COVER STORY • 2WInterview with Nejc Jus, Head of Research at the World Travel and Tourism Council

orld Tourism Returns toNormal After Three-YearDepression

By Japan SPOTLIGHT

World tourism is now back on a normal trajectory. Though the pandemic still poses a threat to publichealth, thanks to the development of diagnoses and vaccines, as well as people now knowing how toavoid infection, it is not considered a threat to the economy anymore, and people can travel again withoutworrying much about Covid-19. The following interview with Nejc Jus, head of research at the World Traveland Tourism Council (WTTC), an international think tank on tourism, reveals how global tourism has been
restored since the pandemic but also that it is facing another challenge from the Ukraine war.
(Online interview on May 25, 2023)

Good News & Bad News for
Global Tourism

jobs to reach 295 million and this year we
expect an additional 24 million new jobs for a
total of 320 million, edging closer and closer
JS: There is both good news andto the 2019 levels.
bad news for world tourism today.
2021 already saw the return of domestic
The good news is that thetravel across a number of countries including
pandemic is over, and we are now
in the Asia-Pacific region, while in 2022 weseeing a recovery in tourism. But
saw the return of international travel, withthere is also the Ukraine conflictinternational spending increasing by 82%
which started in 2022 and may
year-on-year. And that was despite China still
continue for longer. So I would likebeing closed in 2022. In 2019, China was theto hear your general assessment oflargest outbound spender globally and withthe current situation regarding
the country opening up in 2023, this will be ainternational tourism.
big boost to the global Travel & Tourism
sector. We expect an additional 23% year-onJus: You are completely right in saying thatyear increase in international spending in
the Ukraine war is still ongoing; most2023. Overall, we are seeing positive
Nejc Jus
importantly it is a human catastrophe above
developments in the Travel & Tourism sector,
all else but of course having economic consequences acrossand 2023 is also looking positive despite inflationary pressures anddifferent sectors, one of which is Travel & Tourism. But despite all ofthe cost-of-living crisis. People are putting travel at the top of their
the geopolitical risks, war, rising inflation and the uncertain outlook,
discretionary spending priorities (Chart 1 & 2).
tourism performed well in 2022. We have just released our economic
impact figures from last year, projections for 2023 and updated
JS: Judging from your comments, perhaps thenegative impact of the war seems to be somewhat
10-year forecasts. When we look at Travel & Tourism’s contribution
limited. However, we see food and fuel costs rising
to global GDP, it reached US$7.7 trillion, which represented a 22%
and that could have some negative impact onyear-on-year increase. So it increased 22% last year despite all of thetourism in the long run. Do you anticipate these
global challenges. However, it was still 23% behind the 2019 peak.
negative aspects on tourism due to the war?
The 2023 figures also look positive and we expect an additional
23% year-on-year increase with the sector’s GDP reaching $9.5
Jus: Bookings and visitor volumes have actually held up in Europe
trillion, closely approaching the pre-pandemic levels. When we lookdespite the war. It is a human catastrophe in the first place and aat Travel & Tourism’s contribution to jobs, in 2019 the sector was
loss of human life, but we are also seeing some indirect effects. For
one of the largest contributors to jobs globally, supporting 334
instance, higher energy prices are impacting flight prices, which aremillion jobs. Then Covid came, and millions of jobs were destroyedin turn affecting airlines, as well as driving inflation and reducing
by the pandemic. But in 2022 we saw the return of nearly 22 million
https://www.jef.or.jp/journal/

Japan SPOTLIGHT • July / August 2023

11tourism into Eastern European countries has beenpretty much negatively affected by the war. What isyour estimation?

consumers’ disposable incomes. This of course feeds into howmuch people can spend and on spending priorities. Moreover, withthe space above Russia and Ukraine being closed, some flights aretaking longer which is also having an impact on flights costs.

Regional Consequences of the War &Declining Impact of the Pandemic
JS: For Japanese people, Eastern Europe is usually avery popular tourism spot, but at this moment,

Jus: Eastern Europe is such a big region and there are somecountries that have been doing well. For instance, Turkey performed
well last year with volumes already above 2019 levels. Croatia is
another example. But of course, Russia and Ukraine are not
performing well given that the war is taking place there. In Ukraine,
after the war finishes, investment will be needed to restore theCHART 1

Total GDP Contribution and Total Travel & Tourism Jobs

Total Travel & Tourism Jobs

Total GDP Contribution
201920222019

2020 change

10.4%-49.4% 7.6%

(of Total Economy)
US$ 10.0 Tril.

+23.3% 11.6%

US$ 9.5 Tril.
(-5% vs 2019)(Economychange: +1.3%)

US$ 15.5 Tril.

2020 change+22% 334 Mil.

