There is no doubt that the travel and tourism industry plays a large part in the global economies, but as economies stutter during times of slowdown, the flowdown affect can have serious implications on local businesses. While the global economic situation remains difficult due to the continuing eurozone debt crisis and threat of a return to recession in the United States, it is expected that while travel & turism growth will be lower than expected, it will be maintained.
Global financial conditions deteriorated sharply in the last q2 quarters of 2011 and global stock markets are currently well off their highs, spooked by the eurozone sovereign debt crisis and the downgrade of the USA’s AAA credit rating, such developments could have serious negative effects on growth. However, if trends in equity markets represent a wider reassessment of growth prospects, this will also impact on business planning, investment and employment.
Weak economic conditions and lowering expectations for short-term tourism growth have led to downgrades to the forecast growth in the travel and tourism industry’s direct contribution to GDP across almost all regions of the world. Looking at a regional level, it is not surprising to see that the largest downward revision is in the Middle East, where growth in 2012 is now expected to be negative and reflects the impact of the ‘Arab Spring’ on tourism in the region in terms of lost business and ongoing negative perceptions of safety, security, and concerns regarding the political stability. This, in turn, has propped up the weak growth forecast for Europe, as a side displacement caused by the uprisings.
A report by the Worlds Travel and Tourism Council (WTTC) shows a sustained level of growth in 2012 at about 3.3%. Emerging markets also face challenges due to weak global demand. Recent Data USA GDP growth is now forecast at less than 2% in 2012.
The projected GDP growth of economies in 2012 is for USA 1.8%, EU 0.2%, Japan 1.5%, China 8%, India 6.9%, Devloping Asia 5%, Latin America 3.6%, Middle East 4%, Africa 4.8%, Central & Eastern Europe 2.5%, Russia 4.2%
Global growth is projected to grow at 3.5 percent in 2012. The greatest challenge for the global economy in this slow growth environment is to raise productivity without losing job opportunities for the millions who are looking for reasonably paid jobs to support their living standards. Despite the downgrade to short-term economic and industry forecasts, the longer-term prospects for travel and tourism remain very positive, and continue to be boosted by strong growth and rising prosperity in emerging markets.
The tourism industry is predicted to generate an extra 69 million net jobs by 2021, including direct, indirect and induced employment. This will contribute to the much desired transition of economies, and reduce poverty in developing economies.
Almost 4 out of 5 of these jobs are expected to be in Asia, Latin America, the Middle East and Africa.