The World Travel & Tourism Council (WTTC) is forecasting +3.1% ‘long-term growth’, despite the major macro-economic challenges posed by terrorism, political turmoil, exchange rates and issues such as Brexit.

 

Within its updated WTTC Economic Impact Report 2016, the global tourism body says that despite the many challenges faced by the travel and tourism industries over the first six months of 2016, the sector is still expected to grow by 3.1% and now set to outpace the previous global economic growth forecast at 2.3%.

 

The WTTC says the regional outlook for direct Travel & Tourism GDP in 2016 points to South Asia as leading  growth at 5.9%, driven by strong economic prospects in India. However, it believes that Latin America will be the worst, with an expected 0.9% decline. It adds that this will be driven by continuing ‘weakness in Brazil’.

 

ASIA REMAINS POSITIVE

More positively, the Northeast and Southeast Asian regions are both expected to show solid growth at 4.7% and 4% respectively, stimulated by growth in Mainland China of 6.3%. North America is also predicted to perform well, with forecast growth of 3.1%, while Europe will be challenged by lower visitor spend, but will nevertheless still grow by 2.2%.

 

Despite this mostly positive global picture, the WTTC admits that the outlook for some countries has deteriorated since its last March 2016 forecast – mostly due to terrorism incidents.

 

 

 

COUNTRIES AND MARKETS THAT ARE SUFFERING

In France, the sector’s direct contribution to GDP is still growing, but the forecast has been reduced from 2.9% to 1.1%, due to macroeconomic downgrades in other European countries, and compounded by the recent incidents in the country, including the atrocity in Nice.

 

In Turkey, the lack of growth in travel and tourism’s direct contribution to GDP has also been reduced further from -0.2% to -3.2%, due to several tragic terror attacks, a massive downturn in tourism revenues following the  diplomatic dispute with Russia – plus a failed coup and the country’s perceived proximity to the Syrian conflict.

 

Unfortunately, Brazil is also expected to continue to contract, despite a minor boost in positive perception from the recent Olympic Games. The WTTC now says that its growth prospects have been downgraded from -0.9% to -1.6% as a direct result of political turmoil and weak macroeconomic performance.

 

Meanwhile, back in Europe (so to speak) the UK is expected to ‘hold up well in 2016’ with growth of 3.6%, with weaker domestic spending growth and a projected 3% decline in UK outbound holidays expected to be offset by higher spending in the UK by international visitors – thanks mostly to the favourable exchange rate. [The report also includes a focus on the impact of the Brexit decision-Ed].

 

 

 

TOURISM OUTPACING ECONOMIC GROWTH BY 1%…

Commenting on the findings, David Scowsill, President & CEO of the WTTC said: “Our update report highlights the resilience of travellers and the robustness of our sector, as tourism continues to outpace global economic growth by nearly 1%.

 

“Whilst we should not downplay the impact of incidents or turmoil at individual country level, on a macro-economic level we continue to register strong growth. It is important to remember that tourism is a force for good.

 

“It brings tremendous social and economic benefits to countries and connects people from different cultures and backgrounds. We call on governments to continue to focus on the economic and social benefits of Travel & Tourism, and to work together with the private sector to combat some of the challenges we face.”