The global travel and tourism market continues to grow, signaling optimism on the horizon for those in the sector. According to the World Travel & Tourism Council’s annual research into the economic impact and social importance of travel and tourism, the sector grew 3.9 percent to contribute a record $8.8 trillion and 319 million jobs to the world economy in 2018. Last year was the eighth straight year this gain was above the growth rate of the world’s gross domestic product (3.2 percent).
The WTTC noted that travel and tourism is the second fastest-growing sector in the world, ahead of healthcare (+3.1 percent), information technology (+1.7 percent) and financial services (+1.7 percent). Its growth is only behind manufacturing, which grew 4 percent in 2018.
Related Story: 3 things about the U.S. economy to keep an eye on in 2019
With that growth comes increased spending, naturally. According to the data, the share of leisure spend increased to 78.5 percent from 77.5 percent in 2017. On the flip side, that means business spend share decreased from 22.5 percent in 2017 to 21.5 percent in 2018. The travel and tourism sector also increased its share of spend from international tourists to 28.8 percent, up from 27.3 percent in 2017. That means 71.2 percent of spending comes from domestic tourists.
U.S. Holds No. 1 Status
Despite a flat line in international visitors from China, the United States still maintained its status as the world’s largest travel and tourism economy in 2018, according to the WTTC. The sector contributed nearly $1.6 trillion to GDP last year, or 7.8 percent of GDP in the U.S., with the sector growing 2.2 percent when accounting for inflation.
The numbers might be surprising considering Chinese travel to the U.S. has recorded average annual growth of 23 percent over the past 10 years, only to plummet last year due to trade tensions. Chinese travelers comprise 4 percent of total U.S. visitors but 11 percent of all spend, which shows the country’s economic impact to the states.
Related Story: Luxury, portfolio sales lead deal activity in 2018
“Given the economic importance of Chinese visitors, any thawing in the trade relations between the two countries would have a positive effect for the wider U.S. economy,” said Gloria Guevara Manzo, president/CEO of the WTTC.
What’s more, the travel and tourism industry in the U.S. contributed 15.6 million jobs. International spend to the country also decreased 0.9 percent last year to $198.8 billion. Guevara said that because the U.S. is the biggest travel market, the country’s broader economic performance needs to be a top priority. She suggested four ways that can happen:
1. Preserve Brand USA: The program should be expanded beyond 2020 in order to continue marketing the U.S. as a premier, global destination.
2. Rebrand and expand visa waiver program: This should be rebranded as “Secure Travel Partnership Program” and expand beyond the current 38 participating nations to other qualified countries, according to Guevara.
3. Update infrastructure: Modernization is needed, especially at airports.
4. Support biometric passenger ID: The biometric passenger identification and processing initiative is an area where the U.S. is leading the world, according to the WTTC. The work by U.S. Customs and Border Protection on the roll-out of a seamless traveler experience is helping to transform the passenger experience, enhance security and create jobs, according to Guevara.