Tourism-Led Policies for a Better World: The Importance of the Industry Getting a Seat at the Government Policy-making Table

Travel & Tourism (T&T) contributed 10.4% to the world’s GDP in 2019. This halved in 2020 at the peak of the Covid-19 pandemic but is forecasted by the World Travel & Tourism Council (WTTC) to recover to 9.2% in 2023. Around 320 million jobs globally are supported by T&T. Besides tourism being one of the top global industries, international tourism growth consistently exceeded global GDP growth before the pandemic.

Tourism is a complex industry with the economic multiplier impacts extending into agriculture, manufacturing, transport, accommodation, catering, retail and others. It is this complexity that creates such significant value for the global economy and the reason why policy decisions across different sectors can have far-reaching implications for this industry.

According to the World Tourism Organisation (UNWTO) , women comprise 54% of tourism employees compared to 39% for the broader economy; and the WTTC reports that 80% of businesses operating in tourism are small. Tourism contributes significantly to delivering economic value for women, small business, youth and rural communities.

Tourism is a transformative industry – not only in the benefits it can generate for destinations, but it must be acknowledged that it can also lead to externalities (negative impacts). For example, the industry is often highlighted as a key source of global carbon emissions; influxes of tourists can be detrimental to the quality of life of residents; tourism can cause environmental damage to natural resources; and high economic leakages from certain destinations means that limited benefits accrue to local destinations and communities.

Many of these externalities require a coordinated approach to policy-making to mitigate and reduce negative impacts and enhance the positive benefits of tourism on destinations.

The unequivocal answer to whether tourism should have a place at the table is “Yes”. Tourism has the potential to drive a better and more sustainable world if policy-making decisions are viewed through a tourism lens. Furthermore, it is intuitive that collaboration with the tourism industry is a necessity and not a ‘nice-to-have’ if we want to create a better world.

Policy prioritisation is a key pillar in the WTTC / JLL Tourism Readiness Index (“the Readiness Index”) and the World Economic Forum’s (WEF) T&T Competitiveness Index. Both indices consider how policies can enable (or hinder) tourism to thrive. The Readiness Index measures tourism destination readiness using 70+ indicators across eight pillars, with 10 indicators measuring policy prioritisation. The 2022 Readiness Index research on 63 global cities found that one-third of these cities have neither a tourism strategy nor sustainable tourism growth plans; almost 70% lack formal policies to manage tourism flows; and more than half do not have enabling tourism tax legislation.

The 2019 WEF T&T Competitiveness Index scored the prioritisation of tourism at a global average of 4.6 (out of a maximum of 7) with the highest score being 4.9 for Asia-Pacific and Europe / Eurasia, and the lowest being 3.9 for sub-Saharan Africa (40% of countries in Africa scored less than 2.0 which is very low).

As shown by these indexes, the global disparities in the prioritisation of tourism policy-making and of tourism indicates that there are gaps at the table. The ability of tourism to contribute to a better world is compromised when there is limited or no policy direction, and/or a lack of focus on tourism.

The situation is made more challenging when considering how many policy-making tables exist across different economic sectors, infrastructure, social and environmental constructs. In our experience, tourism is often missing from the tables where inter-governmental decisions are made.

A key area that illustrates the importance of tourism being involved in policy-making is visa policies. In 2019, the WTTC found that the shift to visa-free travel led to a 16.6% growth in travel demand. Countries such as India saw a 21% increase in arrivals when it shifted to its eVisa; Indonesia’s visa waiver saw a 24% increase; and Mexico’s third-party visa saw an increase of 17% in tourism demand. On the contrary, there is an example where entrance requirements were made so onerous that prior multi-year gains in tourist growth were eliminated in the space of just one year. Such was the case of one country where tourism wasn’t at the table when the policy decision was taken by a government department external to tourism.

At JLL, we promote the imperative that a tourism lens should be used to inform government decision-making. It is the reality that while government is responsible for creating a conducive environment for a well-functioning economy (including tourism), the private sector is responsible for the business of tourism. Policy-making should not only be tourism-inclusive but also private-sector inclusive.

A policy environment that enables tourism and provides certainty for investors, tourism business owners and operators helps to deal with the perception of risk and enhance tourism investment. Often, the T&T private sector can assist government with unpacking the potential implications of policy decisions and if negative, provide recommendations to counter these. If government seeks to create a better world through policies on issues such as sustainability, private sector buy-in can be more effectively obtained by giving opportunities for them to bring innovative ideas, rather than following a ‘top-down’ approach.

From our perspective, getting tourism to the table requires the following steps:

1. Acknowledge the significant role that tourism plays in the global economy. Understand its complexity and its multiplier effects. Tourism’s sphere of influence is large so policies informed through a tourism lens can have greater impact on bettering our world. This is especially true for impacting women, youth, small businesses, and rural communities.

2. Tourism has little chance of getting a seat at the table or being heard without champions. In our experience, the effectiveness of institutional frameworks and policy coordination succeeds or fails based on the people involved. People who ‘get tourism’ advocate for the industry and build networks outside of tourism to ensure that it gets its rightful seat at the table.

3. Identify which tables tourism needs to be at and find mechanisms to ensure this happens. The multi-sectoral nature of tourism dictates that tourism needs to be involved in policy-making that includes immigration, transport (air and ground transport), labour, tax, development planning, conservation, the environment, and more.

4. Don’t forget the private sector. Excluding the T&T private sector from consultation processes is detrimental. The private sector can be a powerful ally to achieving the goals for a better world if there is buy-in for government’s policy objectives.

The tourism lens in policy-making is therefore a multi-faceted approach. It is the intersection of various government role players, private sector and local communities coming together from different backgrounds to find the appropriate balance between economic, social, and environmental objectives.

The pandemic revealed to the world the importance of tourism, both economically and for our own health and wellbeing. It must be brought to the forefront of policy-making to ensure its long-term growth and should be seen as a critical lever towards the achievement of the world’s sustainable development goals.

Find out more about Tourism and Advisory

1. UNWTO Tourism Barometer

2. WTTC World Economic Impact Report, 2023

3. WTTC World Economic Impact Report, 2023

4. https://www.unwto.org/news/women-take-centre-stage-in-tourism-development

5. https://www.globalgovernmentforum.com/rebuilding-tourism-through-small-businesses/; WTTC World Economic Impact Report, 2022

6. World Economic Forum - The Travel & Tourism Competitiveness Report, 2019