(Economychange: +3.1%)2033 Forecast

Annual change

9.2%

Annual change

US$ 7.7 Tril.
(-22.9% vs 2019)2023 Forecast2022-21.2% 295 Mil.
(-70.7Mil.) (9% share ofglobal jobs)(10.3% share ofglobal jobs)

2023 Forecast

CAGR 2023-33+5.1%(Economy CAGR
2023-33: +2.6%)

320 Mil.
(9.6% share ofglobal jobs)

Annual change+7.9%(-11.4% vs 2019)2033 Forecast

Annual change+8.2% 430 Mil.

New Jobs(2033 vs 2023)(-4.2% vs 2019) (11.8% share ofglobal jobs)

110 Mil.

Source: World Travel and Tourism Council (WTTC)CHART 2

Travel & Tourism Regional Performance 2022
North America
2.3 Tril.

335.6 Bil.

8.1%
+18.4%

Europe2 Tril.

Middle East

+33.2%
10.9%

Latin America
302.6 Bil.

+40.1%

8.3%

Caribbean
62.7 Bil.

-12.9%+46.9%

North East Asia
953.3 Bil.

+79.9%+33.5%
7.6%

241 Bil.

5.7%South East Asia
+9.9%

241.7 Bil.

6.8%

Oceania

Africa168 Bil.

3.8%South Asia

+113.3%+37.6%

6%

5.9%

Source: World Travel and Tourism Council (WTTC)

12 Japan SPOTLIGHT • July / August 2023

Total T&T GDP
Contribution (US$) 2021

% Share of Whole
Economy GDP

X% % T&T GDP Change 2022

149.6 Bil.

7.5%

country’s assets and attract tourists back.
JS: Compared to Europe, would you say that therecovery in tourism in Asia is more robust?

Jus: In fact, Asia-Pacific saw only 7.5% annual growth in Travel &Tourism GDP in 2022, well below the global average of 22%. Growthin the region was dragged down by China which remained closed in
2022. With China re-opening this year and because China is a key
tourist source market for so many countries globally, and particularly
for other Asian countries, it’s a very positive development. We see avery strong pent-up demand from Chinese travelers who do want totravel. But what needs to happen now is to ramp up the capacity and we need to improve connectivity with other countries andregions, for example Asia-Pacific with Europe, and across the AsiaPacific region itself.
JS: This impact on tourism seems to be limited, but it

may depend on how long the war continues.
However, in Ukraine and in Russia this negative
impact on tourism must be enormous and I guessthat recovery will take a long time given the damage
to infrastructure.

Jus: Yes, the infrastructure is being destroyed and so what needs tohappen post-war is that the international community has to bring thepublic and private sector together and start thinking how we canredevelop Ukraine so it will be ready to welcome tourists again. Of
course, capital investment will be needed and connectivity will needto be restored in the country – so these two things need to happen
before tourism can reach the levels we saw before.

Structural Impact of the Pandemic & War onTourism
JS: How would you assess the pandemic’s long-term

structural impact on tourism? For example, it hascaused serious damage to tourism-related
infrastructures.

Jus: This was not the first pandemic – we had SARS, we had Ebola
in Africa and others, and we do learn over time how to better copewith a crisis, and hopefully with this crisis we’ll learn what to dobetter next time. So hopefully next time we are better prepared, and I
do believe that at some point something will happen again. What waslacking during the last pandemic was collaboration between
countries and what we have seen in some countries is the impositionof travel restrictions that were not coordinated across international
borders, with travelers not knowing what happens next. This can be
improved for next time so the Travel & Tourism ecosystem is not asdamaged as it was during the pandemic. Good news is that many
countries including Japan and China have opened up by now and areready for business. So we hope the recovery continues on thistrajectory. When we look at the pandemic’s impact, it has resulted in
the emergence of new trends and accelerated some older ones.
These include the growing influence of social media on decisionmaking, the desire for flexible booking policies and payment options
when booking a trip, and an increased tendency towards trips thatblend work and leisure, whilst an interest in sustainable travel
remains strong.
JS: And so do you think international tourism willcontinue to contribute to the economy?

Jus: When it comes to tourism the majority of spending globallycomes from domestic tourism and hence domestic tourism has beena significant contributor to economies across the world, including in
Asia-Pacific and including China and Japan. Just to give you somefigures here, in Japan for instance, in 2019 international visitor
spending was responsible for 18% of the total spending anddomestic for 82%. China has a very similar story with 86% domestic
spending while 14% was international in 2019. However,international travelers do normally stay for longer and do bring moremoney to the purse per traveler, so it’s a very significant source ofrevenue. It is coming back and 2022 was the first year of truerecovery for international spending across countries and also incities. A lot of cities globally are highly dependent on international
spending, including London and Dubai, for instance. City travel iscoming back and the outlook is positive.
JS: Do you think international tourism in big cities isrecovering much faster than tourism in more rural
areas?

