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RESEARCH THINKTANK


Seeing a future for tourism investment


TOURISMSUBJECT


THE PANDEMIC HAS SHOWN THE PRINCIPLES OF SUSTAINABLE TOURISM ARE NO LONGER NICHE, WRITES MIGUEL ANGEL FIGUEROA


The Covid-19 pandemic has had a sudden and significant impact on public health and the global economy. It also brought international


travel to an abrupt halt. By the second quarter of 2020, 100% of global destinations had introduced restrictions on travel. According to the three scenarios


put forward by the World Tourism Organisation (UNWTO), interna- tional tourist numbers could fall by between 60%, 70% and 80% in 2020 – at the start of the year, growth of 3% to 4%was predicted. This would translate into losses of 850 million to 1.1 billion international tourist arrivals; $910bn to $1200bn in export revenues; and 100 to 120 million direct tourism jobs. And it’s not just people’s livelihoods being threatened. Our efforts to ensure tourism is a driver of the UN sustain- able development goals (SDGs) are at risk of being rolled back. This pandemic has highlighted


that sustainable tourism should no longer be considered a niche part of the sector. Instead, its principles should guide everything the sector does. All stakeholders have a respon- sibility to make sure the future of tourism is more innovative and more sustainable. Experts point to the need to rethink frameworks and to shift from a growth paradigm to a sustainable paradigm. This is an opportunity to develop global part- nerships and global initiatives and to effectively rethink investment frameworks.


The nature of tourism Tourism is a global force for economic growth and development,


84


generating $1700bn annually; this represents about 4% of global gross domestic product and around 29% of service exports. The labour-inten- sive nature of tourism drives employment; it directly accounts for one in 10 jobs in the world and in 2019, the sector supported around 300 million jobs globally. Notably, tourismemploys more


women and young people than almost every other sector. Around 32% of people working in tourism are between 15 and 34 years of age, and in OECD countries, women account for 60% of tourism workers. Furthermore, tourism is the ultimate person-to-person sector and serves growing consumer demand for domestic and international travel. According toUNWTOdata, the


number of international tourist arriv- als reached 1.5 billion in 2019, and is expected to reach 1.8 billion by 2030. This represents around 50 million additional arrivals per year, around a 150% increase on the period between


1995 and 2010. An estimated 88% of these tourists are from Asia.


Digital generation The demographic of this new market horizon (2030-40) will be predominantly millennials and Generation Z; by 2040 they will represent the largest share of the global population at 2.3 and 2.6 billion respectively. As both genera- tions are ‘digital natives’, this will present an important opportunity to develop digital and technologi- cally innovative services. However, it also poses several


challenges in terms of digital infra- structure, value chains and plat- forms, data protection, mobility, and so on. At the same time, as consumer behaviour changes, growing numbers of people consider travel and experiences a priority, and so take four or more trips per year. These trips are gener- ally characterised by their short- ness and their emphasis on authen-


www.fDiIntelligence.com August/September 2020


Illustration by John Holcroft


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