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Benchmarking Travel & Tourism Global summary How does Travel & Tourism compare to other sectors? Sponsored by: Summary of Findings, April 2012 Foreword For over twenty years WTTC has worked to bring the Travel & Tourism private sector together to speak with one voice. Our Members know that progress will only be made with clear, unambiguous and unified messages. From the outset, our Members understood that hard economic facts were the crucial foundation upon which to base these messages. As a result WTTC has invested heavily in developing a methodology to measure the economic impact of Travel & Tourism around the world. In 2011 we accounted for 9% of GDP, a total of 6 trillion dollars. We supported 255 million jobs. That means one in 12 jobs on the planet. However, it is no longer sufficient just to communicate how important we are as an industry. We have to David Scowsill recognise that in government eyes Travel & Tourism is just one activity that sits President & CEO alongside many other sectors. These other sectors are better understood than World Travel & Tourism our industry. When we hit the depths of the last recession, which industries Council immediately dominated the attention of governments around the world – particularly in the US and Europe? The answer was financial services and automotive manufacturing. Both received billions of dollars of government cash to keep them functioning. With the support of our Founder Member American Express, we have executed this substantial research study, which puts Travel & Tourism in the broader context of other sectors, and the messages emerging are powerful. World Travel & Tourism Council 2 Foreword More than any other, the travel industry drives commerce and business, facilitates connections and enables tourism and adventure. American Express has a proud heritage of more than 160 years in travel and we’re pleased to support this new research with WTTC to ensure that travel stays vibrant and vital for many years to come. When American Express helped to establish WTTC more than 20 years ago, we started with a firm belief in the value of travel and a William Glenn hope to spread that message across the world. We’re proud that President , Global WTTC has been a driving force in increasing awareness of the Commercial Services positive impact of travel and tourism ever since. This new analysis American Express gives our industry an important tool at our fingertips to benchmark the role that travel and tourism plays in the global marketplace. In a year when Travel & Tourism is projected to directly contribute $2 trillion and 100 million jobs to the world economy, this research from American Express and WTTC is an important addition to the conversation. World Travel & Tourism Council 3 Outline Introduction……………………………………………................ 5 Key findings………………………………………………………. 10 Trade Summary…………….……………………………………. 21 Linkages summary……………………….…………………….... 24 Data sources and methodology……………………..…………. 30 World Travel & Tourism Council 4 Introduction • The World Travel & Tourism Council (WTTC) has spearheaded global analysis of the economic importance of the sector for over 20 years. This research has established the contribution of Travel & Tourism on an ongoing basis to over 180 countries in absolute size, share of the economy, and growth. • Around the world, WTTC research is referenced as the authoritative source of the role of Tourism in generating GDP, income, and employment. • WTTC is now releasing new research on the role that Travel & Tourism plays in the world economy in comparison to other economic sectors. • The results of these comparisons provide new perspectives on the relative significance of Travel & Tourism as well as some of its unique advantages in driving current and future global economic growth. World Travel & Tourism Council 5 Introduction: Summary of Research Structure • This new WTTC research benchmarks Travel & Tourism against an assortment of other sectors for twenty countries and for each world region. Regions Countries • World • Australia • Jamaica • Americas • Argentina • Japan • Europe • Brazil • Republic of Korea • Asia Pacific • Canada • Mexico • Middle East • China • Russia • Africa • France • South Africa • Germany • Turkey • India • UAE • Indonesia • United Kingdom • Italy • USA World Travel & Tourism Council 6 Introduction: Summary of Research Structure • The following metrics are analysed by sector for each country and region: • GDP (size and share of economy) • Employment contribution (size and share of economy) • Historic growth • Expected growth • Export contribution • Strength of linkages to the rest of the economy • Job creation potential World Travel & Tourism Council 7 Introduction: Sectors referenced The following sectors have been analysed in comparison to Travel & Tourism. They were selected as having a similar breadth and global presence as Travel & Tourism. • Mining: includes the extraction of oil, natural gas, coal, metals, and related services • Education: includes all levels