Island destinations are the top spots for travel and tourism investment. Credit: dorian2013 via Getty Images.

The World Travel and Tourism Council’s (WTTC) Travel and Tourism Economic Impact 2023 Global Trends Report forecasts a growth of $1tn in the global market as a result of investment.

This supports GlobalData’s analysis, which finds that the market size of the travel and tourism sector globally grew by 43% in 2021, reaching a value of $631bn.

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By 2022, industry investment had surged to $856bn, up a further 11.1% from the previous year. Although this was 22.5% short of 2019 levels, it was still 53% higher than in 2000.

Which regions have seen the biggest growth in travel and tourism?

In the Asia-Pacific region and Africa, 2022 investment was 161% higher than in the year 2000.

Europe and the Middle East have shown more restrained growth. In these regions, the Covid-19 pandemic has undone much of the significant growth achieved in the last two decades, according to WTTC.

The US led the top ten markets in terms of absolute investment in the sector in 2022, with $213bn.

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China trails with a $146bn investment in 2022, with Saudi Arabia rounding off the top three with a total investment of $42bn in the same year.

Island destinations were top spots for travel and tourism investment as a total percentage share of their economies in 2022. The US Virgin Islands led the way, channelling 35% of total economic investment into travel and tourism, followed closely by Antigua and Barbuda at 34%.

Private investment in new aircraft, hotels and car fleets is essential for boosting the sector’s capacity. Public investment complements this growth, and together the combined investments create a powerful synergy.

What is the WTTC’s forecast for global travel and tourism?

WTTC forecasts a robust 11.5% growth in investment in 2023, amounting to $955bn, with a return to pre-pandemic levels anticipated by 2025.

By 2033, WTTC forecasts a promising 6.1% average annual growth globally, with the strongest annualised growth rates projected to be in Asia-Pacific and the Caribbean.

However, it also notes that the global hike in interest rates creates challenges for future investment. With central banks increasing interest rates to combat rising inflation, the cost of borrowing and products increases.

Higher interest rates could present further risks to future investment. WTTC asserts that it is crucial that the public and private sectors work together to innovate to ensure the continual strengthening of this vital sector.

WTTC President and CEO Julia Simpson comments: “Investment in travel and tourism is not just a numbers game; it is the heartbeat of global connectivity and economic revival. Despite the setbacks from the pandemic, this growth is a promising sign of what’s to come.”