Face-to-Face: David Scowsill
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This week David Scowsill, President & CEO of the World Travel & Tourism Council (WTTC), talks to Travel Daily about a wide range of issues, from tourism growth to visa facilitation and the growth of the Chinese outbound market…
Q) With many areas of the global economy softening, how do you believe the travel and tourism industry is able to continue its steady and consistent growth?
Travel and tourism is an extremely resilient and important sector. It currently generates US$7.2 trillion to the world economy, which is 10% of total global GDP and it supports 284 million jobs – one in 11 jobs worldwide.
In 2016 our sector will grow by another 3.1%, outpacing global economic growth for the sixth consecutive year. On average travel and tourism grows about 1% faster than the global economy, which shows that despite some economies softening our sector continues to drive growth.
Q) Related to the question above, is travel and tourism becoming immune to economic factors and “forces majeure” that have, in the past, impacted the industry? And if so, why is that?
What we have seen over the last years is that people continue to travel despite terrorist attacks, natural disasters, diseases and political turmoil. The traveller is extremely resilient and continues to travel, sometimes changing destinations to another location that is perceived to be more safe.
Even in a recessionary environment, with less disposable income available, people still continue to travel and put other household expenses on hold.
If we look at China, despite the reports of the slowdown of its economy, we expect China’s travel and tourism sector to grow by 6.3% over 2016. We anticipate the growing middle class in China will continue to travel and explore the world. The forecast is for 131 million outbound Chinese tourists this year.
Q) Despite its resilience, what are the major challenges facing the continued growth of the travel and tourism industry?
The world has seen many terrorist attacks over the last year. Whilst these attacks are utterly tragic, travellers have shown to be more resilient than ever. Governments need to recognise the issues, address the security concerns and not over react. Sometimes the reaction is to close borders or implement stricter visa requirements.
A key threat to the growth of travel and tourism is for companies and consumers to ignore the impact our sector has on the environment, local communities and cultural heritage. While travel and tourism is a force for good, it is extremely important that all stakeholders in the sector adopt policies that support sustainable growth and align with the UN Sustainable Development Goals.
Q) Together with the UNWTO, the WTTC has long campaigned for the relaxation of visa regulations and other barriers to travel. Are you happy with the progress being made?
Over the last decade we have seen major developments of countries adopting more visa friendly policies. Countries like India, Indonesia and Japan have all implemented or extended visa waiver programmes.
Visa requirements are another concern that hampers travel growth. We advocate for electronic visas or visa waiver programmes, which are more customer friendly and more secure that the paper driven approach. 1.2 billion travellers crossing international borders still need to fill in a paper form, stand in line at a consulate and get a paper stamp in their passport. One of the WTTC strategic priorities is freedom to travel, which means the right of people to cross international borders for leisure and business travel purposes, without compromising security.
Q) To what extent to global issues like the refugee crisis and immigration debates (Brexit, Trump’s border wall etc) threaten to raise barriers to travel?
Looking at the overall refugee crisis, it certainly has an impact on travel and tourism – not directly through the current movement of people, but rather because of the restrictions governments are imposing on the freedom to travel for business and leisure purposes. We urge politicians to separate immigration issues for tourism from the refugee crisis concerns.
We encourage the countries currently discussing therefugee crisis to continue as normal with tourism-related immigration processes, whilst working to resolve the humanitarian issue of displaced peoples.
Q) How do you believe that destinations – particularly in Asia – can sustain the huge influx of Chinese visitors expected in the coming years?
Within Asia there is a wide diversity of how dependent countries are on travel and tourism, and how much they are forecast to invest over the next 10 years. Infrastructure investment is key to accommodate the influx of visitors. If we look at our recent ASEAN study, the data shows that 95% of the US$782 billion investment to go into the region will come in five countries: Singapore, Indonesia, Malaysia, Thailand and Vietnam.
Different types of infrastructure are needed in each country. For some countries it is about continuing to invest in new products and attractions to encourage repeat customers. Others need to expand their air connectivity, with investments in airports and terminals. In emerging tourism markets, the focus should be more on other types of infrastructure, such as banking services, mobile phone networks, and health and hygiene services.
The first step is for governments to acknowledge the need for investment and to prioritise the development of the sector in their countries. It is important that the right mix of investment is defined, which means researching the key needs to meet the growth. Investment has to be sustainable, as we need to balance growth with the preservation of the world’s assets.
Alongside investment in infrastructure and training of people, we encourage the countries within ASEAN to work more closely together, moving towards open trading, a single visa entry system and open skies agreement. Europe provides a model for this.
Q) What environmental and social impact do you think this tourist surge will have (positive or negative)?
An increase in tourism numbers is positive. Not only does it bring additional income to people who work in the sector, but it connects travellers to local communities, bringing a greater understanding of cultures and traditions.
However we need this growth to be sustainable. There is an increased pressure on companies in our sector to integrate sustainable practices into their operation. There will be pressure on destinations to manage their growth sensibly as the numbers of tourists increase.
Acknowledging the sustainability targets set out at the COP21 meeting in Paris last year, we will have to focus very hard on the climate change agenda and the commitment to reduce carbon emissions. This is not just an issue for aviation, but for the entire sector.
Q) Which markets do you expect to drive the growth of travel and tourism in the coming years and decades?
In terms of outbound it will clearly be the Chinese traveller. China is already one of the world’s largest tourism economies and it continues to grow and gain in importance. The country’s travel and tourism sector is forecast to grow by 7% annum for the next 10 years and by 2026 it will account for 10% of the total Chinese economy.
Chinese are the biggest spenders abroad. This year, the outbound spent grew by 53%, spending over CNY1.4 billion abroad. Despite the reports on the Chinese economy slowing down, the Chinese middle class is still growing rapidly. This provides more people with additional disposable income that is being spent on travel domestically and overseas. Additionally there are some 200 million retired people in China, who are being encouraged to use their savings to travel.
With the inbound markets, the United States, Spain, China, Thailand and the UK were the leaders in terms of visitor exports in 2015, which is money spent by foreign travellers in their country. Over the next decade the top five will be United States, Thailand, Hong Kong, Spain and the UK.
Our research further predicts that the top five fastest-growing countries over the next 10 years in terms of visitor exports will be Myanmar, Brunei, Brazil, Peru and Zimbabwe. You have to take into account though that some of these markets come from a very low base, but they all have a bright future ahead.
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