Travel & Tourism is catalyst for global economic development.
Globally, about 2.6 billion people cannot access a reliable electricity source, 2.6 billion lack basic sanitation access almost 800 million people lack access to water. 1.5 billion do not have access to reliable phone services, and over 4 billion are without the internet (UN). To develop, societies require basic physical facilities, economic growth and jobs, research, new technology and skills to reduce equalities.
For this reason, Goal 9 of the UN 17 Global Goals of the 2030 Agenda for Sustainable Development is:
SDG #9 "Build resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation.”
What is infrastructure?
Infrastructure provides the basic physical facilities essential to business and society, enabling basic needs to be met and access to information and learning for improving knowledge and productivity.
Infrastructure can include public services such as water, energy, waste, irrigation, food and communications including telephone and internet. It can also be more tangible, such as transport, roads and bridges, or education establishments, systems and standards.
Often infrastructure maybe aged in need of replacing or updating, to support better efficiency or reliability, to enable business or access to basic needs such as education and healthcare. Pre-empting infrastructure breakdown or resource inefficiency may require early and smart investment, particularly if development lead times are long.
Climate change is also adding extra pressures and creating the need for more resilient infrastructure to cope with changing weather patterns, such as extreme heats, floods and storms. Governments are looking to 'climate-proofing' through early investment for climate resilience, reducing ultimate costs.
What is innovation?
Innovation expands technological capabilities and leads to the development of new skills. Technological progress is key to finding lasting solutions to both economic and environmental challenges, such as providing new jobs and promoting energy efficiency, and can open new markets and opportunities for better growth, leading to more sustainability. Eg. free Skype calls have reduced global business air miles.
What is industry?
Industry is the part of economy concerned with production of goods. Industrial output is a component of the GDP of a nation. It includes mining and extraction sectors, fuels and fertilisers.
Feed and food production is excluded, counted with farming as agricultural output: the systematic raising of plants and animals.
Service provision is also excluded: non-material economic activity equivalent of goods that does not result in physical ownership but which create benefits, such as financial services and digital technologies.
Across the world, industry counts for 30.5% GDP, agriculture 5.9% and services 63.6% (The World Factbook, CIA, 2015). Manufacturing is an important employer, accounting for around 470 million jobs worldwide in 2009 – around 16% of the world’s workforce of 2.9 billion and creating a multiplier-effect on society: Every one job in manufacturing creates 2.2 jobs in other sectors. Small and medium-sized enterprises (SMEs) are the largest job creators, making up over 90% of business worldwide and 50-60% of employment (UN SDGs).
Industrialisation drives economic growth and job creation, reducing income inequality. However, greater investment is needed to build required infrastructure in the Least Developed Countries (LDCs) of the world to ensure growth.
What's all that got to do with Tourism?
Tourism can reach into the extremities of a country other industries cannot.
Tourism is thus dependent on, but also depended upon, infrastructure for development.
It not only relies on good public and privately supplied infrastructure and an innovative environment for its services to be delivered, but can also incentivise governments to upgrade infrastructure as a means of attracting tourism and other sources of foreign investment, in size, scale, efficiency and sustainability.
This can facilitate further sustainable industrialization, necessary for economic growth, development and innovation. Tourism can thus support inequalities and disadvantaged countries in a way other industries cannot.
Significant investment is needed in the Least Developed Countries to boost technological progress and economic growth. Innovation and upgrading infrastructure such as in transport, energy and water can also support other industries to be more sustainable, with increasingly efficient use of resources and environmentally sound technologies and processes.
- SEED Madagascar has created incredible water and sanitation infrastructure for rainwater harvesting and latrines.
- Tiger Mountain Pokhara Lodge tapped into the natural water supply and provided infrastructure for private village access.
- Jicaro Island Ecolodge provide water filtration for Lake Nicaragua water for the 600-strong community.
- Solar energy provision has been built at Lapa Rios, Campi ya Kanzi, Nikoi Island, Chumbe Island and Jicaro Island Ecolodge.
- Schools have been built and upgraded by Lapa Rios in Costa Rica, Jicaro Island Ecolodge in Nicaragua, SEED Madagascar, Maasai Wilderness Conservation Trust through Campi ya Kanzi in Kenya and Tiger Mountain Pokhara Lodge in Nepal.
- In Malawi, RSC focus on increasing business linkages between people from low-income communities and tourism-industry actors for the positive impacts of tourism on poverty. You can undertake global development workshops in social enterprise such paper-making and water sanitation.
The tourism sector includes:
- Transportation: such as cruise ships, yachts, airlines, railways, roads, buses and taxis.
- Hospitality: including accommodation, food & beverage.
- Entertainment and leisure: such as casinos, amusement parks, shopping malls and theatre.
As well as building their tourism services:
- Luca Belpietro, founder of Campi ya Kanzi, built the lodge from scratch in conjunction with the local Maasai, teaching them to be carpenters, masons, and later waiters, cooks, mechanics, guides for the now-Maasai-run community lodge.
