China is likely to overtake the US to become the world’s biggest travel and tourism market by 2032, up from second position in 2021, according to the World Travel and Tourism Council.
The US, which retained its position last year as the world’s biggest and most powerful travel and tourism market, as measured by the sector’s contribution to gross domestic product, could lose the top spot in a decade, the WTTC said in its Economic Impact report released on Tuesday.
In China, the sector’s contribution to GDP could reach $3.9 trillion by 2032, up from $814.3 billion in 2021, as the world’s most populous country bounces back from the impact of the Covid-19 pandemic.
In the US, the travel and tourism sector’s contribution to the nation’s economy fell to $1.27tn in 2021 from $1.97tn in 2019. But despite “lengthy travel restrictions” imposed due to the pandemic, the country retained its top spot globally primarily by boosting domestic demand, the report said.
While the sector will continue to grow, its economic contribution is predicted to reach $2.66tn by 2032, ranking it second after China, WTTC said.
In 2021, the US and China were followed by Germany, Japan, Italy, India, France, Mexico, the UK and Spain as the top 10 travel and tourism markets.
By 2032, while the top 10 countries on the list are forecast to remain the same, the order will change to China, the US, India, Germany, Japan, the UK, France, Mexico, Italy and Spain, the tourism body said.
Overall, the contribution of travel and tourism to global GDP between 2022 and 2032 is expected to grow at an average annual rate of 5.8 per cent — more than double the 2.7 per cent predicted for the economy, the report said.
The sector is also expected to generate 126 million additional jobs during the period.
The travel and tourism sector has remained resilient “despite the impact of travel restrictions around the world which failed to halt the spread of the virus,” said Julia Simpson, president and chief executive of WTTC.
“Despite a challenging macro environment, travel and tourism has bounced back. The world, with some exceptions, is travelling again. And we are seeing a resurgence in business travel. Over the next 10 years, travel and tourism growth will outstrip the global economy.”
The WTTC predicts worldwide business travel will grow more than 41 per cent this year.
It could further increase at an average rate of 5.5 per cent annually over the next 10 years, with a faster recovery expected in the Asia-Pacific region, the report said.
Travel and tourism was among the sectors worst hit by the pandemic in 2020 as countries shut their borders and imposed lockdowns to curb the spread of the virus.
In 2020, 62 million jobs were lost in the sector and it suffered losses of almost $4.9tn, with its global contribution to GDP declining by 50.4 per cent year-on-year, compared with a 3.3 per cent decline in the global economy.
“While 2021 saw the beginning of the recovery for the global travel and tourism sector, this was slower than expected, due in part to the impact of the Omicron variant, stringent and inconsistent border restrictions and the lack of co-ordination among governments to tackle the pandemic,” Ms Simpson said in the report.
The sector’s contribution to GDP increased by 21.7 per cent last year to $5.8tn, while it also added 18.2 million jobs.
“However, the future outlook is positive … Despite the difficulties the sector has been facing, our projections point to a strong decade of growth,” she said.
In 2022, as travellers’ confidence improves, the sector is “estimated to hasten its pace of recovery” to 43.7 per cent compared with 2021 and add a further 10 million jobs, the report said.
Travel and tourism GDP is also likely to return to pre-pandemic levels by the end of 2023.
“While government support has been instrumental throughout this crisis, the swift recovery of the sector will only be possible if leaders and public officials work together and provide clear and consistent rules,” Ms Simpson said.
“Governments need to focus on coexisting with Covid-19 while enhancing preparedness for future crises, offering safe travel experiences, supporting equitable vaccine distribution and continuing to ease the conditions of entry to destinations.”