US remains world’s biggest tourism market: WTTC

The US remains the largest tourism market in the world, with tourist-related activities generating $1500bn for the US economy in 2017, according to the World Travel & Tourism Council (WTTC).

“Our research shows that travel and tourism directly supports nearly twice as many jobs as the banking sector, eight times more than the mining sector, and six times more than the automotive manufacturing sector,” said Gloria Guevara, WTTC president and CEO. “The tourism sector is the best partner the US can have in creating new jobs.”

The WTCC’s US Economic Impact report found the sector accounted for nearly 14 million jobs and $200bn in exports in 2017. It also found that while the US tourism sector grew by 2.3% in 2017, other countries, including China and the UK, recorded higher economic growth rates. In particular, the tourism and travel sector grew by 9.8% in China, 7% in Spain, 6.2% in the UK and 5.5% in Canada. These impressive growth rates elsewhere in the world suggest the US tourism sector is vulnerable to future challengers.

China and India in particular represent the biggest threats to US tourism supremacy, with China’s tourism and travel sector expected to overtake the US by 2028, according to the WTTC. It says by 2028 the US tourism sector is projected to be worth $2000bn, whereas China’s is expected to reach $2700bn. At the same time, India’s tourism sector is expected to grow from $234bn (in 2017) to $492bn by 2028, which would make it the world’s third largest tourism and travel market.

The report concludes that the US must enact innovative measures to attract more international visitors and fend off its global competitors. In particular, Ms Guevara identified the US Visa Waiver programme and the US Global Entry scheme as “the best in the world”. She said: “[The US Global Entry] expansion would encourage visitors, especially high-spending business and regular travellers.”

From a policy perspective, it is also integral for the US to promote an environment conducive to international visitors, said the report. “The government is ideally placed to tap into this opportunity, by promoting the country so that visitors know that the US is open and welcoming, while being secure,” said Ms Guevara.

Since assuming office, the Trump administration has sought to strengthen US national security by proposing a variety of measures, including fortifications to the US-Mexico border wall and the introduction of an eight-country travel ban. While these policies could have damaging consequences in the future, there is no evidence to suggest that the Trump administration has directly harmed the US tourism sector, as per the report’s findings.

While US tourism growth lagged behind its international competition, across the Atlantic, UK tourism enjoyed a highly successful 2017. It grew by 6.2% in 2017 – much higher than the global average of 4.6% – according to the WTTC. Most notably, the travel and tourism sector “grew by over four times the rate of the wider UK economy in 2017”, according to the WTTC’s Economic Impact report for the UK.

It found that in 2017, the British tourism sector accounted for £214bn ($301bn) and 4 million jobs, with one out of every eight jobs in the UK economy dependent on the sector. Despite concerns over the forthcoming Brexit, UK tourism largely benefited from a weak pound sterling, as well as a significant increase in domestic travel or “staycations”, said the WTTC.

The UK recorded a 7.9% spending increase by international tourist visitors, as well as a 6.7% increase in tourist arrivals – the strongest growth in over a decade. “Behind this growth lies a double benefit of the sustained weakness of sterling after the EU referendum in 2016,” said WTTC director of research Rochelle Turner.

As with the US, the WTTC warns that the UK government must enact policies that will guarantee sustained long-term growth in the tourism sector. “While the weak pound is certainly improving competitiveness in the short term, and driving visitor arrivals and spending, there are significant challenges in the longer term which will need to be addressed,” said Ms Guevara.

Specifically, the report emphasised the importance of the UK government establishing regulatory clarity with the EU to prepare travellers and the tourism sector for a post-Brexit world. “The continued inclusion of the UK in EU aviation agreements will be vital if the UK is to continue to enjoy access to high spending EU markets and maintain affordable European travel for residents,” said Ms Guevara.

While the success of both US and UK tourism relies on international visitors, they also rely heavily on each other. According to investor monitoring service fDi Markets, the UK is the top source market for the US tourism sector with nearly 67 greenfield projects and 12,871 jobs created, since 2003. As a comparison, Spain (which is ranked behind the UK) has been responsible for 35 greenfield projects and the creation of 4662.

Unsurprisingly, the US is also the top foreign source market for the UK tourism sector with 108 projects and 10,955 jobs created since 2003, according to fDi Markets. US hotel chains, especially Travelodge and Hilton Worldwide, are among the top foreign companies investing in the UK tourism sector.

Based on this evidence, it is safe to say that UK-US bilateral relations will be important for the future of each country’s respective tourism sector. Yet amid political uncertainty stemming from Brexit and the Trump presidency, only time will tell if this “special relationship” is truly special in the case of tourism.