of educational services • Chemicals manufacturing: includes drugs & medicines, plastics, rubber, paint, polishes, ink, perfumes, cosmetics, soap, cleaning materials, fertilizer, pesticides, other chemicals • Automotive manufacturing: includes motor vehicles and parts & accessories • Communications: includes post (national and private) and telecommunications • Financial services: includes banking, investment services, insurance World Travel & Tourism Council 8 Introduction: Levels of industry impacts The analysis examines the economic value of industries on three levels. • Direct: this includes only those employees and the related value added T& for the relevant sector. In the case of T Travel & Tourism, we only count the DI RE OV value added of the accommodation, ACCOMODATION ACCOMMODATION CT recreation, transportation, and other ER CATERING, ENTERTAINMENT related sectors. RECREATION, TRANSPORTATION A &OTHER TRAVEL RELATED SERVICES LL • Indirect: this measures the supply chain T &T PRINTING/PUBLISHING, UTILITIES impact (also called inter-industry T& FINANCIAL SERVICES, SANITATION SERVICES T linkages) for each sector. IM ECT IN FURNISHINGS AND EQUIPMENT SUPPLIERS, PA D SECURITY SERVICES, RENTAL CAR MANUFACTURING, IR • Induced: this measures the impacts of CT TRANSPORTATION ADMINISTRATION, TOURISM incomes earned directly and indirectly PROMOTION, SHIP BUILDING, AIRCRAFT MANUFACTURING, RESORT DEVELOPMENT, GLASS PRODUCTS, IRON/STEEL as they are spent in the local economy. T& • T The sum of direct, indirect, and induced FOOD & BEVERAGE SUPPLY, RETAILERS IN impacts equals the total economic BUSINESS SERVICES, WHOLESALERS, COMPUTERS, D UC impact of a sector. UTILITIES, MANUFACTURERS, HOUSING, PERSONAL SERVICES ED World Travel & Tourism Council 9 Key findings How does Travel & Tourism compare to other sectors? Sponsored by: World Travel & Tourism Council 10 Key findings: Global Direct GDP ($) • At $2 trillion in 2011, Travel & Global Direct GDP by Industry in 2011 Tourism direct industry GDP is $US billion (2011 prices) larger than the automotive 5,000 and chemicals manufacturing 4,500 sectors. 4,000 3,500 • Travel & Tourism directly 3,000 generates more than double 2,500 the GDP of automotive 2,000 manufacturing and is one-third 1,500 larger than the global 1,000 500 chemicals industry. - manufacturing Travel & Communication Manufacturing Tourism Education Mining Financial services of chemicals • Automotive Travel & Tourism is three- services quarters the size of the global education, communications, and mining sectors. World Travel & Tourism Council 11 Key findings: Global Total GDP Contribution ($) • At $6.3 trillion in 2011, the Global GDP Impact by Industry in 2011 GDP impact of Travel & $US billion (2011 prices) Tourism is larger than that of 14,000 some of the largest Indirect + Induced 12,000 manufacturing sectors— namely automotive and 10,000 Direct chemicals manufacturing. 8,000 • Travel & Tourism’s total 6,000 economic impact exceeds that 4,000 of the mining sector and 2,000 nearly equals that of the global education sector. 0 manufacturing Travel & Communication Manufacturing Tourism Education Mining Financial services of chemicals Automotive services World Travel & Tourism Council 12 Key findings: Global Total GDP Impact (share) • At 9.1% of global GDP, Travel & Tourism generates more Global GDP by Industry in 2011 economic output than Share of World Economy automotive manufacturing 20% (7.9%), mining (8.0%) and 18% Indirect + Induced chemicals manufacturing 16% Direct (9.0%). 14% 12% • Travel & Tourism contributes 10% roughly the same share of 8% global GDP as the global 6% education and 4% 2% communications industries. 0% manufacturing Travel & Communication Manufacturing Tourism Education Mining Financial services • of chemicals Travel & Tourism generates Automotive services about half what the global banking and financial services industry contributes. World Travel & Tourism Council 13 Key findings: Regional Direct GDP • Travel & Tourism directly contributes more to GDP World Direct GDP for All Sectors than automotive $US billion (2011 prices) manufacturing in every 1,800 Travel & Tourism region of the world. 1,600 Automotive manufacturing Manufacturing of chemicals • In the Americas, Travel & 1,400 Communication services Tourism GDP is 3 times 1,200 Financial services larger than auto Mining 1,000 manufacturing. Education 800 • In Europe, Travel & Tourism 600 GDP is twice the size of auto 400 manufacturing. 200 • Travel & Tourism GDP is - Pacific Africa Americas Middle Europe larger than the chemicals East Asia industry in every world region except Asia, where it is only 9% lower. World Travel & Tourism Council 14 Key findings: Global Direct Employment • In terms of employment, the importance of Travel & Tourism is Global Direct Employment by Industry even more pronounced. 