Global Tourism Update 2020 Dr Grant Kleeman

PEOPLE AND ECONOMIC ACTIVITY Global Tourism Update 2020 Dr Grant Kleeman The COVID-19 outbreak brought the world to a standstill. The global tourism industry was amongst the most severely affected of its economic activities. Around the world, airlines grounded thousands of aircraft, hundreds of cruise ships lay idle at anchor, hotels closed, and millions of tourism employees were stood down as governments implemented travel bans, closed borders and instituted quarantine measures. More broadly, the pandemic had an unparalleled and unforeseen impact on our lives, our economies, our societies and our livelihoods. There is a very real risk that the world is on the verge of a deep and prolonged recession – a decline so pronounced that it could eclipse the Great Depression of the 1930s. It may take years for the global tourism industry to recover. Global tourism before the onset of the pandemic In 2019, before the COVID–19 pandemic lay waste to the industry, global tourism reached a level of activity never before experienced. More than 1,460 million people travelled internationally in the calendar year (see figure 3) an increase of a healthy 3.8 per cent increase over 2018 but just below the decade long average of 4.2 per cent annual growth (see Figure 4). Europe continues to be the most popular destination (51%) followed by Asia–Pacific (25%). (See figure 5). The rapid rate of growth in international tourist arrivals evident since World War II illustrates just how important Figure 1: April 2020. A worker sanitizes Venice’s St. Mark the industry is to the global economy. In the years square during the national lockdown for Covid-19 following the war, just 25 million people travelled pandemic. Typically packed with tourists the square is internationally each year and most of these journeys eerily empty. involved cross-border movements within Europe and North America. By 1980, the number of international Why does it matter? tourists had increased to 202 million driven by declines in the real cost of air travel and rising standards of living. Global tourism is big business. According to the World By 2000, 699 million people travelled internationally. Tourism Organisation (WTO), the industry accounts for some 10 per cent of global GDP (US$8.9 trillion) Tourism receipts exceeded US$1,507 billion in 2019. and one in 10 jobs (330 million workers). More than Again, Europe dominates with 39 per cent of the 100million of these employees, and some $2.7 trillion in revenue generated by the industry, followed by Asia GDP, are at immediate risk because of the current crisis. and the Pacific (30%) (See Figure 6). Tourism economic 68 Geography Bulletin Vol 52, No 3 2020 GLOBAL TOURISM UPDATE 2020 importance by highlighted by the observation that it is the world’s third most valuable export after fuels and chemicals. (See Figure 8). Africa is the most tourism- dependent region. The Asia–Pacific region is the least dependent (See Figure 9). Figure 5: International tourism arrivals, 2018 (% share) Figure 2: Grounded Qantas aircraft Figure 6: International tourism receipts, 1995–2018 Figure 3: This line graph illustrates the growth of international visitor arrivals 1995–2019. Figure 4: International tourist arrivals, annual percentage change, 2008–2019 Figure 7: International tourism receipts, 2018 (% share) Geography Bulletin Vol 52, No 3 2020 69 GLOBAL TOURISM UPDATE 2020 Figure 8: Tourism is the world’s third-largest export category (US$ Billion), 2018 Figure 11: Mode of transport, 2018 (% share) A key feature of global tourism is its increasing product diversity and specialisation. The degree of specialisation, expressed in terms of revenue, is shown in Figure 12. Cultural tourism continues to be the largest sector, followed by culinary tourism, ecotourism and wellness tourism. Figure 9: International tourism as a percentage of total exports by region, 2018 Figures 10 and 11 highlight the key features of global tourism in 2018. Figure 10 shows the purpose of travel. Travel for leisure, recreation and holidays dominate followed by visiting friends and relatives and religion (27%). The principal mode of travel is air (58%) followed by road (37%). (See Figure 11). Figure 12: Types of tourism Figures are included in the PPT that supports this Edition. Figure 10: Purpose of visit, 2018 (% share) 70 Geography Bulletin Vol 52, No 3 2020 GLOBAL TOURISM UPDATE 2020 health, education and transport. The lifestyle aspirations of the middle class are central to the tourism industry’s future. One consequence of the growth of the global middle class has been a surge in the number of Chinese tourists. In 2019, almost 220 million Chinese travelled internationally and accounted for one-fifth of international tourism spending, or $277 billion. By way of contrast, tourists