Emerging Tourism Markets – The Coming Economic Boom

Back in the 1970’s, the futurist Herman Kahn wrote a countercultural book in the middle of
an economic downturn, rightly predicting amidst great scepticism, an age of growth and
prosperity. He called it “The Coming Economic Boom”. Today I want to take a leaf out of Mr
Kahn´s book, during another period of global economic uncertainty and talk about the
coming economic boom in Emerging Tourism Markets. I want to cover 3 issues:

o The numbers - where I am very optimistic, despite what Mrs Thatcher would
have called the “wobbly” short term situation.
o The geopolitics and the emergence of “Quadruple Bottom Line Sustainability”.
o The role of UNWTO in helping the industry steer the right course.

• The first and foremost number is 1.6 billion.

o Yes it is the projected number of international travellers by 2020. Almost twice
as much as last year.
o But more significantly it is the number of Chinese domestic travellers today
o Imagine what that means as the middle classes grow and well planned
socialist market economy liberalising strategies systematically promote
inbound and outbound travel.
o Imagine what that could mean in terms of travel exports for receiving
countries. Or in moderating terms of imports on the strong Yuan.
o And consider if that 1.6 billion was also to almost double by 2020.
o What impact on the current outbound China market – which today at about 35
million is the fourth largest inbound flow? 5 times? 10? 20? These arrival
numbers will inject hundreds of millions of Euros into the economies of the
world’s poorest countries. Distributing them where they are needed as tourist
move around the country. Tourism is the best foreign direct investment
system ever invented.
o And to China add India on a smaller but equally mega scale. Then Indonesia.
The Middle East with super airport hubs and dynamically expanding carriers.
Eastern Europe with significant EU funding capacity. The oil rich “Stahns”.
Not to ignore the pent up demand in Latin American & African markets as well
as the SIDS where the awakening will be slower & less significant from a
market perspective but highly relevant from a geopolitical one.

• The second number is 8 %, which is the average growth rate of emerging and LCD
markets over the past decade. Some such as China India & South Africa for example
have routinely exceeded that level; others have grown at a steady average 6%.

• Significantly, when taken as a whole these poorer markets have been growing at
twice the rate of the OECD countries. And that is very significant; dropping the
market share over the past decade of North America and Europe by some 10% with
the majority shifting to Asia. And doubling the African component. There is no sign
that this trend will radically change.

Professor Geoffrey Lipman Assistant Secretary General UNWTO 
UK Tourism Society Annual Meeting – Keynote. June 20th 2008 
UNWTO – Committed to Tourism, Travel and the Millennium Development Goals. 
 Emerging Tourism Markets – The Coming Economic Boom

• The third and final number is 70% - which is the kind of level of economic impact
that tourism plays in the export services of the world`s poorest countries. It´s their
one common services export. And while it’s a much smaller percentage in the great
emerging economies it is still a very significant and growing sector.

And this leads me neatly to the geopolitics and the sweeping global issues that are inevitably
propelling these poor markets into a new paradigm, where the world will have to shoulder its
responsibilities to adequately and sustainably finance and deliver on the development
promises. And where tourism can and must play an increasingly pivotal role.

• To put this into context, globalization, urban drift, 24 on 7 connectivity/ interoperability

and mega disasters are exposing the previously unexposable – particularly
civilization level confrontation, the poverty gap and the climate reality. And at the
same time the international community has mobilised to deal with it through mega
summits on Environment, Poverty, Debt, Trade & now Climate.
• There are 3 universal consequences
o There will be massive multi trillion sums earmarked for poor countries Aid to
Trade: MDG support and last but not least climate adaptation, mitigation,
clean technology use & financing/transfer for poorer states. And the reality is
that the groupings of have not states, together with the fast growing emerging
markets know that they can leverage this issue in the trade and climate talks.
o Tourism will be increasingly recognized as a key sector in national poverty
reduction strategies and in all development financing.
o The concept of public-private-partnerships will increasingly underpin all
framework activity from the national level down to the local. Corporate Social
Responsibility will be a market leading commitment from the industry & will be
incorporated into major debt restructuring and development profiling activities.

And herein lies the coming boom potential

• If these funds are available and governance programs are in place to deploy
the money to African and other poor countries – for carbon reduction,
infrastructure, product/ brand reframing and human resource training.
• Ifclimate response is immediate but balanced. If it reaffirms the right of the
emerging and underdeveloped to the same opportunities that the developed
have realized - albeit with a more responsible carbon mindset.
• Ifall tourism stakeholders with a sense of responsibility put climate into the
core sustainability mix – so that “triple bottom line” balancing of social,
economic and environmental dimensions has a fully integrated climate
necessity. This is the new quadruple bottom line sustainability.
• If there is no adverse unfair focus on communications links to developing
markets. This scenario means more flights to poor countries with tourism as a
development lifeline and mitigation, where necessary in more crowded
industrialized markets. And it means an end to opportunistic taxes supported by
enthusiastic professional campaigners – which do nothing to reduce the real
climate problems.

Professor Geoffrey Lipman Assistant Secretary General UNWTO 
UK Tourism Society Annual Meeting – Keynote. June 20th 2008 
UNWTO – Committed to Tourism, Travel and the Millennium Development Goals. 
 Emerging Tourism Markets – The Coming Economic Boom

It is fair to assume that this growth scenario will suffer from the economic downturn
and more than fair to say that massive prolonged increases in fuel price, with few
short term options (at least for airlines), as well as other “mega crises” will have a
fundamental depressant effect. But the numbers of potential travellers are so huge
and the logic of targeting tourism for development so pervasive that the long term
growth prospects will remain substantial by any measure.

Finally, I´m coming back to the potential for UNWTO to work with governments and the
industry, to help chart this positive future. A future incidentally that will benefit both
developing and developed markets – trade being a two way street and at an industry level so
much of the global infrastructure and service is provided by industrialised world operators.

5 years ago I couldn´t have identified what I can easily do today – before UNWTO becoming
the UN tourism Agency; in a world where mega disasters – man made and natural - and are
proliferating and the UN is increasingly the default response system.

• UNWTO has a seat at the top UN table and the decisive and central role in
representing the interests of the sector – be it pandemics: Tsunamis: earthquakes,
floods or terrorism.
• We have a proud track record in areas like statistics, market and brand support, crisis
response, local level poverty reduction, climate solutions and sustainable
development.
• Our Global Code of Ethics: Tourism Satellite Account: Davos Declaration Process,
Microsoft Partnered etourism solutions and ST-EP development programs are pillars
for a strong, responsible, carbon reduced, tourism growth
• We have 153 member States with others in the pipeline, a global Affiliate
membership linking thousands of private sector, destination, academic and ngo
stakeholders...and a unique networking framework for public-private partnership.

We are very committed to the membership of the UK and to helping your industry advance in
the complex international tourism development arena. We know emerging markets well. We
work with them at the highest ministerial and the fundamental grass roots levels. They
represent a massive part of our collective future.

And they are the key to the coming economic, increasingly climate neutral, boom.

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Professor Geoffrey Lipman Assistant Secretary General UNWTO 
UK Tourism Society Annual Meeting – Keynote. June 20th 2008 
UNWTO – Committed to Tourism, Travel and the Millennium Development Goals.