By Renn Offor
Travel and tourism, with all the hydra headed challenges it encountered in 2015, has still demonstrated so much resilience as it added 7.2 million jobs to the global economy and contributed over $ 7.2 trillion in GDP, while Uganda leads the pack in Africa as the country with the highest contribution from travel and tourism to it Gross Domestic Product (GDP). This is according to the World Travel & Tourism Council’s (WTTC) Economic Impact Report 2016 launched on Monday.
WTTC President & CEO, David Scowsill, speaking on this trend observed that, “Travel and tourism once again has proved its resilient nature. Terror attacks, disease outbreaks, currency fluctuations and geopolitical challenges have impacted the sector at a country or regional level, but travel and tourism at the global level continues to produce another robust performance”.
According to the findings, Travel and tourism direct contribution to GDP growth outpaced overall GDP country growth in 127 of the 184 countries covered by the research. Countries where Travel & Tourism most markedly outperformed the wider economy in 2015 include Iceland, Japan, Mexico, New Zealand, Qatar, Saudi Arabia, Thailand, and Uganda. The Economic Impact Reports provide economic data on the contribution of the travel and tourism sector on a global level as well as for 184 countries and 24 regions.
The significance of this report for Africa is that Uganda has surprised many other countries with its current performance. This performance is inspire of the fact that since the launch of the EAC visa, Uganda has continued to charge higher visa fees that all the other East African countries who all signed on the single visa. While the other countries charge $50 dollars and $30 Uganda charges $100 dollars for entry and $100 for EAC. “Despite uncertainty in the global economy and specific challenges to travel and tourism last year, the sector grew by 3.7 percent, contributing a total of 9.8 percent to the global GDP”, Mr. Scowsill added.
The WTTC report went on to note that that “Travel and tourism also supported a total of 284 million jobs in 2015, an increase of 7.2 million, which means it now supports, directly and indirectly, 1 in 11 jobs on the planet.”
The report also observed that the growth of the sector is boosted by a worldwide increase in middle-class income households, an ageing population, which tends to travel more and growing connectivity between destinations, making travel more accessible and affordable.
‘All regions of the world showed growth in total travel and tourism contribution to GDP in 2015. Southeast Asia was the fastest growing region with growth of 7.9 percent followed by South Asia, which grew 7.4 percent. Middle East grew 5.9 percent, Caribbean 5.1 percent, Sub-Saharan Africa 3.3 percent, North America 3.1 percent, Europe 2.5 percent, Northeast Asia 2.1 percent, Latin America 1.5 percent and North Africa 1.4 percent.
‘In 2016, Travel & Tourism’s total contribution to GDP is expected to grow by 3.5 percent, and is again expected to outpace global economic growth for the sixth consecutive year. Security concerns, border policies, oil prices, the strength of the US dollar relative to other currencies, and other macroeconomic developments will dictate travel trends in 2016 and beyond. However, over the next decade, travel and tourism is expected to continue to outpace the world economy, growing by four percent on average annually’.
It went on to note the importance of travel and tourism in the economic activity of countries, explaining that travel and tourism is an important economic activity in most countries around the world. As well as its direct economic impact, the sector has significant indirect and induced impacts. The UN Statistics Division-approved Tourism Satellite Accounting methodology (TSA:RMF 2008) quantifies only the direct contribution of Travel & Tourism. WTTC recognises that Travel & Tourism’s total contribution is much greater however, and aims to capture its indirect and induced impacts through its annual research.
The direct contribution of Travel & Tourism to GDP reflects the ‘internal’ spending on Travel & Tourism (total spending within a particular country on Travel & Tourism by residents and non-residents for business and leisure purposes) as well as government ‘individual’ spending – spending by government on Travel & Tourism services directly linked to visitors, such as cultural (e.g. museums) or recreational (eg national parks).
‘The direct contribution of Travel & Tourism to GDP is calculated to be consistent with the output, as expressed in National Accounting, of tourism-characteristic sectors such as hotels, airlines, airports, travel agents and leisure and recreation services that deal directly with tourists. The direct contribution of Travel & Tourism to GDP is calculated from total internal spending by ‘netting out’ the purchases made by the different tourism industries. This measure is consistent with the definition of Tourism GDP, specified in the 2008 Tourism Satellite Account: Recommended Methodological Framework (TSA: RMF 2008).
On the total contribution of Travel & Tourism, it explained that it includes a ‘wider impacts’ (i.e. the indirect and induced impacts) on the economy. The ‘indirect’ contribution includes the GDP and jobs supported by Travel & Tourism investment spending – an important aspect of both current and future activity that includes investment activity such as the purchase of new aircraft and construction of new hotels; Government ‘collective’ spending, which helps Travel & Tourism activity in many different ways as it is made on behalf of the ‘community at large’ – e.g. tourism marketing and promotion, aviation, administration, security services, resort area security services, resort area sanitation services, etc. and domestic purchases of goods and services by the sectors dealing directly with tourists – including, for example, purchases of food and cleaning services by hotels, of fuel and catering services by airlines, and IT services by travel agents’.
The ‘induced’ contribution measures the GDP and jobs supported by the spending of those who are directly or indirectly employed by the Travel & Tourism sector.