The Travel & Tourism Competitiveness Index 2019
The Travel & Tourism CompetitivenessIndex 2019Travel & Tourism at a Tipping PointThe travel & tourism (T&T) industry plays a vital role in theglobal economy and community. In 2018, the industryhelped generate 10.4% of world GDP and a similar share ofemployment, and has shown enormous resilience over thelast decade. Fueling this expansion and relative resilienceis the ongoing growth of the middle-class in Asia andother parts of the world. In the coming decade, industrycontribution to GDP is expected to rise by nearly 50%.1In light of this expansion, policy-makers, industry leadersand other stakeholders will have to pay closer attentionto T&T competitiveness to capture this growing market.While government and business actors alike will need toconsider what competitiveness levers they can activate toretain or gain market share, special consideration needsto be given to sustaining tourism infrastructure, servicesand assets. As numbers of business and leisure travelersincrease the world over, improvements in competitivenesswill need to be undertaken alongside careful planningfor tourism management and carrying capacity ofdestinations. The results of the TTCI serve as a tool forpolicy-makers, T&T businesses and other stakeholdersto understand and advance the necessary dialogues andactions that will ensure the longevity of this critical sector.The 2019 Travel & Tourism Competitiveness Index (TTCI)assesses 140 economies for T&T competitiveness infour subindexes: Enabling Environment, T&T Policy andEnabling Conditions, Infrastructure, and Natural and CulturalResources (see About the Travel & Tourism CompetitivenessIndex 2019 for more details). The economies covered by theindex account for nearly 98% of global direct T&T GDP anda similar proportion of international tourist arrivals.2 In thissection we discuss what it takes to be competitive in T&T andthe implications for longer-term economic development andlongevity of the industry. The second section, 2019 Resultsand Analysis, presents overall results for the 2019 TTCI, alongwith analysis of ranking quartile groups. While there is somecountry/economy and regional analysis in Part 1, more indepth regional analyses, including data analysis and tables,are presented in Part 2. Further TTCI information can also beaccessed by visiting the Travel & Tourism CompetitivenessReport 2019 online (http://reports.weforum.org/ttcr).Explore additional features of the report at http://reports.weforum.org/ttcrT&T competitiveness requires a holistic approachThe TTCI is deliberately designed to reflect and measurethe diversity of factors that influence a country’s ability tocompete globally in travel and tourism. Each of the 14 pillarsthat make up the index, if addressed with appropriate policymaking and sufficient investment, has the potential to drivecompetitiveness and returns in tourism arrivals and receipts.What is explored to a lesser degree is the nuancedinterdependence of the pillars and their combined impacton the longer-term sustainability of the industry. The resultsof this year’s report present an opportunity to explorethis in more detail. At the outset, the data suggests thata holistic, systems-led approach to tourism strategyis required to truly perform successfully on the globalrankings. In particular, economies need to achieve a strongperformance on all of the pillars to rise to the top of theindex. Typically, the highest-scoring economies tend tobeat global averages on the majority of the pillars, whilethe opposite is true for the bottom-scoring economies.Only Mexico, Brazil and India have been able to rankamong the top 25% of ranked economies on the TTCIby outperforming the global average in as little as sevenof the 14 pillars. These economies have exceptionalnatural and cultural resources, which they combineeffectively with relatively strong price competitiveness.Yet even depending on a smaller number of pillars, such asNatural Resources, still requires a systems-led approach. Theassets that this pillar measures cannot be bought or created,but if not managed well can be destroyed rapidly. The abilityto generate demand and derive value from them relies heavilyon the ability to set and enforce environmental policies(measured in the Environmental Sustainability pillar) , as wellas the ability to effectively manage their “consumption”. Ifadequate focus is not given to preserving these assets, theywill, as with any depleted resource, cease to contribute tothe overall competitiveness performance of the country.Other interdependencies are equally clear. Developedinfrastructure and international openness are requiredto boost connectivity of destinations, which allows for agreater number of travellers to visit. A favourable businessenvironment makes it easier for T&T businesses to operate ina country, while a skilled workforce leads to better customerservice, productivity and capability to leverage increasinglyvital communication and technology tools. Concerns over3
