Article #5

GLOBAL TOURISM: Bracing up for future challenges

World travel and tourism may on the ascendancy presently, churning impressive growth rates in terms of international tourist arrival figures and spends but the future of the sector, which is the world largest employer of labour and fastest growing sector, remains of concern to many.

This concern was once again raised at the World Travel and Tourism Council (WTTC) Global Summit on tourism held in Bangkok, Thailand earlier in the year with players from across the world in attendance. The Bangkok summit focused on the role of travel and tourism in driving sustainable development, asking how the sector can transform the world. With travel and tourism forecast to rise by 4 per cent a year for the foreseeable future, and 1.8 billion international travellers expected by 2030, the sectors transformative power in terms of economic impact is clear. However, it was noted that the resilience of this growth is dependent on the sectors ability to recognise and respond to the internal and external challenges it faces. Four external challenges, most critical to the future of the sector were identified. These are: Demographic changes:

A Professor of Globalisation and Development at the University of Oxford, Ian Goldin, identified three megatrends which will shape the future of the sector. The first, according to him, is the rapid decline in fertility, which means mean that while the world population will stabilise in terms of numbers, it will be increasingly old. Secondly, the workforce is changing dramatically, driven in large part by immigration. And finally, the growth of emerging markets which continues to be much faster than older, developed, markets.

Technology: The challenges and opportunities of technological developments are extensive, but Goldin focused on the moral and ethical impact of some of these advancements. While the Chief Executive Officer of Agoda, Rob Rosenstein, questioned the preparedness of the sector for the massive changes in distribution that technology will bring. Climate Change: This also top the agenda, with Goldin emphasising on the fact that there is yet is no system in place to address the problems of climate change, while the Managing Partner and CEO of The B Team, Keith Tuffley, highlighted that not acting on climate change will cost $44 trillion by 2060. Changing structures of work: Automation, freelance working, and the sharing economy are all impacting how peoap l e work and are employed. April Rinne summed it up with an anecdote from Robin Chase, co-founder of Zipcar, My father worked in one job all his life, I will work in five, my child will work five at a time.

As a sector which directly employs 292 million people, travel and tourism will be at the coal face when it comes to providing quality jobs, flexible work, and defining new relationships with employees. Besides these challenges, it was also noted that some of the greatest challenges to sector come from its own success and growth. Speakers identified a number of ways the sector could prepare for the 1.8 billion. These include: Understand the demographics of this growth:

The continued growth of the Chinese outbound market continues to represent a challenge when looking towards the future. However, the Managing Director of Shun TakHoldings Limited, Pansy Ho, suggested that the sector has not yet begun to anticipate the full extent of this.

The CEO of NITI Aayog, Amitabh Kant, also shared this view, reminding the audience that only a small percentage of Chinese and Indians have travelled abroad so far, and that as the rest of the population starts doing so it will change the global market. Harness technology for safe and secure travel facilitation: Ensuring secure travel is a key concern of the sector, as it always has been. However, processing an ever increasing number of travellers safely and securely, in a way which does not impinge too heavily on their time or convenience, is also a key challenge for the future.

The concept of digital borders was discussed, with the Tourism Secretary of Kenya, Said Athman, suggesting that a global visa is not beyond the realms of possibility as the data and political will is there. The Regional Specialised Officer with INTERPOL, Hyuk Lee, raised the opportunity of biometrics but suggested that agencies such as his did not know how to share information with the private sector. While the Senior Vice President, Global Merchant Development, Mastercard, Catharina Eklof, highlighted the importance of secure digital identity as a foundation for such a move.

Invest in infrastructure: Investment in infrastructure was a key theme, particularly when looking at the ASEAN perspective. The Minister of Tourism from Indonesia, AriefYahya, highlighted the importance of foreign investment in the region, since government funding can only cover part of the investment that is required. In the case of Indonesia about 30% of the total requirement.

This investment is needed across the board, not least in transportation. Talking from an aviation perspective, Regional Director of the Asia & Pacific Office of the International Civil Aviation Organisation, Arun Mishra, emphasised specific concerns about infrastructure constraints, which he described as a main stumbling block for development in the region.

Many airports are saturated and need a new runway yesterday. The problem reaches up into the skies themselves, with air navigation congested and urgent needs for new technology and navigation systems. Address overcrowding in hotspot tourist destinations: One of the greatest challenges facing destinations, as emphasised by the President of Carnival Cruises, Christine Duffy, is that it is in everyones interest to address overcrowding as companies will not want to go to places where they will not have a good experience.

Global Managing Director for Oceans at The Nature Conservancy, Maria Damanaki, and Deputy Regional Director, International Union for Conservation of Nature, TP Singh, highlighted the importance of impact on biodiversity and the environment, which is also critical to the customer experience. Identifying carrying capacity emerged as a potential solution which would allow both policy makers and industry to be on the same page.

But as Jamaicas Minister of Tourism, Edmund Bartlett, queried, how is carrying capacity measured and implemented? Senior Partner at McKinsey & Company, Alex Dichter, emphasised that ultimately this is a solvable problem of management, as there is enough space for everyone, its a matter of when and where they travel.

It is an issue that needs to be addressed, and travel and tourism should be encouraged to take the initiative, considering that, unlike other problems, the sector has enormous power to do something about this one. Despite the myriad of challenges facing the sector, there was optimism that they could be overcome. As Keith Tuffley pointed out there is no sector better placed to inspire people, and contribute the new thinking and innovation that is required.

Questions:

1. What do you think are the future trends of global tourism?

2. What is the primary piece of the framework that is being used in this article? Explain.

3. What is the secondary piece of the framework that is being used? Explain.

3 pages