World Tourism Industry and Economy
Globally, travel and tourism
UNWTO
United Nations World Tourism Organization
 The World Tourism Organization
(UNWTO) is the United Nations agency
responsible for the promotion of responsible,
sustainable and universally accessible
tourism. It was established in 1974 and is
based in Madrid.
 As the leading international organization in
the field of tourism, UNWTO promotes
tourism as a driver of economic growth,
inclusive development and environmental
sustainability and offers leadership and
support to the sector in advancing
knowledge and tourism policies worldwide.
 UNWTO encourages the implementation of
the Global Code of Ethics for Tourism, to
maximize tourism’s socio-economic
contribution while minimizing its possible
negative impacts, and is committed to
promoting tourism as an instrument in
achieving the Sustainable Development
Goals (SDGs), geared towards reducing
poverty and fostering sustainable
development worldwide.
 UNWTO generates market knowledge,
promotes competitive and sustainable
tourism policies and instruments, fosters
tourism education and training, and works to
make tourism an effective tool for
development through technical assistance
projects in over 100 countries around the
world.
 UNWTO’s membership includes 159
Member States, 6 Associate Members and
over 500 Affiliate Members representing the
private sector, educational institutions,
tourism associations and local tourism
authorities.
GLOBAL TOURISIM INDUSTRY
STATISTICS
Tourism is defined as when people travel and stay
in place outside of their usual environment for less
than one consecutive year for leisure, business,
health or other reasons.
directly contributed approximately 2.69 trillion U.S
Dollars to the GDP (Global Domestic Product) in
the year 2019
Europe
 The region with the highest hotel occupancy
rate worldwide in 2019
Dubai International Airport (DXB)
 Leading airport for international air
passenger traffic by number of passengers
Walts Disney World, USA
 Most visited amusement and theme park
worldwide
Leading online travel agency worldwide by
revenue
 Booking.com
TRAVEL AND TOURISM: DIRECT
CONTRIBUTION TO EMPLOYMENT
WORLDWIDE BY COUNTRY
China
 China = 29 million travel and tourist
industry employees
India
 India = 27.5 million travel and tourism
industry employees
INTERNATIONAL TOURIST NUMBERS
COULD FALL 60-80% IN 2020, UNWTO
REPORTS
The COVID-19 pandemic has caused a 22% fall in
international tourist arrivals during the first quarter
of 2020, the latest data from the World Tourism
Organization (UNWTO) shows. According to the
United Nations specialized agency, the crisis could
lead to an annual decline of between 60% and 80%
when compared with 2019 figures. This places
millions of livelihoods at risk and threatens to roll
back progress made in advancing the Sustainable
Development Goals (SDGs)
WORLD TOURISM INDUSTRY AND
ECONOMY
 Tourism is a significant economic driver the
world over. However, not all economic
impacts of tourism are positive. In order to
ensure that the economic impacts of tourism
are maximized, careful management of the
tourism industry is required.
 The positive economic impacts of tourism
are often not as significant as
anticipated. Furthermore, tourism activity
tends to bring with it unwanted and often
unexpected negative economic impacts of
tourism.
Positive Economic Impacts of Tourism
Most destinations choose to invest their time and
money into tourism because of the positive
economic impacts that they hope to achieve. There
are a range of possible positive economic impacts.
Foreign exchange earnings
One of the biggest benefits of tourism is the ability
to make money through foreign exchange earnings.
Tourism expenditures generate income to the host
economy. The money that the country makes from
tourism can then be reinvested in the
economy. How a destination manages their finances
differs around the world; some destinations may
spend this money on growing their tourism industry
further, some may spend this money on public
services such as education or healthcare and some
destinations suffer extreme corruption so nobody
really knows where the money ends up!
Contribution to government revenues
Tourism can help to raise money that it then
invested elsewhere by the Government. There are
two main ways that this money is accumulated.
- Direct contributions are generated by taxes on
incomes from tourism employment and tourism
businesses and things such as departure taxes.
- Indirect contributions come from goods and
services supplied to tourists which are not directly
related to the tourism industry.
Employment generation
The rapid expansion of international tourism has led
to significant employment creation. From hotel
managers to theme park operatives to cleaners,
tourism creates many employment
opportunities. Tourism supports some 7% of the
world’s workers.
There are two types of employment in the tourism
industry: direct and indirect.
- Direct employment includes jobs that are
immediately associated with the tourism
industry. This might include hotel staff, restaurant
staff or taxi drivers, to name a few.
- Indirect employment includes jobs which are not
technically based in the tourism industry, but are
related to the tourism industry. Take a fisherman,
for example. He does not have any contact of
dealings with tourists. BUT he does sell his fish to
the hotel which serves tourists. So he is indirectly
employed by the tourism industry, because without
the tourists he would not be supplying the fish to the
hotel.
It is because of these indirect relationships, that it is
very difficult to accurately measure the economic
value of tourism.
Contribution to local economies
 All of the money raised, whether through
formal or informal means, has the potential
to contribute to the local economy.
