Startup City Magazine

Travel and Tourism-The Largest and Fastest Economic Sector Globally

By Inder Sharma, President & CEO, HotelBids

Inder Sharma, President & CEO, HotelBids

Headquartered in California, HotelBids offers one-click booking for last minute rooms. This reservation platform empowers customers to make unanimous quote request for rooms in the desired location and pick suitable place to stay from multiple bids by matching properties. 

The travel and tourism industry has become one of the largest and fastest growing economic sectors globally. Its contribution to the global Gross Domestic Product (GDP) and employment has increased multifold. Global travel and tourism demand has grown consistently over the past two decades and shows very little signs of slowing. By 2020, it is estimated that 1.5 billion international trips will be taken. Over the last three decades, new travel destinations have sprung up which has impacted the socio economic and employment in these locations. Billions of dollars are being invested in these destinations to increase supply at all levels.

As per WTC’s latest report, for the fifth successive year, the growth of the Travel & Tourism sector in 2015 (2.8 percent) outpaced that of the global economy (2.3 percent) and a number of other major sectors such as manufacturing and retail. In total, Travel & Tourism generated $7.2 trillion (9.8 percent of global GDP) and supported 284 million jobs which equivalents to 1 in 11 jobs in the global economy. The outlook for Travel & Tourism in 2016 remains robust, despite economic fragilities and other sources of volatility in the wider market. The sector’s GDP growth contribution is expected to accelerate and again outpace growth of the wider economy. Stronger growth in 2016 is likely to be underpinned by an improving global economy. The lowest oil prices also have boosted the demand for tourism. In last few years, travel has been affected due to terrorism threats globally. However, tourism and travel industry remains unaffected and governments all over the world are taking extra security steps to make the travel safer.

Recent trends in travel industry show an upswing growth and creating job opportunities and bring economic and social benefits. Industry is expected to create new 370 million jobs by 2026 per WTC report.  This will require governments to provide open arm policy for new travel destination development initiatives globally.
There are several factors such as Zika virus, ISIS threats, and political instabilities in some areas which will affect tourism and travel industry globally from time to time. However, there are some good factors that will contribute to growth in tourism and travel globally. Few of the factors are continued to be the strength of the fastest growing Chinese market. Baby boomers’ population is increasing and this is creating a huge influx of tourists to the industry. Working class who now could work from anywhere, tend to take vacations more than before because now they could work from anywhere as wifi and digital infrastructure is adequate enough to contribute to work place.
 
In last two decades, world has added thousands of new destination and this has created the demand for travelers to explore new places. Internet and 100s of online travel agencies and tour operators has created an excellent eco system for travelers to shop on line and get best deals 24x7. This also has resulted in connecting customers directly to tour destinations. Internet has also cut the barriers of language as today one can easily translate any language. Travel business will continue to grow in 2016 due to globalization and rise in multinational organizations that has created user created contents to boost travel destination. Few countries are becoming more popular for specific services such as healthcare, duty free shopping, natural and holistic care and education.

 India is the fastest growing country to provide healthcare travel services.  There are hundreds of top travel sites but few of the top tourism destinations are Las vegas, Antalya (Turkey), Kualalumpur (Malaysia, Dubai, Istanbul (Turkey), Shenzen (China), New York, Washington DC, Los Angeles, Orlando (USA),  Macau, Paris, London, Rome, Bangkok, Singapore, Hong kong, Tokyo, Milan (Italy), Mecca (Saudi Arabia), Prague (Czech Rebublic), Pattaya (Thailand),  Miami,  Phuket (Thailand), Guangzhou, Taipei (Taiwan), Seoul (South Korea) and Agra and Delhi (India). Still one of the world's most vibrant cities despite astronomical living costs, it's no surprise London is the world's second most visited destination. In fact, Hong Kong is the most visited place in the world. 

Personalization of services, moving infrastructure to cloud and digital security are going to be the key trends in the hospitality industry. In India, travel industry is impacted by the rise in middle class who are well to do and are over 400 million. At the same time, rising income levels, altering lifestyles, growth of varied tourism offerings and strategy and regulatory backing by the government are playing a pivotal role in modeling the travel and tourism sector in India.

The reach of broadband, mobility and the young profiles of today’s India have been creating a market, business opportunity for travel & tourism industry. For India, the direct contribution of travel and tourism to GDP is expected to grow 7.2 percent per annum to $ 88.6 billion (2.5 per cent of GDP) by 2025. Also, the tourism and hospitality sector is among the top 15 sectors in India to attract the highest foreign direct investment (FDI). The travel and tourism industry in India entailing domestic and international inbound travel is projected to increase at a CAGR of 12 percent to $27.5 billion in 2016 from $19.7 billion in 2013.

Personalization of services is gaining momentum especially hospitality industry in general. Digital age is enhancing the customer experience while hospitality and travel industry is jumping into the cloud bandwagon as cost and data mining offers great opportunity to connect with customers directly.

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