Tourism Has Rebounded Post Pandemic, But Inclusivity Challenges Remain

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Developing economies — which account for 52 out of 71 economies improving since
2019 — are making strides, but significant investment is needed to bridge gaps
and increase market share.

The travel and tourism sector’s contribution to global GDP are expected to
return to pre-pandemic levels this year, driven by the lifting of
COVID-19-related travel restrictions and strong pent-up demand, according to the
World Economic Forum’s 2024 travel and tourism study.

Topping the 2024 list of economies are the United States, Spain,
Japan, France and Australia. The Middle East had the highest
recovery rates in international tourist arrivals (20 percent above the 2019
level); while Europe, Africa and the Americas all showed a strong
recovery of around 90 percent in 2023.

These are some of the top findings of the Travel & Tourism Development Index
2024
(TTDI) — a biennial report published in collaboration with the
University of Surrey that analyses the travel and tourism sectors of 119
countries around a range of factors and policies.

“This year marks a turning point for the travel and tourism sector, which we
know has the capacity to unlock growth and serve communities through economic
and social transformation,” said Francisco
Betti
, Head of the
Global Industries team at the World Economic Forum. “The TTDI offers a
forward-looking window into the current and future state of travel and tourism
for leaders to navigate the latest trends in this complex sector and sustainably
unlock its potential for communities and countries across the world.”

Post-pandemic recovery

As the report highlights, global tourism is expected to recover from the lows of
the COVID-19 pandemic and even surpass pre-pandemic levels. This is largely
being driven by a significant increase in demand worldwide — which has coincided
with more available flights, better international openness, and increased
interest and investment in
natural
and cultural
attractions
.

However, the global recovery has been mixed. While 71 of the 119 ranked
economies increased their scores since 2019, the average index score is just 0.7
percent above pre-pandemic levels. Although the sector has moved past the shock
of the global health crisis, it continues to deal with other external challenges
— from growing macroeconomic, geopolitical and environmental risks; to increased
scrutiny of sustainability
practices
;
and the impact of new digital technologies, such as big data and artificial
intelligence
.
In addition, labor shortages are ongoing; and air route capacity, capital
investment, productivity and other sector supply factors have not kept up with
the increase in demand. This imbalance, worsened by global inflation, has
increased prices and service issues.

TTDI 2024 highlights

The 2024 edition of the TTDI — which includes newly available data and recently
developed indicators on the environmental and social impact of travel and
tourism — is part of the Forum’s broader work with industry
communities

actively working to build a better future enabled by sustainable, inclusive and
resilient industry ecosystems. Out of the top 30 index scorers in 2024, 26 are
high-income economies: 19 are based in Europe, seven are in Asia-Pacific,
three are in the Americas; and one (the United Arab Emirates) is in the
Middle East/North Africa (MENA). The top 10 countries in the 2024
edition are the United States, Spain, Japan, France, Australia, Germany, the
United Kingdom, China, Italy and Switzerland.

The results highlight that high-income economies generally continue to have more
favorable conditions for travel and tourism development. This is helped by
conducive business environments; dynamic labor markets; open travel policies;
strong transport and tourism infrastructure; and well-developed natural,
cultural and non-leisure attractions.

Nevertheless, developing countries have seen some of the greatest improvements
in recent years. Among the upper-middle-income economies, China has cemented
its ranking in the top 10; and major emerging destinations in Indonesia,
Brazil and Türkiye have joined China in the top quartile of the
rankings. More broadly, low- to upper-middle-income economies account for over
70 percent of countries that have improved their scores since 2019, while MENA
and sub-Saharan Africa are among the most improved regions. Saudi Arabia and
the UAE are the only high-income economies to rank among the top 10 most
improved economies between 2019 and 2024.

Despite these strides, the TTDI warns that significant investment is needed to
close gaps in enabling conditions and market share between developing and
high-income countries. One possible pathway to help achieve this would be
sustainably leveraging natural and cultural assets – which are less correlated
with country income level than other factors — and can offer developing
economies an opportunity for tourism-led economic
development
.

“It’s essential to bridge the divide between differing economies’ ability to
build a strong environment for their travel and tourism sector to thrive,” said
Iis Tussyadiah, Professor and Head of
the School of Hospitality and Tourism Management at the University of Surrey.
“The sector has big potential to foster
prosperity

and mitigate global risks, but that potential can only be fully realized through
a strategic and inclusive
approach
.”

Mitigating future global challenges

According to the World Economic Forum’s 2024 Global Risks
Report
,
the travel and tourism sector faces complex
risks including geopolitical uncertainties, economic fluctuations, inflation and
extreme weather. Balancing growth with sustainability also remains a major
problem due to high seasonality,
overcrowding,
and a likely return of pre-pandemic emissions
levels.
The report also analyses persistent concerns about equity and inclusion. While
the tourism sector offers a major source of relatively high-wage jobs,
particularly in developing countries, gender parity remains a major issue for
regions such as MENA and South Asia.

Despite these challenges, the sector can play a significant role in addressing
them. To achieve this, decision-makers should prioritize actions such as
leveraging tourism for nature conservation efforts; investing in skilled,
inclusive and resilient workforces; strategically managing visitor behavior and
infrastructure development; encouraging cultural exchange between visitors and
local communities; and using the sector to bridge the digital divide, among
other policies.

If managed strategically, the travel and tourism sector — which has historically
represented 10 percent of global GDP and employment — has the potential to
emerge as a key contributor to the wellbeing and prosperity of
communities
worldwide.

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