In 2019, the travel and tourism industry contributed $1.8 trillion to the US and $1.58 trillion to China’s GDP. Worldwide, the tourism sector contributes a little over 10% to all the economic output. The COVID-19 pandemic has brought the travel and tourism industry to a standstill. It has forced hundreds of millions of people out of jobs. Here we take a look at the top 10 economies that rely the most on tourism.
According to the non-profit World Travel and Tourism Council, the tourism sector employed 330 million people worldwide in 2019. That's one out of every 10 jobs on the planet. Last year, it contributed $8.9 trillion to the world's GDP. The tourism industry creates jobs in a variety of forms including local guides, restaurant workers, hoteliers, tour operators, and more.
Coho Capital 2Q20 Commentary: Podcasts, The New Talk Radio
Coho Capital commentary for the second quarter ended June 30, 2020. Q2 2020 hedge fund letters, conferences and more Dear Partners, Coho Capital returned 46.6% during the first half of the year compared to a loss of 3.1% in the S&P 500. Many of our holdings, such as Netflix, Amazon, and Spotify, were perceived beneficiaries Read More
Ten economies that rely the most on tourism: Jobs per 100 visitors
There are at least 44 countries where the tourism industry employs more than 15% of the workforce. Most of them are island nations such as Antigua & Berbuda, Aruba, the US Virgin Islands, Maldives, Bahamas, British Virgin Islands, and Anguilla. They have suffered massive economic damages due to the lack of a steady tourism revenue.
But the small island nations are not where your tourism dollar goes the farthest. A more objective way to find which economies rely the most on tourism is to look at the number of tourism jobs created for every 100 visitors.
The Official Esta analyzed data from the World Bank and Knoema to find out how much tourism contributes to employment figures in more than 170 countries. In 2019, there were a record 1.5 billion international tourist arrivals. The figure was expected to rise 4% in 2020, but the coronavirus pandemic has changed everything.
The Official Esta found that the economy of Bangladesh relies the most on tourism. The country has a staggering 944 tourism related jobs for every 100 visitors. It makes Bangladesh highly vulnerable to unemployment caused by the steep decline in tourism.
India is the distant second with 172 tourism related jobs per 100 visitors. Given India's population of 1.3 billion, roughly 26.7 million people work in the tourism sector. India is not only a popular tourist destination but also has a large number of outbound tourists, thanks to its growing middle-class.
Pakistan is ranked third with 154 jobs per 100 visitors. Venezuela is the only South American nation on the list with 101 tourism jobs. The list is dominated by Asian and African countries. It indicates that even though the Western countries attract a lot more tourists than Asian and African nations, there are proportionately fewer people employed in tourism related businesses.
Large economies where tourism contributes the most to GDP
The World Travel and Tourism Council sheds light how how dependent large economies are on tourism. Many small island nations are almost entirely reliant on tourism. But the pandemic's impact on larger economies is affecting far more people than in tiny island nations. Large economies are feeling the impact of travel restrictions to contain the pandemic.
Several European nations depend heavily on the inflow of international tourists. France, Spain, Italy, Germany, and Greece are among the world's most popular tourist destinations. According to the World Travel and Tourism Council, Spain alone would lose $68 billion if the travel restrictions remain in place through September.
Topping the list is Mexico. Tourism contributes 15.5% to its GDP. It is followed by European nations Spain (14.3%) and Italy (13%). Tourism accounts for 11.3% of Turkey's GDP.
China occupies the fourth spot with 11.3%. According to the World Travel and Tourism Council, travel and tourism contributed $1.58 trillion to China's GDP in 2019. Tourism contributes roughly 9% to the UK, Germany, and Saudi Arabia's economic output.
The United States is the only country that gets more tourism revenue ($1.8 trillion) than China. But tourism makes up only 8.6% of the US GDP. The US has become the global epicenter of the COVID-19 pandemic with more than 4.3 million confirmed cases and 150,000 deaths.
South Korea is one of the least affected large economies. Travel and tourism industry contributes merely 2.8% of its GDP. The country has also eased some travel restrictions by setting up a travel corridor.