2011, millions • With 98 million people directly 160 employed in 2011, Travel & 140 Tourism directly employs: 120 100 • 6 times more than 80 automotive manufacturing 60 • 5 times more than the global 40 chemicals industry 20 - • 4 times more than the global manufacturing Travel & Communication Manufacturing Tourism Financial Education Mining services of chemicals Automotive mining industry services • 2 times more than the global communications industry • A third more than the global financial services industry World Travel & Tourism Council 15 Key findings: Global Total Employment • With a total impact of 8.7% of world • Travel & Tourism sustained 255 million employment, Travel & Tourism is one jobs in 2011. This exceeds to the jobs of the leading job creators in the impact of auto manufacturing, chemicals world. manufacturing, and mining. It is nearly on par with education. Global Employment by Industry Global Employment by Industry Share of global employment 2011, millions 12% 350 Indirect + Induced 300 Indirect + Induced 10% Direct Direct 8% 250 200 6% 150 4% 100 2% 50 0% 0 manufacturing Travel & Communication manufacturing Travel & Communication Manufacturing Tourism Manufacturing Mining Education Financial Tourism Mining Education Financial services services of chemicals of chemicals Automotive Automotive services services World Travel & Tourism Council 16 Key findings: Regional Manufacturing Employment • Travel & Tourism directly sustains more jobs than the automotive Direct Employment in 2011 and chemicals manufacturing '000s industries combined across every 40,000 63 mn region of the world. 35,000 Travel & Tourism • Travel & Tourism employment in 30,000 Automotive manufacturing Europe - reaching 10 million in 25,000 2011 - exceeds auto 20,000 Manufacturing of chemicals manufacturing by a factor of 3. 15,000 • In Asia, there are 7 times as 10,000 many Travel & Tourism jobs as 5,000 auto manufacturing jobs and 5 times as many chemicals - Pacific Africa Americas Europe Middle manufacturing jobs. East Asia World Travel & Tourism Council 17 Key findings: Regional Employment in other sectors • In every region of the world, Direct Employment in 2011 Travel & Tourism directly '000s sustains more jobs than the 70,000 financial services, Travel & Tourism communications, and mining 60,000 industries. Financial services 50,000 Communications 40,000 Mining 30,000 20,000 10,000 - Pacific Africa Americas Europe Middle East World Travel & Tourism Council Asia 18 World GDP Growth • The Oxford Economics global World GDP Forecast by Industry industry model projects CAGR 2012-2022 Travel & Tourism direct 6% industry GDP to grow 4.2% 5% per annum (compound annual growth) over the next 4% decade. 3% • This is greater growth than 2% forecast for the automotive, 1% education, and mining sectors as well as the total 0% manufacturing Travel & Communication Total economy Manufacturing Tourism Mining Education Financial Construction services of chemicals global economy, which Automotive services Oxford Economics expects to grow 3.6% per annum through 2022. World Travel & Tourism Council 19 World Employment Growth • The Oxford Economics global World Employment Forecast by Industry CAGR 2012-2022 industry model projects 4% Travel & Tourism direct industry employment to grow 3% 1.9% per annum (compound annual growth) over the next 2% decade. 1% • This is greater growth than forecast for mining sector as 0% well as the total global manufacturing Travel & Communication Total economy Manufacturing Tourism Education Mining Construction Financial services of chemicals Automotive economy, which Oxford services -1% expects to grow 1.2% per annum through 2022. -2% -3% World Travel & Tourism Council 20 Trade Summary How does Travel & Tourism compare to other sectors? Sponsored by: World Travel & Tourism Council 21 Trade summary: Total Exports • Foreign visitor exports Travel & Tourism share of total exports (2011) represent a substantial share of exports around the Japan China world, forming an essential Brazil component of global trade. Germany S Korea • Tourism generated 10% of Russia Canada all UAE exports (including Mexico oil) and 15% of Turkey’s India Indonesia exports in 2011. UK Australia • In industrialised economies Italy such as the UK, Australia, Argentina US Italy, US, and France, France Tourism still generated more S Africa UAE than 5% of total exports last Turkey 49% --> year. Jamaica 0% 5% 10% 15% 20% World Travel & Tourism Council 22 Trade summary: Service Exports • Visitor receipts represent a substantial share of national Travel & Tourism share of service exports (2011) service exports around the Japan world, generating foreign India exchange and financial UK Brazil stability – especially for Germany emerging economies. Canada South • For example, more than half US China Average = of all service exports are Russia 26% generated by Travel & Australia Tourism in the UAE, Italy Argentina Jamaica, Turkey, South Indonesia Africa, Mexico, and France. France Mexico • Between 25% and 50% of South Turkey service exports are Jamaica generated by Travel & UAE Tourism in the US, China, 0% 20% 40% 60% 80% 100% Russia, Australia, Italy, Argentina, and Indonesia. World Travel & Tourism Council 23 Linkages Summary How does Travel & Tourism compare to other sectors? Sponsored by: World Travel & Tourism Council 24 Linkages: Travel & Tourism Outperforms the Economy • By analysing input-output data across Comparing T&T and total economy multipliers all 20 countries, we have identified Travel & Tourism the linkages between Travel & 4.5 Tourism and the rest of the economy. 