Tourism is back to pre-pandemic levels, but challenges remain, study says
KAMPALA, May 21, 2024 – International tourist arrivals and the travel and tourism sector’s contribution to global gross domestic product [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, as per the new World Economic Forum travel and tourism study, released today.
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, which 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
The global tourism industry is expected to recover from the lows of the COVID-19 pandemic and surpass the levels seen before the crisis. 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 its sustainability practices and the impact of new digital technologies, such as big data and artificial intelligence. In addition, labour 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
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 and North Africa region [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 favourable conditions for travel and tourism development. This is helped by conducive business environments, dynamic labour 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; major emerging travel and tourism destinations of 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 realised 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 various 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 prioritise actions such as leveraging tourism for nature conservation efforts; investing in skilled, inclusive and resilient workforces; strategically managing visitor behaviour 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 well-being and prosperity of communities worldwide.
The details
International tourist arrivals reached 97 percent of pre-pandemic levels in the first quarter of 2024. More than 285 million tourists travelled internationally in January-March, about 20 percent more than the first quarter of 2023, underscoring the sector’s near-complete recovery from the impacts of the pandemic.
In 2023 international tourist arrivals recovered 89 percent of 2019 levels, while export revenues from tourism remained at 97 percent and direct tourism GDP reached the same levels as in 2019.
UN Tourism’s projection for 2024 points to a full recovery of international tourism with arrivals growing 2 percent above 2019 levels. In line with this, the newest data released by the UN specialised agency for tourism calls for adequate tourism policies and destination management, aiming to advance sustainability and inclusion, while addressing the externalities and impact of the sector on resources and communities
- The Middle East saw the strongest relative growth, with international arrivals exceeding by 36 percent pre-pandemic levels in Q1 2024, or 4 percent above Q1 2023. This follows an extraordinary performance in 2023, when the Middle East became the first world region to recover pre-pandemic numbers [+22%].
- Europe, the world's largest destination region, exceeded pre-pandemic levels in a quarter for the first time [+1% from Q1 2019]. The region recorded 120 million international tourists in the first three months of the year, backed by robust intra-regional demand.
- Africa welcomed 5 percent more arrivals in the first quarter of 2024 than in Q1 2019, and 13 percent more than in Q1 2023.
- The Americas practically recovered pre-pandemic numbers this first quarter, with arrivals reaching 99 percent of 2019 levels.
- International tourism is experiencing a rapid recovery in Asia and the Pacific where arrivals reached 82 percent of pre-pandemic levels in Q1 2024, after recovering 65 percent in the year 2023.
By subregions, North Africa saw the strongest performance in Q1 2014 with 23 percent more international arrivals than before the pandemic, followed by Central America [+8%], the Caribbean and Western Europe [both +7%].
Southern Mediterranean Europe exceeded pre-pandemic levels by 1 percent, while South America virtually reached 2019 levels. Northern Europe recovered 98 percent of pre-pandemic levels, while Subsaharan Africa and North America both recovered 95 percent.
According to available data, many destinations across the world continued to achieve strong results in Q1 2024, including Qatar [+177% versus Q1 2019], Albania [+121%], Saudi Arabia [+98%], Tanzania [+53%], Curaçao (+45%), Serbia [+43%], Turks and Caicos [+42%], Guatemala [+41%] and Bulgaria [+38%].
The robust performance of international tourism can also be seen in the UN Tourism Confidence Index which reached 130 points [on a scale of 0 to 200] for the period January-April, above the expectations (122) expressed for this period in mid-January.
Receipts
International tourism receipts reached US$ 1.5 trillion in 2023, meaning a complete recovery of pre-pandemic levels in nominal terms, but 97 percent in real terms, adjusting for inflation.
By regions, Europe generated the highest receipts in 2023, with destinations earning US$ 660 billion, exceeding pre-pandemic levels by 7 percent in real terms. Receipts in the Middle East climbed 33 percent above 2019 levels. The Americas recovered 96 percent of its pre-pandemic earnings in 2023 and Africa 95 percent. Asia and the Pacific earned 78 percent of its pre-crisis receipts, a remarkable result when compared to its 65 percent recovery in arrivals last year.
Total export revenues from international tourism, including both receipts and passenger transport, reached US$ 1.7trn in 2023, about 96 percent of pre-pandemic levels in real terms. Tourism direct GDP recovered pre-pandemic levels, reaching an estimated US$ 3.3trn in 2023, equivalent to 3 percent of global GDP.
Several destinations achieved remarkable results in terms of receipts this quarter as compared to 2019 levels based on available data, including Serbia [+127%], Türkiye [+82%], Pakistan [+72%], Tanzania [+62%], Portugal [+61%], Romania [+57%], Japan [+53%], Mongolia [+50%], Mauritius [+46%] and Morocco [+44%].
Looking ahead to a full recovery globally in 2024
International tourism is expected to recover completely in 2024 backed by strong demand, enhanced air connectivity and the continued recovery of China and other major Asian markets.
The latest UN Tourism Confidence Index shows positive prospects for the upcoming summer season, with a score of 130 for the period May-August 2024 (on a scale of 0 to 200), reflecting more upbeat sentiment than earlier this year. Some 62 percent of tourism experts participating in the Confidence survey expressed better [53%] or much better [9%] expectations for this 4-month period, covering the Northern Hemisphere summer season, while 31% foresee similar performance as in 2023.
Challenges remain
According to the UN Tourism Panel of Experts, economic and geopolitical headwinds continue to pose significant challenges to international tourism and confidence levels.
IMF's latest World Economic Outlook [April 2024] points to a steady but slow economic recovery, though mixed by region. At the same time, persisting inflation, high interest rates, volatile oil prices and disruptions to trade continue to translate into high transport and accommodations costs.
Tourists are expected to continue to seek value for money and travel closer to home in response to elevated prices and the overall economic challenges, while extreme temperatures and other weather events could impact the destination choice of many travellers. This is increasingly mentioned by the UN Tourism Panel of Experts as a concern for the sector.
Uncertainty derived from the Russian aggression against Ukraine, the Hamas-Israel conflict and other mounting geopolitical tensions, are also important downside risks for international tourism.
As international tourism continues to recover and expand, fuelling economic growth and employment around the world, governments will need to continue adapting and enhancing their management of tourism at the national and local level to ensure communities and residents are at the center of this development.
About the Travel and Tourism Development Index 2024
The 2024 edition of the TTDI includes several improvements based on newly available data and recently developed indicators on the environmental and social impact of travel and tourism. The changes made to the 2024 Index limit its comparability to the previously published TTDI 2021. This year's report includes recalculated 2019 and 2021 results, using new adjustments.
TTDI 2024 reflects the latest available data at the time of collection – end of 2023. The TTDI 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.
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