As already alluded to in the global context section above, the T&T sector’s significant contribution to global economic and social development makes its recovery and long-term growth paramount. In 2019, the sector’s direct, indirect and induced output accounted for about 10% of global GDP. Moreover, for many emerging economies, T&T is a major source of export revenue, foreign exchange earnings and investment. On average, out of the economies covered by the TTDI, T&T contributed 70% more towards the exports of middle-income economies than to the exports of high-income economies in 2019.¹⁰ Consequently, restoring T&T sector growth will be particularly vital for developing economies’ recovery. For instance, the World Bank forecasts that emerging markets and developing economies (EMDEs) will not return to pre-pandemic economic output trends until after 2023, with more than 80% of tourism-reliant EMDEs still below their 2019 economic output at the end of 2021.¹¹ Recent concerns about the slowdown in globalization and trade due to the impact of the pandemic and geopolitical tensions¹² further enforce how important T&T is for global connectivity.

It is also important to note that T&T is vital not only to overall economic performance but also to the livelihood of some of the populations and businesses most vulnerable to, and hardest hit by, the pandemic. This sector contributed to about 10% of global jobs in 2019,¹³ employs almost twice as many women as other sectors, has a large share of youth employment and is a major source of jobs for minorities, migrants, informal workers and low-skilled workers.¹⁴ Moreover, SMEs account for more than 80% of T&T businesses.¹⁵ Unsurprisingly, research has shown that T&T growth can support social progress and create opportunities and well-being for communities.¹⁶ Consequently, investing in T&T could not only mitigate the impact of the pandemic but also improve socioeconomic progress and resilience.

With the case for T&T’s recovery and development clear, it will be critical to focus on and invest in the factors and policies (beyond the critical need for vaccine distribution) that can help enable these goals, many of which are measured by the TTDI. World Economic Forum research shows that TTDI performance correlates with direct T&T GDP, international tourist arrivals and receipts.¹⁷

Figure 3: Travel and Tourism economic and enabling development landscape

Figure 3 can help us understand which economies are likely to be best positioned from a T&T recovery and resiliency point of view, and which may need to prioritize greater investment in T&T enabling factors. This is illustrated by comparing the TTDI scores to economic dependence on T&T. Low- and middle-income economies tend to score below the TTDI average, indicating a potential constraining factor for their economic recovery. In particular, economies in the bottom-right quadrant would gain the most by investing in the drivers of T&T development because they are more dependent on the sector for economic development. Such investment will help their economic recovery by enabling stronger tourism growth as well as supporting their overall economies to be more robust and resilient. On the other hand, while economies in the bottom left are less dependent on T&T, their below-average TTDI score may indicate that their conditions are leading to an underuse of the sector’s ability to drive development, weakening their economic potential – a resiliency issue in itself.

Higher TTDI scores for economies in the top two quadrants indicate that they are more mature markets and are best positioned for the sector’s recovery. Countries in the top-left quadrant are in a more optimal position from a resiliency point of view as they have favourable conditions for T&T operations but are also less reliant on it for their overall economic performance. However, that is not to say that T&T does not play an important role in their overall economic development, especially at the local level and for specific segments of the labour force and SMEs. Meanwhile, economies in the top-right quadrant, like those below them, have also been more vulnerable to the impact of the pandemic, especially given that analysis shows they are typically more reliant on the export of T&T services. These factors may limit their ability to recover economically from the pandemic, but they are also better positioned to generate tourism-led economic growth as international tourism returns. In general, for the most mature T&T countries such as those higher in the top quadrants, sector performance and resilience may be less about making major improvements in aspects of T&T development such as infrastructure and more about continuously calibrating their T&T strategies to adapt to changing demand dynamics, local needs and overall T&T trends.

Figure 4: TTDI 2021 pillar performance

Figure 4 shows in more detail what gaps remain to achieving improved T&T performance and development for various countries. High-income economies and countries in the Europe and Eurasia (Europe) and Asia-Pacific (APAC) regions tend to lead the overall index in results. Among the largest differentiators between index leaders and laggards are: the distribution and promotion of natural, cultural and non-leisure assets and activities; the availability of quality transport and tourist service infrastructure; the degree of international openness; and favourable factors such as (increasingly important) ICT readiness and health and hygiene. However, as shown in the Travel and Tourism Competitiveness Report 2019, because T&T growth is so dependent on factors such as infrastructure and health and hygiene, which if improved bring benefits to more than the tourism sector, sector leaders can play a valuable role in encouraging investment that benefits a country’s economy as a whole. This is especially true for developing economies that have innate natural and cultural assets around which to mobilize investment.¹⁸ The next section detailing key findings will use the TTDI results to discuss the T&T challenges and opportunities created over the past few years, as well as examining how various drivers of T&T development can be employed to bolster T&T recovery and build a more inclusive, sustainable and resilient T&T sector, thereby unleashing its potential for economic and social progress.