4.0 • This identifies the ways in which the 3.5 T&T outperforms the economy average rest of the economy benefits from the 3.0 injection of Tourism dollars. 2.5 • The adjacent chart compares the 2.0 GDP multiplier for Tourism and the average of the entire economy. A 1.5 multiplier of 2 implies that for every 1.0 T&T underperforms against the new dollar a total of 2 dollars is economy average 0.5 generated including indirect and induced impacts. 0.0 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 • In 18 out of the 20 economies Total Economy analysed, a new dollar in Travel & Global average GDP multipliers Tourism generates more total economic output than the average Travel & Tourism: 3.2 new dollar in the economy. Total economy: 2.7 World Travel & Tourism Council 25 Linkages: Travel & Tourism Outperforms the Economy • Travel & Tourism also outperforms the majority of the key sectors we analysed in terms of generating GDP World Average GDP Multipliers Total GDP / Direct GDP across the entire economy. 6.0 • The industry multiplier measures the 5.0 impact across the entire economy as a share of the direct industry impact 4.0 alone. At 3.2, Travel & Tourism’s 3.0 broader impact per unit of direct GDP exceeds that of communications, 2.0 financial services, education, 1.0 agriculture, and mining. 0.0 manufacturing Travel & Communication Manufacture of Total economy Tourism Agriculture Mining Education Financial services • Only chemicals and auto Automotive chemicals services manufacturing have higher multipliers across the 20 countries analysed. World Travel & Tourism Council 26 Linkages: Key findings Performance against economy • In terms of employment generation, we found Travel & Tourism to also be potent. Output Jobs Argentina 1.1315942 1.0867687 Australia 1.3685288 1.5809815 • The adjacent table illustrates the strength Brazil 1.0388657 1.0006292 of a dollar of spending in Travel & Canada 1.712968 1.5050483 Tourism versus a dollar of spending in China 1.0829755 0.8902444 France 0.9280567 1.1316037 the average of the national economy. Germany 1.1464106 1.3758862 India 1.5561394 0.6787127 • As shown earlier, in 18 out of the 20 Indonesia 1.4448595 0.9398877 economies, a new dollar in Travel & Italy 1.0692845 1.5290552 Tourism generates more total economic Jamaica 1.5412745 1.1752168 Japan 1.1475533 1.4511417 output than the average across all other Korea 1.0928706 1.2838761 sectors. Mexico 1.1962775 1.5728657 Russia 2.0457252 1.4023303 • In terms of job creation, a dollar of South Africa 1.1191491 1.3325836 Turkey 1.2260842 1.0258898 spending in Travel & Tourism is more UAE 1.3516755 1.0042186 powerful than the average of the UK 1.0644809 1.2229058 economy in 17 out of 20 countries. The USA 0.9589748 1.053587 only countries where this is not the case Cross-country 1.0661999 1.3319932 are ones in which agriculture remains a Legend: significant employer (China, India, Greater than economy average 1.06 Indonesia). Within 10% below economy average 1 More than 10% below economy average 0.91 World Travel & Tourism Council 27 Linkages: Job creation • To illustrate this point further, we compared Travel & Tourism to Employment impact of $1m spending six other sectors of the economy Jobs to determine the total job impact 70 per $1 million in spending. 60 • This analysis calculates not only 50 direct industry jobs, but also 40 those generated through the 30 supply chain and incomes. 20 • Travel & Tourism is one of the 10 top two job creators with an average of 50 jobs generated 0 Chemicals Manufacture Education Mining Communications Financal Whole Economy Services Travel & Tourism Automobile per $1 million in spending across the 20 countries we analysed. • $1 million in Travel & Tourism generates twice as many jobs as $1 million financial services, communications, and auto manufacturing. World Travel & Tourism Council 28 Linkages: Households and the local economy • Industries can also be evaluated on the basis of how spending flows to Retained expenditure and income generation households and to other parts of the Income ($000) from economy. $1m spend 1,200 • The best sectors for economic Household gains Education development tend to be those that generate the most household income and 1,000 retain the maximum share of expenditure Financial Svcs within the local economy after accounting for imports. 