WTTC forecasts travel growth and nearly $1 trillion in projected travel investment

27-08-23

• Asia-Pacific and Africa forecast a 161% increase in investment by 2022 compared to 2000. Private capital investment is critical to sector's success.

• Travel is on the rise and nearly $1 trillion of investment in the sector is projected.

The World Travel & Tourism Council's (WTTC) Global Trends Report 2023 on the Economic Impact of Travel & Tourism today reveals an encouraging resurgence in Travel & Tourism investment, overcoming pandemic setbacks and signalling a strong return to growth.

From 2010 to 2019, investment grew steadily at a compound annual rate of 4.3%, rising from $754.6 billion in 2010 to $1.1 trillion in 2019, or 4.5% of all economy-wide investment. COVID-19 hit hard, leading to a 24% decline in 2020 and another 8% in 2021.

However, 2022 marked a turning point. 

Spurred by the global phenomenon of pent-up demand, travel and tourism investment increased to $856 billion, up 11.1% from the previous year. While this was 22.5% lower than 2019 levels, it was still 53% higher in 2022 than in 2000.

In regions such as Asia-Pacific and Africa, investment in 2022 was 161% higher than in 2000, while Europe and the Middle East have shown more moderate growth. In these regions, the pandemic has undone much of the significant growth achieved over the past two decades.

However, travel and tourism investment in these regions in 2022 remained above the levels seen in 2000.

THE US LEADS THE TOP TEN MARKETS. The US leads the top ten markets in terms of absolute investment in the sector in 2022 with $213 billion, showing a sector poised to thrive once again. China trails with a $146 billion investment in 2022, and Saudi Arabia completes the top three with a total investment of $42 billion in the same year.

Island destinations lead the top spots in travel and tourism investment as a total percentage of their economies in 2022. The US Virgin Islands lead the way by channelling 35% of total economic investment in travel and tourism, followed closely by Antigua and Barbuda with 34% and Aruba with almost 32%.

Private investment in new aircraft, hotels and car fleets is key to increasing capacity in the sector. Public investment complements this growth, and together, the combined investments create a powerful synergy. 

The ripple effect is more jobs, bigger economies and stronger communities.

Julia Simpson, President and CEO of WTTC, said: "Investment in travel and tourism is not just a numbers game; it is the heartbeat of global connectivity and economic revival. Despite the setbacks of the pandemic, the 2022 growth is a promising sign of things to come."

"Travel & Tourism investment is integral to the world's recovery and growth. The resilience and innovation potential of the sector continues to drive us forward. We remain confident, but vigilant, in our quest for a brighter and more connected global future." .

A look ahead

WTTC forecasts a solid 11.5% growth in investment in 2023, amounting to US$955 billion, with a return to pre-pandemic levels expected by 2025. By 2033, WTTC forecasts promising average annual growth of 6.1% globally, with the strongest annualised growth rates projected to be in Asia-Pacific and the Caribbean.

However, the global rise in interest rates creates challenges for future investment. With central banks raising interest rates to combat rising inflation, the cost of borrowing and products increases.

Higher interest rates could present a risk to future investment in the sector, so it is crucial that the public and private sectors work together to innovate and ensure the continued strengthening of this vital sector.