Destination Always: How Travel Shapes Our World
A first of its kind study to understand the impacts of travel on social, economic and environmental outcomes at the local level
A product of year-long partnership with Economist Impact, this groundbreaking report explores the theme of travel as a force for good.
Tourism sector generates US$2.5trn in direct revenues globally, helping to provide economic opportunities to people and destinations, build intercultural understanding, and foster appreciation of the natural world.
This article highlights a few macro-learning, but the report’s true value lies in detailed case studies of specific destinations and the practices they introduced to boost positive impacts of tourism.
1. Travel and tourism generates economic growth, reduces unemployment, and contributes to gender equity.
Overnight visitors positively contribute to economic growth and reduce unemployment. Crucially, visitors help to create jobs across the whole economy, including for groups that often struggle to find employment, such as women and young people.
By stimulating demand for goods and services in host geographies, overnight visitors help to create jobs and enterprises, incentivise the development of local infrastructure, generate additional export revenue, and propel growth in other sectors of the economy.
In North America, the Middle East & Africa, an increase in the number of overnight stays by 1% is associated with a roughly 0.5% increase in real GDP growth.
Services that visitors use — from the accommodations to food services and transport — require relatively more employees compared to other sectors of the economy. They also require further employment across the value chain (e.g. in farming, handcrafting, arts, marketing and digital technology), mostly in small and medium-sized enterprises. This means that the contribution to people’s livelihood and prosperity can be substantial, particularly in developing countries.
Travel and tourism is a driver for gender equity. The gender wage gap is smaller in this sector than in other industries.
In North America, the Middle East and Africa, an increase in the number of overnight stays by 1% is associated with a roughly 0.5% increase in real GDP growth. This compares with 0.3% in Latin America and the Caribbean, 0.24% in Asia Pacific, and 0.22% in Europe.
Travel and tourism is a driver for gender equity. Women constitute 54% of the global travel and tourism workforce — compared with 39% of the workforce across the broader economy — and the gender wage gap is smaller in this sector than in other industries.
Nearly two- thirds (63%) of respondents in the global population survey felt that travel and tourism had helped to improve gender equity in their local area. These perceptions are supported by the national-level econometric model, which found that a 1% increase in international tourist arrivals was linked to a 0.02% improvement in a geography’s score in the World Economic Forum’s Global Gender Gap report.
2. Overnight visitors improve social tolerance and intercultural understanding.
Even in an era of unprecedented connectivity, intolerance and prejudice remain pervasive and entrenched in our society. Intriguingly, the research indicates that travel and tourism have the potential to address this issue, through facilitating opportunities for interaction and engagement between groups of different backgrounds.
Nearly two- thirds (65%) of respondents agreed that travel and tourism had improved tolerance towards foreigners in their local area
Four-in-five (79%) respondents in the population survey felt that their recent travel had expanded their worldview, and 70% agreed that travel had made them feel more empathy towards others.
Nearly two- thirds (65%) of respondents agreed that travel and tourism had improved tolerance towards foreigners in their local area, and three-quarters (75%) that engagement with visitors had allowed them to better understand different cultures and communities, and expanded their worldview.
The generally positive perception that interactions with people from other places have improved tolerance contrasts starkly with a growing narrative that travel and (over)tourism accelerate the loss of local cultural traditions, as large global brands start selling identical goods and services in popular main streets around the world, accelerating the impacts of cultural globalization.
3. Where travel and tourism generates negative impacts, these can be managed effectively.
Despite perceptions that overnight stays substantially increase the cost of living, the research finds that increased visitor flows have a very limited impact on residential rent prices.
Across the entire set of geographies included in this study there was no significant relationship between overnight stays and rental prices.
Only in tourism-intensive destinations does the research find a correlation between visitors and rental prices. In these destinations, a 1% increase in overnight stays has been associated with a 0.03% increase in rental prices (i.e. a doubling of overnight stays would be associated with a 3% increase in rent prices). The econometric model also shows that economic and policy factors, such as real GDP growth, local lending rates and unemployment rates are the predominant factors driving rental prices.
Policymakers in the survey believe that improving the supply of affordable housing is generally preferable to more restrictive measures. The vast majority of respondents identified affordable housing zoning requirements (91%), investment and subsidies for affordable housing (89%) and tax incentives for property ownership (87%) as effective for improving local housing affordability. More restrictive measures, such as regulation of short term letting of properties, regulation of non-residential ownership of properties and rent controls are seen as less effective.
Overnight visitors create a significant carbon footprint when traveling to and from a destination. However, overnight visitors’ carbon footprint during their stay is mostly influenced by the underlying carbon intensity of the destination.
The majority of carbon emissions associated with travel and tourism are related to transport to and from the destination. The econometric model found that a 1% increase in international overnight visitors is associated with a 0.23% increase in emissions from air traffic.
However, when controlling for the economic, energy and demographic characteristics of the destinations, the model found that visitors have a relatively limited additional impact on local carbon emissions, beyond what is reflected in their contribution to local economic activity.
The model shows that a 1% increase in GDP is associated with a 0.79% increase in CO2 emissions. Underpinning this trend is the strong historical connection between GDP growth and greenhouse gas emissions, which reflects the role of energy as a fundamental engine of economic development. This trend has just started to slowly reverse in some regions of the world, such as the EU, where increased demand for environmental policies can reduce emissions during periods of economic growth.
Making travel and tourism more sustainable therefore needs to focus on reducing the carbon intensity of local infrastructure — part of it being accommodations, in line with our Road to Net Zero report.
To further explore the economic, environmental and social impacts of travel and tourism in 50 cities and non-urban regions globally, download the report on the Economist Impact website. At Booking.com, we know that travel is a force for good, but we also understand that our stakeholders at tourism destinations around the world are looking best practices in managing trade-offs. This new study offers exactly that.