800 Auto Mauf Travel & Tourism • For every $1 million in Travel & Tourism Communications 600 spending, $701,000 in income is generated. This exceeds the income Chemicals Agriculture proportions for auto, communications, 400 Mining chemicals, and mining. Local economy gains • In terms of money retained in the local 200 75% 80% 85% 90% 95% 100% economy, 91% of each dollar spent Share of expenditure retained remains, while just 9% is leaked out as imports. This is better than the mining, chemicals, and auto manufacturing (Average of 20 Countries Analysed) sectors. World Travel & Tourism Council 29 Data Sources & Methodology Sponsored by: World Travel & Tourism Council 30 Data sources and methodology: GDP and Employment • Main data sources for comparative sectors: • United Nations International Labour Organization • OECD STAN STructural ANalysis Database • Oxford Economics Global Industry Model • CEIC Data Manager • Statistical Institute of Jamaica • UAE National Accounts • Travel & Tourism GDP and employment figures are drawn from Oxford Economics analysis for WTTC using the Tourism Satellite Account framework. World Travel & Tourism Council 31 Data sources and methodology: Exports • Main data sources: • OECD STAN • World Trade Organization (WTO) • UN COMTRADE • IMFBOPA • Oxford Economics. • Total exports, total service exports and total goods/merchandise exports are sourced originally to national accounts and central bank balance of payments data. • Merchandise exports taken from OECD STAN where possible, and from UNCOMTRADE and WTO for Jamaica and UAE. • Service exports taken from IMFBOPA database for all countries where possible. • 2000 figures taken from above, 2011 estimated using 2010 shares of total and applied to totals for 2011. World Travel & Tourism Council 32 Data sources and methodology: Linkages • Main data sources: OECD, National Statistical Offices, Oxford Economics • Input-output tables for all countries were sourced from either the OECD or, when not available, National Statistical Offices. From the input-output tables, multiplier matrices were developed for each economy, detailing the flow of spending in an economy that occurs as a consequence of spending in a given industry. • For each of the comparator sectors, a spending shock of $1 million was simulated, with the resulting spending impacts in every industry in the economy recorded. • These spending outcomes were translated into gross value added (GVA) using the GVA/output ratios available in the input-output tables, and employment, using productivity level data developed from the GDP and employment figures derived elsewhere in the study. • Travel & Tourism multipliers are drawn from Oxford Economics / WTTC ongoing Tourism Satellite Account analysis. • Global and regional multipliers were calculated as the weighted average of all relevant nations, with weightings assigned according to sector GDP. World Travel & Tourism Council 33 About WTTC and Oxford Economics • The World Travel & Tourism Council (WTTC) • Oxford Economics is one of the world’s is the forum for business leaders in the leading providers of economic analysis, Travel & Tourism industry. With Chief forecasts and consulting advice. Founded in Executives of some one hundred of the 1981 as a joint venture with Oxford world's leading Travel & Tourism companies University’s business college, Oxford as its Members, WTTC has a unique Economics enjoys a reputation for high mandate and overview on all matters related quality, quantitative analysis and evidence- to Travel & Tourism. based advice. • WTTC works to raise awareness of Travel & • For this, its draws on its own staff of over 70 Tourism as one of the world's largest highly-experienced professional economists; industries, supporting 255 million jobs and a dedicated data analysis team; global generating 9 per cent of world GDP. modeling tools, and a range of partner institutions in Europe, the US and in the • WTTC advocates partnership between the United Nations Project Link. Oxford public and private sectors, delivering results Economics has offices in New York, that match the needs of economies, local Philadelphia, San Francisco, Chicago, and regional authorities and local London, Oxford, Belfast, Dubai, and communities with those of business. Singapore. World Travel & Tourism Council 34 About American Express American Express is a global services company, providing customers with access to products, insights and experiences that enrich lives and build business success. American Express Global Business Travel is a global industry leader in business travel and meetings management committed to helping businesses succeed through cost-effective program management, world-class customer service, and enhanced traveler productivity support worldwide. Through leading online, offline and on-the-go solutions, consulting services, business insights and research, supplier negotiation expertise, and meetings and events capabilities, innovative services are delivered to clients to maximize the return on their travel and meetings investments. American Express Corporate Payment Solutions provides the Corporate Card, Corporate Purchasing Solutions, and other expense management services to mid-size companies and large corporations worldwide. In the U.S., American Express is a leading issuer of commercial cards, serving more than 70% of the Fortune 500, as well as tens of thousands of mid-size companies. World Travel & Tourism Council 35
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