YOU might not know it, but travel and tourism is one of the world’s most important sectors. Despite the downturn, it employs 235m people, which is equivalent to 8.2 per cent of all employment globally. Last year will go down in history books as the worst year ever for air travel demand, yet, that year, travel and tourism generated 9.4 per cent of world GDP. That’s a lot.
At this year’s Global Travel and Tourism summit in Beijing, there was recognition the industry still is recovering, realism about the unpredictable markets, and also optimism.
Tourism in Greece and Thailand, two of the most important hotspots, has fallen by as between 30 and 50 per cent due to the often violent protest activities there recently. However, Jean-Claude Baumgarten, President and chief executive of the World Travel and Tourism Council says that this won’t hit global tourism, because people simply will travel somewhere else.
Much of the hotel sector was under pressure during the recession as hotels were forced to slash room rates, and new building stalled. While hotels still are trying to get revenue per available room to match relatively healthy levels, Arthur de Haast, Global chief executive of Jones Lang LaSalle Hotels told me that he had definitely seen a positive shift in the willingness of hotel groups to buy assets. Assets coming to market have gone up sharply, and buyers are willing to fight for them. Also, with construction costs still down around 30 per cent, it is cheaper to expand.
This is exactly what Marriott is doing. When I sat down with Bill Marriott, the chairman and chief executive of Marriott International, he was keen to underline that the growth was in Asia, which is why they are building more hotels there. Chinese consumption is growing by 15-20 per cent, compared to three per cent growth in the US.
The Chinese government has made travel and tourism one of their top five most important areas to support. It will be interesting to see if and how the new UK government does this too.
Louisa Bojesen co-anchors European Closing Bell weekdays on CNBC.