WTTC expects a year of zero growth for USA travel and tourism but longer term could be much brighter
The launch of the World Travel Tourism Council's (WTTC's) annual economic impact research on Thursday, March 11 at ITB Berlin confirmed a 5 percent decline in global travel and tourism economy GDP in 2009. "And 2010 will be a flat year," said the council's president and CEO, Jean-Claude Baumgarten. "The USA is not likely to fare any better," Baumgarten added. "The economy has emerged from recession, with growth surging in Q4 2009. However, with the impetus provided by the stock cycle and fiscal policy set to fade, we expect quarterly growth to slow."
2010 is expected to bring a very gradual recovery in travel and tourism, with business travel and investment continuing to drag on growth," Baumgarten said. In terms of travel and tourism jobs in 2010, the picture is even gloomier this year, with WTTC forecasting a decline of 3 percent to 13.6 million - 9.8 percent of total employment in the USA. But travel and tourism economy employment could increase its share to 10.7 percent of total employment by 2020, or nearly 17 million jobs, if the policy environment is conducive to growth."
US travel and tourism has received very little government support since the beginning of the global economic crisis, despite its significant contribution to GDP, employment, and investment," said Baumgarten. "Think of all the support that has gone to the financial sector, even though its share of GDP is not that much larger." But this situation clearly cannot continue in the long term," Baumgarten warned, "and, indeed, it looks as though it may be about to change with the long overdue signing of the Travel Promotion Act. Increased international promotion and marketing are critical to attract growth from overseas markets and to ensure that the sector realises its long-term potential as a major generator of employment, driving economic growth."
WTTC strongly maintains that it is crucial for government policy to support rather than hamper the long-term development of travel and tourism. And this means that policymakers need to be wary about placing extra burdens on this previously dynamic sector at this crucial time, when profitability is already under severe pressure.
"Our latest research shows that, if the US government can ensure a favorable operating environment, the country will see a strong recovery in travel and tourism demand over the next ten years," said Baumgarten, "and this will also stimulate a recovery in investment, resulting in an annual growth of more than 11 percent in travel and tourism investment for the USA between now and 2020."
• Travel and tourism economy GDP is the broadest measure of the economic contribution of the travel and tourism sector to gross domestic product. It records the activity of traditional travel and tourism providers (e.g., lodging, transportation, etc.), plus tourism-related investment, public spending, and export of goods. It includes both the direct effects and the indirect effects via the supply chain of travel and tourism spending.
• Travel and tourism economy employment comprises the jobs generated by travel and tourism economy GDP, the broadest measure of travel and tourism's employment impact.
• Capital investment includes fixed investment expenditure by travel and tourism service providers and government agencies to provide facilities, capital equipment, and infrastructure for visitors.