- Nikoi’s The Island Foundation has established a retail brand (Kura Kura) to help sell traditional arts and crafts, plus helped establish several local businesses, such as car hire and alang-alang (ylang ylang) supplier for grass roofs, beneficial to the community and tourism operations.
- SEED Madagascar set up Stitch St Luce as a project, now a thriving independent international business, training women in producing and selling high quality embroidered products, language and business skills for sustainable livelihoods. The products take inspiration from the diverse local wildlife and environment, linking consumer demand to local desire for conservation.
- Lapa Rios have constructed and maintain a suspension (walking) bridge to cross the Carbonera River and the road from Puerto Jimenez as well as organise the Osa Peninsula recycling centre & dump.
The impact of tourism on world industry GDP
In 2016, the direct economic contribution of travel and tourism grew by 3.1% and amounted to USD$2.31 trillion. This was faster than the global economy as a whole which grew at 2.5%. Including indirect and induced contributions amounted to roughly 3 times that amount, USD$ 7.61 trillion - or 10.2% of world GDP, outpacing the global economy for the sixth consecutive year and providing 292 million – or 1 in 10 - jobs on the planet and forecast to continue to grow at an average of 3.9% per year until 2027. (WTTC)
In other words, the indirect impact by tourism to non-tourism industry economic contribution amounted to USD$5.30 trillion, including financial and business services, manufacturing, public services, retail and distribution.
A total of around 6 million new jobs were created in 2016 as a result of total direct, indirect and induced tourism activity, meaning almost 1 in 5 of all new jobs created were linked to Travel & Tourism (WTTC). Excluding the nearly 2 million jobs directly generated by the sector, makes 4 million indirect and induced jobs created outide of tourism by tourism related activity.
North America makes the largest GDP contribution through tourism, followed by the European Union and North East Asia. The least developed countries, landlocked developing countries and small island developing States represent less air travel. But some of the fastest-emerging tourism destinations can be found in Africa, including Namibia and Zambia (WTTC); part down to the greater popularity of less-travelled destinations among tourists; part down to the realization of the benefits travel and tourism can provide for a country’s economy.
Looking at the number of international visitors compared to local population can provide an indicator of the impact tourism may have on the destination. For example, in Iceland in 2016, overnight international tourism arrivals outnumbered the resident population by a ratio of 5.1 to 1. The ratio is also high in Croatia (3.3 to 1) and Montenegro (2.6 to 1).
Continued strong growth in tourism hotspots may squeeze infrastructure capacity and lead to environmental and societal pressures if not managed responsibly – as witnessed in many worldwide destinations, such as Venice, Barcelona and US National Parks.
The top ten countries for tourism in GDP terms in 2016 were: United States, China, Germany, Japan, United Kingdom, France, India, Italy, Spain and Mexico. By 2027, China is expected to top the list, with India in 4th place. That said, natural disasters, politics and currency fluctuations can strongly affect tourism.
Some countries have seen dramatic average growth in incoming tourism expenditure, tourism visitor exports, from 2010 to 2016, due to factors such as more open borders, infrastructure investment, and promotional efforts. For example, Myanmar 73.5%; Sri Lanka, 26.4%, Georgia 22.7% and Iceland 20%.
By 2027, Travel & Tourism GDP is expected to account for 11.4% of global GDP, and support 1 in 9 of all jobs in the world, or 23% of total global net job creation over the next decade. It is expected to outperform the global economy and increase its share of global economic activity across each of GDP, employment, exports and investment.
It’s forecast to outpace major global economic sectors including communications, financial and business services, manufacturing and retail and distribution.
This growth will see increased and ongoing investment into the supporting goods and service for tourism infrastructure and facilities, innovation in research and development of new technology and industrialisation driving economic growth and job creation, reducing income inequality and helping end poverty, water shortage and energy poverty.
Links with the other Sustainable Development Goals
Industry, infrastructure and innovation are core requirements to help solve the world's major challenges, and key to travel and tourism:
Goal 1 - End Poverty: Poverty alleviation may be constrained by investment and support for infrastructure and development.
Goal 2 - Zero hunger: Access to food and agricultural productivity may be improved by access to technology, industry and infrastructure.
Goal 4 - Quality education: requires investment in schools' construction, maintenance, furniture, facilities, equipment and technology.
Goal 6 - Access to affordable, safe and sustainable water and sanitation requires adequate infrastructure and facilities.
Goal 7 - Access to affordable, reliable, sustainable and modern energy can be catalyzed bytourism's innovation for cost incentive.
Goal 8 - Sustained, inclusive & sustainable economic growth, full & productive employment especially in SMEs as a source of innovation.
Goal 10 - Reduced inequalities between countries.
Goal 11 - Inclusive, safe, resilient and sustainable settlements
Goal 12 - Sustainable consumption and production patterns
Goal 13 - Climate change – adverse weather patterns can destroy and damage infrastructure.
Goal 14 - Life on land - innovation in industry can be transposed to conservation infrastructure, such as drone technology fighting poaching.
Goal 15 - Peace and Justice: Innovation and regeneration of infrastrcture and industry are vital to post-conflict situations for socio-economic growth.
Goal 17 - Partnerships