Tourism is a great contribution to the world economy. Large emerging economies, as well as developed ones, depend largely on the tourism sector.

A sector for which countries like the United States, France and Spain are fighting for leadership in order to position themselves as the world’s leading tourism power. A very profitable objective in those countries that achieve it. Since we are talking about a sector that not only generates capital for the country, as well as cultural wealth, but also represents one of the biggest engines of growth and economic development on the planet.

Globalization, as well as the relations between countries have caused travel to be an increasingly frequent option. In other words, the percentage of the world’s population that requires a traditional visa to travel to foreign destinations decreased from 75% in 1980 to 53% in 2018. This is causing more and more people to move between countries on a recurring basis, increasing leisure travel, according to the World Tourism Organization (UNWTO) report from 50% to 56%. Tourism is a great generator of wealth and employment in those countries that receive more tourists, which has caused the great weight that the sector is gaining in the major economies of the world.

A situation that has led many countries to increase their investment in the tourism industry, as well as to highlight the attractiveness of their main tourist destinations. A situation that has benefited all continents on a global level, as they have all grown in terms of passenger arrivals compared to their predecessors.

In short, tourism is a fundamental pillar for economic growth in the countries that make up the planet, representing a large percentage of the world’s gross domestic product (GDP), as we shall see below. In turn, a sector that, over time, does not lose that dynamism that leads it to grow exponentially year after year.

Tourism data
According to the latest data published by the World Travel and Tourism Council (WTTC), the tourism sector, with a representation of 10.4%, is one of the sectors with the highest contribution to global GDP. With 8.8 billion dollars, the tourism sector is positioned as one of the sectors with the highest growth in the world, being surpassed only by the manufacturing sector. However, it is far ahead of other major sectors such as financial services, health or technology.

In spite of the great crises that have shaken the economy, tourism is, so to speak, a sector that has always been considered a “safe bet”. We are talking about the fact that, while other sectors were showing signs of contraction in the face of the growing uncertainties or shocks that were damaging the economy, tourism has been the only sector that has been growing uninterruptedly year-on-year. A growth that has led to position itself as the sector that grows more than the average recorded by all sectors that make up the world’s economic activity.

In recent years, as I said, we have seen tourism gain a strong weight in the economies. Tourism is becoming one of the most profitable growth engines for the global economy, so the leadership in the sector is disputed by all major countries, which struggle every year to attract more and more tourists to their territories.

According to the UNWTO report “International Tourism Outlook”, tourism generates more than 5 billion dollars a day. In turn, the sum of foreign tourism revenues worldwide, as well as the cost of passenger transportation in the world generated $1.7 trillion last year. Finally, last year, there were 1.4 billion international traveler arrivals worldwide.

Job generator
As can be expected, economic growth is made up of many aggregates which, when disaggregated and put into perspective, reveal a greater attraction for the tourism sector. According to the data provided by the WTTC report, tourism, as of 2018 -not yet published in 2019-, employs 319 million people, expecting this figure to multiply to 421 million employed, according to estimates for 2029. In other words, tourism is not only an engine of economic growth, but also an engine for employment itself, since, behind the manufacturing sector, it is the sector with the best performance in terms of job creation.

In the world, 1 in 5 jobs that have been generated over the last 5 years have been directly related to tourism. This has meant that, in addition, 1 out of every 10 workers in the world is employed in the tourism sector. As I say, it is a generator of employment that, in addition to generating and employing a large number of staff, also does so in an inclusive manner and with great opportunities for both genders; as well as a generator of employment for the youngest. According to data from the report ‘International Perspectives on Women and Work in Hotels, Restaurants and Tourism’ by Cornell University, women, on average, represent 55.5% -on a global scale- of the tourism industry.

According to the International Labour Organization (ILO), tourism is a major generator of employment worldwide, so it is expected that, according to its growth levels, it will continue to generate employment, exponentially, in the coming years. A sector that, in view of the growth obtained and its irruption in the world economic growth, is gaining more and more weight in the economies, in view of the deterioration of other sectors and the slowdown of the global economy. However, it is important to highlight the risk that this may pose when a shock occurs in the sector.

In summary, and to get an idea of the magnitude, tourism in OECD countries, such as Spain, represents about 15% of their GDP; other European countries such as France or Portugal, the weight of tourism in them represents, respectively, 7.3% and 13.7% of GDP. In other Latin American countries, such as Mexico, for example, tourism already accounts for 8.7% of the country’s GDP. Overall, a tourism sector that, as of 2018, accounted for 4.1% of the GDP of OECD countries, as well as 6% of employment in those countries. A contribution that, over time, leaves no country indifferent when considering tourism as one of the fundamental pillars of growth and economic development.

Francisco Coll MoralesEconomist

Leave a Reply