 If sustainable tourism is demonstrated,
money will be directed to areas that will
benefit the local community most. There
may be pro-poor tourism initiatives (tourism
which is intended to help the poor)
or volunteer tourism projects. The
government may reinvest money towards
public services and money earned by
tourism employees will be spent in the local
community. This is known as the multiplier
effect.
  The multiplier effect relates to spending in
one place creating economic benefits
elsewhere. Tourism can do wonders for a
destination in areas that may seem to be
completely unrelated to tourism, but which
are actually connected somewhere in the
economic system.
Development of the Private Sector
The private sector has continuously developed
within the tourism industry and owning a business
within the private sector can be extremely
profitable; making this a positive economic impact
of tourism.
NEGATIVE ECONOMIC IMPACTS OF
TOURISM
There are many hidden costs to tourism, which can
have unfavourable economic effects on the host
community. Whilst such negative impacts are well
documented in the tourism literature, many tourists
are unaware of the negative effects that their actions
may cause. Likewise, many destinations who are
inexperienced or uneducated in tourism and
economics may not be aware of the problems that
can occur if tourism is not management properly.
Leakage
Economic leakage in tourism is when money spent
does not remain in the country but ends up
elsewhere; therefore limiting the economic benefits
of tourism to the host destination.
The biggest culprits of economic leakage are
multinational and internationally-owned
corporations, all-inclusive holidays and enclave
tourism.
Infrastructure cost
Another negative economic impact of tourism is the
cost of infrastructure. Tourism development can
cost the local government and local taxpayers a
great deal of money.
Tourism may require the government to improve the
airport, roads and other infrastructure, which are
costly.
Increase in prices
Increasing demand for basic services and goods
from tourists will often cause price hikes that
negatively impact local residents whose income
does not increase proportionately.
Tourism development and the related rise in real
estate demand may dramatically increase building
costs and land values. This often means that local
people will be forced to move away from the area
that tourism is located, known as gentrification.
Economic dependence of the local community on
tourism
 Many countries run the risk of becoming too
dependent on tourism. The country sees $
signs and places all of its efforts in
tourism. Whilst this can work out well, it is
also risky business.
 If for some reason tourism begins to lack in
a destination, then it is important that the
destination has alternative methods of
making money. If they don’t, then they run
the risk of being in severe financial
difficulty if there is a decline in their tourism
industry.
Foreign Ownership and Management
 As enterprise in the developed world
becomes increasingly expensive, many
businesses choose to go abroad. Whilst this
may save the business money, it is usually
not so beneficial for the economy of the host
destination.
 Foreign companies often bring with them
their own staff, thus limiting the economic
impact of increased employment. They will
usually also export a large proportion of
their income to the country where they are
based.
Global Tourism Industry The other factor that will significantly impact the
global tourism industry in 2020 and, presumably,
 Tourism Industry is a huge industry unlike
years to come, is the current coronavirus (COVID-
with other industries, there is not one clear
19) pandemic. As countries are implementing
product. It incorporates many industries,
severe travel restrictions to curb the spread of the
including lodging, transport, attractions,
disease, national and international tourism is
travel companies, and more. In its broadest
coming to a drastic halt. It is estimated that global
sense, tourism is defined as when people
revenue for the travel and tourism industry will drop
travel and stay in places outside of their
by 17 percent in 2020, with Asia forecast to see the
usual environment for less than one
gravest overall decrease in revenue, as well as the
consecutive year for leisure, business,
highest employment loss in the entire industry.
health, or other reasons. Globally, travel and
While the long-term economic damage caused by
tourism directly contributed approximately
the COVID-19 pandemic cannot fully be assessed
2.9 trillion U.S. dollars to GDP in 2019.
yet, the standstill of public life is already affecting
not only tourism but also a long list of other
 Leisure and business tourism have become
industries such as the restaurant business, retail, and
increasingly common all over the world.
the event industry.
One of the primary beneficiaries of this
increase in travel is the hotel industry. Key
performance indicators have seen year-over-
UNWTO- Number of international tourist arrivals
year growth over the past decade due to an
worldwide ( in millions )
influx to tourist across the globe.
Meanwhile, another industry that is profiting
from people’s penchant for travel is the
airline industry. In 2018, passenger air travel
comprised of over 50% of international
inbound tourism, which translated to a
revenue of around 812 billion U.S dollars
for commercial airlines

 One major trend that travel agencies and the

tourism industry will have to adapt to in the
future is the increased global interest in eco-
friendly travel. Tourism is increasingly
shown to be a significant contributor to
climate change. As a result, a growing
number of tourists have begun recognizing
the negative impacts their trips can have on
affected regions. This has led to more people
advocating for green travel choices. One
such option is staying in eco-friendly or
green accommodations – a business model
that has helped companies like Airbnb
become more profitable than ever. The
accommodation rental website, which allows
hosts to rent out their private residences,
reported over 164.3 million guest arrivals
worldwide in 2018.