andorra (-3%). Bosnia and Herzegovina (+2%) even exceeded pre-pandemic levels. Among major destinations Turkey and Mexico saw declines of 16% and 24% respectively as compared to 2019.

Prospects for recovery

After the unprecedented drop of 2020 and 2021, international tourism is expected to continue its gradual recovery in 2022 . As of 24 March, 12 destinations had no COVID-19 related restrictions in place and an increasing number of destinations were easing or lifting travel restrictions, which contributes to unleashing pent-up demand.

The war in Ukraine poses new challenges to the global economic environment and risks hampering the return of confidence in global travel. The US and the Asian source markets, which have started to open up, could be particularly impacted especially regarding travel to Europe, as these markets are historically more risk averse.

The shutdown of Ukrainian and Russian airspace, as well as the ban on Russian carriers by many European countries is affecting intra-European travel. It is also causing detours in long-haul flights between Europe and East Asia, which translates into longer flights and higher costs. Russia and Ukraine accounted for a combined 3% of global spending on international tourism in 2020 and at least US$ 14 billion in global tourism receipts could be lost if the conflict is prolonged. The importance of both markets is significant for neighbouring countries, but also for European sun and sea destinations. The Russian market also gained significant weight during the pandemic for long haul destinations such as Maldives, Seychelles or Sri Lanka. As destinations Russia and Ukraine accounted for 4% of all international arrivals in Europe but only 1% of Europe’s international tourism receipts in 2020.

Economic uncertainty and pressures

Even though it is too early to assess the impact, air travel searches and bookings across various channels showed a slowdown the week after the invasion but started to rebound in early March.

It is certain that the offensive will add further pressure to already challenging economic conditions, undermining consumer confidence and raising investment uncertainty. The Organisation for Economic Co-operation and Development (OECD) estimates global economic growth could be more than 1% lower this year than previously projected, while inflation, already high at the start of the year, could be at least a further 2.5% higher. The recent spike in oil prices (Brent reached its highest levels in 10 years), and rising inflation are making accommodation and transport services more expensive, adding extra pressure on businesses, consumer purchasing power and savings, UNWTO notes.

This forecast is in line with the analysis on the potential consequences of the conflict on global economic recovery and growth by the United Nations Conference on Trade and Development (UNCTAD), which has also downgraded its projection for world economic growth in 2022 from 3.6% to 2.6% and warned that developing countries will be most vulnerable to the slowdown.

Related links:

• Download the news release in PDF
• World Tourism Barometer | Volume 20 • Issue 2 • March 2022 Excerpt
• UNWTO Tourism Data Dashboard
• UNWTO and WHO: Travel Measures Should be Based on Risk Assessment
• “Work Together and Make Tourism a Pillar of Peace”: UNWTO Addresses EU Ministers
• The impact of the Russian offensive on Ukraine on international Tourism

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India Visitor Arrivals Growth

• India Visitor Arrivals grew 7.8 % in Dec 2023, compared with an increase of 16.8 % in the previous month
• India Visitor Arrivals Growth rate data is updated monthly, available from Mar 1988 to Dec 2023
• The data reached an all-time high of 2,691.4 % in Apr 2021 and a record low of -99.6 % in Apr 2020
• In the latest reports, India Visitor Arrivals recorded 1,070,163.0 person in the month of Dec 2023
• Tourism Revenue of India reached 3.0 USD bn in Dec 2023, an increase of 10.8 % change from the previous month

View India's Visitor Arrivals Growth from Mar 1988 to Dec 2023 in the chart:

What was India's Visitor Arrivals Growth in Dec 2023?

India Visitor Arrivals grew 7.8 % in Dec 2023, compared with an increase of 16.8 % in the previous month See the table below for more data.

Visitor Arrivals Growth by Country Comparison

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• Luxury travel and tourism worldwide ›

10 Cities With the Highest Growth Potential for International Visitor Spending

Sponsored post by booking.com.

According to a study of 82 major tourism cities around the world by the World Travel and Tourism Council , Hong Kong is expected to see the greatest increase in tourism spending growth over the ten years preceeding 2032. The top 10 list is heavily dominated by large cities in Asia, featuring only two cities outside of the region, Buenos Aires in Argentina and Jeddah in Saudi Arabia.

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