COMCEC Tourism Outlook 2017
2
2 The Importance of Tourism for Development
A strong tourism sector contributes in many ways to development and the economy. It makes
both direct contributions, by raising the national income and improving the balance of
payments, and indirect contributions, via its multiplier effect and by providing the basis for
connecting countries, through hard and soft infrastructure attributes that are also critical for a
country’s general economic competitiveness, international trade and foreign direct investment.
Over the past decades, many new destinations have emerged, challenging the traditional ones
in Europe and North America. Formany developing countries, tourism is one of themain sources
of foreign exchange income and the number one export category, creating much needed
employment and opportunities for development. The main positive economic impacts of
tourism relate to foreign exchange earnings, contributions to government revenues, generation
of employment and investment opportunities. Local recruitment and business opportunities in
tourism help reduce rural-urban migration. While fostering gender equality, entry level jobs in
tourism require less skilled workforce and this also enhances recruitment opportunities among
younger generations.
Based on the information from countries with data available, the World Travel & Tourism
Council (WTTC) estimated that travel & tourism’s contribution directly to worldwide gross
domestic product (GDP) was 3.1 % in 2016 and is expected to rise by 3.5% in 2017. The
forecasted growth of tourism’s contribution to GDP is around 3.9% on the average for the next
ten years. This is much faster than the growth in global economy which was around 2.5% in
2016. With direct and indirect effects of more than 185 supply-side economic activities that have
significant connections to tourism, its contribution to GDP is calculated as 10.2%, a total of
US$7.6 trillion, and is expected to grow by 3.6 to US$7.9 trillion in 2017. It is also estimated that
travel and tourism sector have attracted capital investment of US$807 billion in 2016 (WTTC,
2017a).
Tourism provided 109 million direct (3.6% of total employment) and 183 million indirect and
induced jobs with a total of 292 million (10% of total employment) jobs in 2016 and direct
contribution to employment is expected to rise by 2.1% in 2017. Since tourism affects
transportation, hotels and lodging, food & beverage, cultural and entertainment industries,
banking & finance, promotion and publicity services; tourism’s contribution to employment
tends to be much higher. In 2016, nearly 292 million jobs were supported in tourism related
industries (WTTC, 2017a). Tourism’s contribution is estimated as 9.6% of the overall number of
jobs or one in 10 jobs globally (UNWTO, 2017a). According to the WTTC, travel & tourism will
support 382 million jobs which indicates 11.1% of total employment by 2027 (WTTC, 2017a).