The Importance of Tourism in Our Livelihoods


July 7, 2015

Ahhh, finally, that time of the year when most people will sit back and relax, take some time off to enjoy quality time with family and friends… Indeed, summertime in the Northern Hemisphere is synonym with vacation time, peak season or sheer craziness, depending on your point of view (and depending if you actually work front-line in the travel & hospitality industry). It is estimated that during Q3 alone, or the three months comprised of July, August and September, most businesses depending on tourism will generate about 60% of their annual sales. This is particularly true for seasonal businesses like water parks of golf courses in areas with short summers, just like ski resorts have limited operational time depending on snowfall every winter.

“Tourism: the commercial organization and operation of vacations and visits to places of interest.”

In North America we tend to view tourism as a privilege for a chosen few, often under-estimating its impact on our livelihoods. Yet tourism doesn’t necessary mean traveling international – in fact, Americans are amongst the keenest for staycations, vacations near home, or in other words domestic travel to nearby states. Still, 57% of Americans don’t use up all of their vacation time, which leaves a lot of money on the table for the travel and hospitality industry.

Nevertheless, travel is considered big business in the US with the Brand USA initiative contributing to the country’s goal of becoming the #1 destination worldwide for international visitors by 2020, with a target of 100 million visitors by that year. But tourism is even more important on a worldwide scale, providing 1 in 10 jobs across the globe!

Travel & Tourism as % of GDP

Last month, I had the privilege of speaking at the North American marketing retreat with the folks of Aruba Tourism. I discovered that this gem of the Caribbean was not only a beautiful island… but also the most dependent place in the world in terms of the industry’s impact on their national GDP (gross domestic product). While in Canada and the US the tourism industry will represent about 2.5% of GDP, this figure can reach up to 80% of total exports in Aruba, Aguilla, Antigua and Barbados, British Virgin Islands and other areas highly dependent on tourism year-round, not just during summertime. Tourism means big business, as we can see it in this nifty infographic released by the WTTC earlier in 2015.

How Money Travels. Source: WTTC 2015

How Money Travels. Source: WTTC 2015

The topic for my speech with the members of Aruba Tourism was the state of online travel, including distribution challenges through online travel agencies. This had me thinking about the increasingly important role of OTA in particular in a destination where there is so much at stakes when it comes to tourism dollars! Seeing how Expedia and Booking now have lost the parity war in Europe, it will be interesting to see the ripple effects on this side of the Atlantic Ocean in coming months…

Sustainability

Another element that got me thinking was reading about how the new Mayor of Barcelona recently announced wanting to cap tourists to the city. She told the Daily Mail “‘We have to put a moratorium in place regarding new hotels and tourist apartments, carry out a census and create a preventative policy before things get out of hand”, referring to events that happened in the Old City of Barcelona, a part of town particularly popular with young tourists.

Cruise ships in Venice

Large cruise ships in Venice

The idea is to avoid becoming another Venice, another city known to struggle with heavy influx of tourists, specially with larger cruise ships. Many destinations have a hard time with this duality between economic benefits from this industry versus the longer-term harm caused to the environment, not to mention deterioration in the quality of life. Similar scenarios either took place or are being discussed at the Machu Pichu in Peru, the great pyramids in Cairo or even the Grand Canyon, Arizona.

This debate has been going for years, and it reminded me of discussions we had while in Barcelona attending Responsible Tourism in Destinations, two years ago. Read more on this: Can Social Networks Contribute to Responsible Tourism.

Extreme events

But the importance of tourism can also be seen simply by following the news and current affairs on TV, the radio or our social media newsfeeds. After the recent killings of tourists in Tunisia on a popular beach in Sousse, a huge impact was reported from hotels and resorts losing reservations and the local economy being shattered in the aftermath. This came a few months after similar events at Bardo Museum, in Tunis. A scenario witnessed in Egypt on various occasions, in a Sydney café Australia last year, not to mention the killings of French caricaturists from Charlie Hebdo earlier this year and the events from 9/11, in New York City, back in 2001.

Confronted with these events, there is always a large amount of media coverage and fear factor that create negative impressions towards a destination or area. The same thing happens with modes of transportation – just think of airplane crashes or disappearances like with Malaysia Airlines in 2014 or the recent suicidal co-pilot from Germanwings. Fortunately, though, it seems like we show great resilience in front of these events. We understand that while dramatic events will happen, it should not take away from our right to travel, embracing the opportunity to meet locals and their cultures, in a mutual respect built on a long-term vision.

Will people cease to travel to Greece this summer because of its political and economic turmoil? I doubt it. There may be a short-term effect, just like some people worried about Scotland becoming independent earlier in 2015. But in the end, tourism will resume, and perhaps come back even in stronger numbers than previously experienced.

Outlook for 2015 and beyond

In its most recent outlook report, the World Travel and Tourism Council (WTTC) predicts that growth in tourism will continue to be stronger than the wider economy, with a +3.7% growth rate in 2015. There are various reasons for this optimism, but here are a few worth highlighting:

  • Low cost of oil is good news for importing countries, or countries like Canada and Mexico which rely on border US states for “rubber tire” markets, close enough to drive to within 4 hours driving range.
  • Domestic Travel & Tourism spending growth is forecast to rise from 3.1% in 2014 to 3.7% in 2015.
  • World visitor exports growth is expected to be steady at +4% in 2016 and beyond.
  • China will overtake the United States in terms of Travel & Tourism investment – but remain second behind the US in terms of Travel & Tourism total GDP, direct GDP, domestic spending and visitor exports.

The tourism industry continues to employ many direct and indirect workers and companies across the globe and in North America. It’s important to highlight its impact, not just during peak summer season but year-round, since there are many people’s livelihoods that depend on it.

So tell me, will you travel this summer?

Frederic Gonzalo
Frederic Gonzalo

Senior marketing and communications expert & speaker with more than 20 years of expertise in the travel and hospitality industry. Consulting since early 2012, I provide strategic planning, social media & mobile development counseling to small and medium businesses alike. Reach me at frederic@gonzomarketing.biz

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