Jus: Some cities were devastated by the pandemic, and I don’t havethe exact figures for recovery in the cities versus more rural areas.
But in 2022, we did actually see a very positive improvement forcities globally: 10 out of 82 cities that we analyzed were alreadyexpecting to be above 2019 levels last year in terms of Travel &Tourism GDP. Doha, which hosted the FIFA World Cup, performed
really well last year. In 2022 Paris was the largest tourism
destination globally, but for 2032 we expect Beijing and Shanghai,
for instance, to overtake Paris. The next decade really is the growthstory for Asia-Pacific cities.

Paris Olympics in 2024
JS: Next year the Olympic Games will be held in Paris.

Will this help to bolster European inbound tourism
significantly?

Japan SPOTLIGHT • July / August 2023

13

Jus: Paris is already the world’s largest Travel & Tourism destination,and the Olympic Games will contribute to further growth. We saw
this in London which hosted the Olympic Games in 2012, and wesaw significant regeneration of east London where the Olympic
stadiums were built. So the Olympics really helped with regeneration
not just for sports venues but for the entire community there.
Tourism is at its best when it’s good for the residents as well; itneeds to be holistic – good for residents and visitors alike.

Role of WTTC in the War
JS: If the war in Ukraine continues for a long time

there could be some negative impacts on tourism aswell, not only in Europe but also in other countries.
This is with rising fuel costs and food costs and soon. What do you think should be done to prevent
such negative impacts growing by tourism
organizations?

Jus: It’s very difficult to predict how long the war will last andinflation last year was at levels never seen before. So this is having
an impact on disposable incomes and also an impact on how muchpeople can spend on various things. We have seen in our recent
research on consumer trends that spending on travel has been
holding up really well and has been on top of people’s discretionary
spending priorities. This year people are again willing to spend thesame on travel that they did last year or even more. But inflation
remains a risk. There are government schemes and initiatives inplace around the world to mitigate the impacts from inflation.
JS: Will the WTTC be promoting any international

efforts to invite countries and their tourism agencies
to discuss how to reduce such negative impacts ontourism?

Jus: Every year we organize our global summit and invite leadersfrom the public sector and senior figures from companies such as
CEOs or chairmen. Last year we had it in Riyadh, Saudi Arabia. This
year it is happening in Rwanda in Kigali in the first week ofNovember. We always pursue dialogue between the private andpublic sectors and the challenges are something we discuss
constantly with our members, and we hope that these efforts will
have an impact on the Travel & Tourism sector.

Jus: Digital technology is one of the focus areas for everyone within
the travel ecosystem. Technology has been accelerated by thepandemic and I see technology as an enabler for better experiences,while it cannot completely replace the actual physical tourist
experiences. For instance, we are seeing a significant increase insocial media as a tool to influence travel decisions, particularly
among the younger generations and leisure travelers – particularly
Instagram, Facebook and TikTok.
Secondly, people can experience certain places beforehand byusing the metaverse. This is not going to replace the full experience,but it can give people a flavor of a destination before they go on
holiday, so it enhances the overall experience. Another example isbiometric technology at airports. We want traveler journeys to be as
safe, seamless and efficient as possible.
JS: There are some new trends in tourism. One ismedical tourism, and another is sustainable tourism.
How do you assess these two new trends?

Jus: I wouldn’t call them new trends, as we’ve seen medical tourism
and sustainable tourism before the pandemic. We published a reportin 2019 looking at medical tourism and the largest destinations for
medical tourism globally. For example, the US, France and Turkey aresome of the key centers for medical tourism. I would also mention
wellness. Covid-19 has had a significant impact on people’s wellbeing and as a result, people want to travel more to improve theirmental and physical well-being.
With regards to sustainable travel, it’s something that has takenoff. In our recent consumer trends report, according to Trip.com,
69% of travelers said they were actively seeking sustainable travel
options, which is very positive. But what we need to do as a sector isto start measuring our climate footprint in addition to the socioeconomic impacts.
To respond to this need, we at WTTC together with the Saudibased Sustainable Tourism Global Center, started measuring theclimate and social impacts of the sector globally for 185 countries.
Now we know that in 2019, when travel activity was at its peak, thesector was responsible for 8.1% of global greenhouse gas
emissions. And now that we know the status quo we can take thenext steps to further reduce emissions, so that net zero targets forthe sector can be reached.

Digital Tourism & Other Trends
JS: I note that digital technology used in the tourism

sector has become very common as a result of thepandemic. Do you think that will continue to someextent even after the pandemic is over?

14 Japan SPOTLIGHT • July / August 2023

Written with the cooperation of Joel Challender who is a translator, interpreter,
researcher and writer specializing in Japanese disaster preparedness.