Global travel and tourism exceeds $6 trillion in 2005

Travel and tourism spending exceeded $6 trillion (£3.4 trillion) globally in 2005, according to research released today by the World Travel & Tourism Council and Accenture. 

The data reveals industry growth of 5.7% from 2004 to 2005 but predicts a slower level of 4.6% in 2006 to $6.5 trillion (£3.7 trillion) in 2006.

Travel and tourism is expected to represent 3.6% of total global Gross Domestic Product (GDP) in 2006, 10.3 per cent if include tourism related business (eg catering, cleaning).

The global travel and tourism industry is expected to create 2.5 million new jobs in 2006, comprising a total of 76.7 million jobs, or 2.8% of world employment

The UK’s travel and tourism is expected to grow 3.7% this year, declining to 3.1% per annum, in real terms, between 2007 and 2016.

The UK is expected to spend $168,827.7 million on personal travel and tourism in 2006, the equivalent of $2,821 per head (£1,608).

Travel and tourism in the UK is expected to generate $328,298.6 million (£187 million) of economic activity this year – the sixth largest in the world.

The UK’s travel & tourism economy (direct and indirect impact) in 2006 is expected to account for 9.4% of GDP and 2,661,000 jobs (8.6% of total employment), according to the report.

The Tourism Satellite Accounting research, sponsored by management consulting group Accenture and prepared by Oxford Economic Forecasting, includes reports of travel and tourism spending for 2005 as well as industry forecasts for 174 countries and the world.

The December 2004 tsunami and the 2005 bombings in London and Egypt, had local impact but did not materially affect global tourism, according to the WTTC.  

WTTC executive vice-president Richard Miller added: “The years 2004 to 2006 will be seen as a period of significant growth for the industry. Although events like the tsunami, bombings and hurricanes, as well as a major increase in the price of oil, could have dampened demand, it appears that consumers are becoming more resilient, and travel and tourism continue to be a significant part of everyday life.”

President Jean-Claude Baumgarten said: “We are witnessing the power, speed and vitality of travel and tourism and how they can bring economic opportunity and jobs to people and economies seeking sustainable development.”

WTTC worldwide forecasts for 2006 include:

*The industry is expected to grow 4.6 per cent (real terms), to total $6.5 trillion in 2006.  

*The 10-year annualized growth (2007-2016) forecast is 4.2% a year, demonstrating an outlook for strong long-term growth.

*Visitor exports are expected to grow to nearly $900 billion in 2006 due to increases in international travel. This increase represents real growth of 6.5%.

The WTTC’s 2006 list of top 10 travel and tourism economies sees Montenegro having the highest growth rate for the third year in a row as it continues to use the industry as a key to economic development and job creation. 

India and China are placed second and third respectively, illustrating the impact the emerging middle-class has on travel and tourism.

Four central and eastern European countries – Romania, Croatia, Latvia and Albania – also join the list.

Travel and Tourism Demand, 2007-2016 (% Annualised Real Growth)

1. Montenegro 10.2

2. China 8.7

3. India 8.0

4. Romania 7.9

5. Croatia 7.6

6. Vietnam 7.5

7. Latvia 7.3

8. Maldives 7.2

9. Albania 7.0

10. Cambodia 7.0

“Global tourism activity is setting new records globally but what is really amazing is how smaller, developing countries like Montenegro, Romania, Namibia and Brunei are using travel and tourism as catalysts for broader economic development,” said Baumgarten. “They’ve come to appreciate the impact of international visitors and resident tourism and have made strategic decisions from the highest office to focus attention, resources and effort on the economic potential.

“Travel and tourism offer great opportunity for recovery to places like New Orleans, which suffered the devastation of Hurricane Katrina last summer. We saw the spirit of our industry in the pictures from Mardi Gras last week. We also see the people of New Orleans returning to jobs in restaurants, hotels, shops and jazz clubs. Travel and tourism are demonstrating the spirit of recovery in New Orleans and around the world.”

Accenture transportation and travel service practice global managing director Peter Franz said: “Insight into how and where the travel and tourism industry is growing is critical for companies that want to improve their performance and take advantage of that growth, either in their own countries or around the world.

“As airlines, lodging companies and tour operators work to improve their bottom line, having usable data about both the industry and their own business is essential. The high performers will be those that can manage and use industry and customer data to make meaningful decisions.”

*The 2006 Tourism Satellite Accounting research is posted on www.wttc.org

Report by Phil Davies