Istanbul, Turkiye– According to fdi intelligence, the global tourism industry has turned the clock back to 2019 before COVID created a massive hole in worldwide passenger travel, mostly born out of health safety concerns.
In 2023, UN Tourism tracked 1.3 billion global arrivals, up from 975 million a year earlier, near 2019 figures of 1.475 billion.
International tourism receipts show a similar trajectory, reaching over US$1.5 trillion in 2023, exceeding the US$1.47tn figure for 2019, Statista reports.
According to UN Tourism, international tourist arrivals in Q1 of 2024 reached 97 percent of pre-pandemic levels, which projected a promising outlook for 2024 and beyond.
FDI in travel is still in arrears
Still somewhat lagging is a recovery for foreign direct investment (FDI) in global tourism despite investors showing interest in certain fast-growing geographies, to the detriment of more mature markets. For the third year in a row, announced greenfield FDI in the tourism cluster didn’t exceed the US$11 billion mark in 2023, fdi intelligence stats show, far below the US$59bn recorded in 2019.
According to UN Tourism, following a peak in 2021, the flow of venture capital (VC) to the tourism industry in 2022 and 2023 stabilized in the wake of rising interest rates.
However, a new force is driving VC into the sector: Environmental sustainability, particularly funds towards technology-driven solutions for climate change mitigation adapted to the tourism sector.
Business travel spending
The 2024 GBTA Annual Global Report and Forecast of business travel spending and growth covering 72 countries and 44 industries, including analysis from 4,100 business travelers across five global regions, found that global spending is expected to reach US$1.48tn by the end of 2024 and projected to surpass US$2tn by 2028.
The report’s survey showed that 64 percent of business travelers have increased their travel spending compared to 2023, paying on average US$834 per person based on their last business trip.
Top travel and tourism (T&T) developments
According to a 2024 report by WEF, Europe and Asia-Pacific regions, in general, and high-income economies, in particular, continue to have the most favorable conditions for T&T development. Out of the top 30 TTDI (Travel and Tourism Development Index) scorers in 2024, 26 were high-income, 19 were based in Europe, seven were in Asia-Pacific, three were in the Americas and one was in the Middle East and North Africa (MENA).
Low to upper-middle-income economies accounted for 52 out of the 71 economies that have improved their TTDI scores since 2019, the WEF reported. Saudi Arabia recorded a +5.7 percent increase, jumping from 50th to 41st, while the UAE showed a +4.4 percent increase, climbing from 25th to 18th. They were the only high-income economies to rank among the top 10 most improved between 2019 and 2024.
The WEF also reported a 7.2 percent surge in ICT Readiness score for the sector reflecting the ongoing digitalization of T&T services driven by expanded global mobile network coverage and digital payment usage.