Asia-Pacific and Africa foresee an investment increase of 161% in 2022 compared to 2000. Private capital investment is essential for the success of the sector
The 2023 Global Trends Report on the Economic Impact on Travel & Tourism from the World Travel & Tourism Council (WTTC) today reveals an encouraging resurgence in Travel & Tourism investment, overcoming setbacks from the pandemic and signaling a strong return to growth. .
From 2010 to 2019, investment grew steadily at a CAGR of 4.3%, from $754.6 billion in 2010 to $1.1 trillion in 2019, or 4.5% of all investment throughout the economy. COVID-19 hit hard, causing a decline of 24% in 2020 and another 8% in 2021.
However, 2022 marked a turning point.
Spurred by the global phenomenon of pent-up demand, investment in travel and tourism increased to $856 billion, up 11.1% from the previous year. Although this was 22.5% below 2019 levels, it was still 53% higher in 2022 than in 2000.
In regions like 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 important growth achieved in the past two decades.
However, investment in travel and tourism in these regions in 2022 remained above the levels observed in 2000.
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 prosper once again. China trails behind with an investment of $146 billion in 2022, and Saudi Arabia rounds out the top three with a total investment of $42 billion in the same year.
Island destinations lead the top places for travel and tourism investment as a percentage of their total economies in 2022. The US Virgin Islands leads the way, funneling 35% of total economic investment into travel and tourism, followed by close by Antigua and Barbuda with 34%. and Aruba with almost 32%.
Private investment in new aircraft, hotels and car fleets is essential to increase the sector's capacity. 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 setbacks from the pandemic, 2022 growth is a promising sign of things to come."
"Investment in Travel & Tourism is an integral part of the world's recovery and growth. The industry's resilience and innovation potential continue to propel us forward. We remain confident, but vigilant, in our pursuit of a brighter and brighter global future." connected" .
A look ahead
The WTTC forecasts strong 11.5% growth in investment in 2023 to $955 billion, with a return to pre-pandemic levels expected by 2025. By 2033, the WTTC forecasts a promising average annual growth of 6.1% globally, with the strongest annualized growth rates projected to be in Asia-Pacific and the Caribbean.
However, the global increase 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 strength of this vital sector.