from the United States spent $144 billion. Before the onset of the pandemic, the WTO projected that the number of Chinese tourists would reach Figure 13: Young Chinese tourists in London. The rapidly 400 million by 2030 (that’s nearly a quarter of all growing Chinese middle class is a major driver in the international travellers). Of the increase in total growth of global tourism international movements between 2019 and 2030 (from 1.3 billion to 1.8 billion) almost half are projected Accounting for the growth in global tourism to originate in China. Much of the growth in global tourism can be accounted Even at 400 million, there is still potential for further for by the decline in the real cost of travel (driven largely growth. Significantly, China’s outbound tourists developments in aviation technologies, especially the represent less than 28 per cent of the country’s introduction of high capacity aircraft beginning with the total population. This suggests there exists a huge Boeing 747 in 1969) and the rise of a global middle class potential to grow the number of Chinese engaged in with enough discretionary income to engage in travel. international tourism. In terms of the latter, the world’s middle class continues to grow rapidly. By 2020, half the world’s population were part of the middle class or lived in wealthy households. Specifically, out of a total of 7.6 billion people in the world, 3.6 billion now belong to the middle class. This is a significant figure, especially when you consider that only 10 years ago the number of people making up the middle class was just half that (around 1.8 billion). After reaching the first 1.0 billion at the end of the 1980s, the middle class took more than 20 years to add another 1.0 billion. It took just eight years to add the last 1.6 billion. Looking ahead, the growth of the middle class shows no signs of slowing. Indeed, the latest estimates place the Figure 14: Venice crowds pre-pandemic. The iconic total population of the middle class at around 5.2 billion Italian city is in danger of depopulation due to the by 2030 (around 1.6 billion more than today), which will crowing and high cost of living represent some two-thirds of the world’s population. Since 2009, China has been responsible for the entry of The impacts of growth around 700 million people into the ranks of the global The growth in global tourism is not without its middle class: 40 per cent of all new entrants. Furthermore, consequences. Before the onset of COVID–19, taking China and India together, the two countries overcrowding was the most pressing issue facing the account for around 60 per cent of the new middle class industry as the surge in visitor numbers alienated (some 1.0 billion people). residents of popular destinations, overwhelmed local So why does this matter? The purchasing power of the infrastructure and degraded the environment. middle class is projected to increase from $35 trillion in Take Venice for example, one of the most visited places 2018 to $64 trillion in 2030. Households entering the on earth. Before the onset of COVID–19, the greatest middle-class increase the demand for both consumer tourism-related challenge facing the iconic Italian city durables and services including tourism, entertainment, was how to cope with the rapidly growing number of Geography Bulletin Vol 52, No 3 2020 71 GLOBAL TOURISM UPDATE 2020 tourists crowding into its squares, canals and narrow Activists argue that the pandemic gives Venice the laneways. Today, the city is largely deserted. Travel bans opportunity to rethink mass tourism and try to create and lockdowns have resulted in the collapse of both a new type of sustainable visitor experience for the international and domestic travel. fragile city. They want to transition away from a focus on designer shops and luxury goods to goods made in Prior to the pandemic, as many as 30 million tourists Venice. They want to promote local artisans. They also from all over the world descend on Venice, pumping up want to promote Venice as a place of education with to $5 billion into the local economy. But relatively few of tourist apartments housing students and bringing new those visiting the city is Italian. Italians who have never energy to the city. been as enamoured with the city and its canals as the rest of the world. The Australian tourism industry Many local are not keen for the city to resume ‘business Tourism is one of Australia’s major exports. In 2019, as usual’ once the pandemic is controlled. The non- Australia attracted 8.6 million international visitors profit group, We Are Here Venice, for example, has been (i.e. 980 arrivals per hour). Together, they spent $43.9 fighting to get authorities to recognise the advantages billion on goods and services.

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