ticity and sustainability. There is evidence that for every

dollar of tourism exports, 89 cents of domestic value added is generated: 56 cents are directly generated while 34 cents come fromindirect impacts. More than 30% of this value comes fromindirect impacts on the local value chain – that is, through links to other sub-sectors such as passen- ger transport (21%), accommodation (19%), food and beverage (16%), and other services (44%) such as travel agencies, entertainment, financial services and digital start-ups. The multi-dimensional nature of

tourism, combined with the dynamic nature of investment capi- tal, presents a complex picture, which makes the understanding and measuring tourism investments challenging. At the same time, new consumer expectations, the advan- tages of technology, and the need for sustainability measures challenge the current business models, and present new opportunities for inves- tors interested in the tourism sector in the new, post-Covid reality.

Tourism investments Investments are a crucial compo- nent for driving recovery and strengthening the tourism ecosys- tem, both in the traditional and non-traditional senses. Beyond the financial instruments to facilitate liquidity and so support the tourism value chain in the short term, there is a need to develop investment vehi- cles to accelerate the diffusion of technology, inclusion and sustaina- bility for the long-termresilience of the sector. A significant level of investment

will be required to support increas- ing traveller volumes, and their changing needs. It is estimated that around $6900bn of infrastructure investment will be needed each year between nowand 2030 if we are to achieve the SDGs. The current spending on infrastructure is

between $3400bn and $4400bn. According to fDi Intelligence,

tourism FDI reached 613 greenfield projects, and more than $57bn in investments in 2018. As such, climate-related requirements regard- ing infrastructure quality are an opportunity for the tourism sector to move the climate and develop- ment agendas forward and develop infrastructure systems that deliver better services while also achieving climate goals and the SDGs. Venture capital (VC) investments

in travel tech have been growing. Around $449bn was invested in travel and mobility tech start-ups between 2014 and 2019. At the same time, travel tech start-ups reached $61.6bn in unicorn valuations. Non-traditional investments in start- ups are not only an opportunity for investors, but also represent an opportunity to develop solutions to decarbonise and decentralise energy systems through electric vehicles and renewable energy solutions, and design innovative newservices and business models including new platforms, and for the further devel- opment of the sharing economy and circular supply models. All of these can help the transition towards a low-emission and resilient future. This data can be used as a proxy

to measure the flows of capital into the sector. Due to its cross-cutting and multi-dimensional nature, investments in the sector can be difficult to measure and track so the UNWTO is developing a series of investment guidelines to under- stand and generate sustainable investments in the tourism ecosys- tem. This aims to provide insights on trends and opportunities, as well as strategies on howto address current challenges and barriers when investing in the tourism sector, including the opportunities for digital start-ups to raise funding fromnon-traditional investments such as VC and corporate ventures.

Policy insights The Covid-19 pandemic has high- lighted the fact that sustainable tourism requires sustainable invest- ments to be at the centre of new solutions, not just traditional investments that promote and underpin economic growth and productivity. It has also illustrated the importance of non-traditional investments that enhance innova- tion through the creation and diffu- sion of new solutions to decarbonise the sector. To harness the advantages of

investments, it is critical that governments promote policies as well as new investment vehicles to recover, retain and attract FDI. Only this way can we re-imagine tourism and enhance the sector’s positive impact on the people and the planet as we accelerate the achieve- ment of SDGs. The urgency to balance the trade-

offs between the environmental, economic and sociocultural chal- lenges of tourism and meet the demand to drive digital technologies might require extra political and financial commitment as well as the data-driven participation of several stakeholders. This is especially true of the private sector, which has the ability to enhance solutions not only in response to the Covid-19 crisis, but also to develop solutions related to offers and destinations. Strategic public-private partner-

ships in investments have a critical role to play in the economic recov- ery from the effects of this pandemic, and in realising the ambitious goals of protecting the planet and ensuring prosperity for all through sustainable investments in tourism as a catalyst and multi- plier sector globally.■

Miguel Angel Figueroa is the investments principal for innovation, investments and digital transformation at the World Tourism Organisation (UNWTO).


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