The Travel and Tourism Competitiveness Report 2019For example, efforts by countries to ban flightsfrom nations with H1N1 outbreaks in 2009 wereultimately revealed to be ineffective in containingthe virus; and the estimated loss associatedwith the H1N1 outbreak for the Mexican tourismindustry was 5 billion. Similarly, between 2002and 2004, as a result of Severe Acute RespiratorySyndrome (SARS), Hong Kong saw a 41% reductionin tourism GDP, Singapore 43% and China a 25%reduction as well as a loss of 2.8 million jobs.The World Economic Forum convenes experts frominternational health organizations and travel andtourism business leaders to mitigate the impact ofoutbreaks on the industry and subsequently on nationalGDPs through its Epidemics Readiness Accelerator(ERA). Together, efforts are underway to improvedecision-making, coordination and communicationswithin and between both the public and private sectors,relating to risk, travel advisories and border measures.healthcare, hygiene, safety and security conditions canalso prove detrimental to generating T&T demand andinvestment, especially from abroad. Given the complexityand interconnectedness of these factors, it is impossible forindustry corporations or tourism agencies to tackle theseissues in isolation. They require cross-industry collaboration,public-private engagement and a better understandingof the global context beyond T&T. See Boxes 1 and 2for real-world examples of such collaborations.Strong T&T translates into overall economicdevelopmentOnce economies begin performing well along a broadrange of pillars—and in so doing begin to surpass the globalaverage in T&T competitiveness—trends show that visitornumbers tend to climb considerably (Figure 1). However,because T&T competitiveness depends on aspectssuch as business conditions, strong labour markets,technology and infrastructure, less developed economiestend to lag their more advanced peers in overall scores.Because enabling conditions such as these are beneficialto economies on a whole, T&T stakeholders, both public4Box 2: Protecting the Ocean Ecosystem:A Case for Public-Private CollaborationOnly 7% of the ocean is protected through MarineProtected Areas (MPAs). However, this figure variesbased on the criteria used. Further, many MPAs areeither only legally designated, poorly managed andenforced, or represent standalone efforts with littleintegration between them. Yet these ‘national parksin the sea’ should be seen as part of an economy’sinfrastructure, helping to ensure a sustainabletourism industry and a supply of food from the sea.Addressing this, and increasing levels of protection, iskey to restoring ocean ecosystems while generatingand safeguarding the businesses, communities,jobs and livelihoods that rely on healthy seas.The Friends of Ocean Action brings togetherleaders from government, business, civil society,international organizations, science and technologyto fast-track solutions to the most pressingchallenges facing the ocean. One way to advancethe health of ocean ecosystems is to promotethe achievement of ambitious marine protectiontargets by driving concerted, public-privatecooperation across geographies and sectors onthe establishment of MPAs. The Friends of OceanAction’s efforts include: engaging in key relevantpolicy fora to support the international communityin increasing global MPA coverage; partnering withkey stakeholders to set-up and champion a gamechanging new MPA platform and building a businesscase for MPAs that will mobilize a strong coalitionof world business champions ready to contributeto reaching a new 30% MPA target by 2030.Figure 1: Travel & Tourism Competitiveness Index 2019 andinternational tourist arrivalsInternational tourist arrivals (millions)TTCI meanBox 1: Global Health Security and T&T:A Case for Cross-Industry CollaborationThe number and kind of infectious disease outbreaks(e.g. influenza, Ebola, Zika, SARS, MERS-CoV,antibiotic resistant bacteria, etc.) have increasedsignificantly over the past 30 years and, as globaltrade and travel increase, the international spread ofdisease is expected to grow. In today’s globalizedworld, a pathogen can travel from a remote villageto major cities on all continents in under 36 hours,but unjustified or ineffective restrictions on travelor trade during outbreaks can have a massiveeconomic impact on affected countries.100SpainUnited States806040United Arab EmiratesJapan20234 Mauritius56TTCI 2019 score (1–7 scale)Note: International tourist arrivals excludes Liberia, (2017 or latest available).Top performers for each region are highlighted.Sources: World Economic Forum and World Tourism Organization (UNWTO).Explore additional features of the report at http://reports.weforum.org/ttcr
The Travel and Tourism Competitiveness Report 2019Figure 2: Correlation between TTCI pillars and international tourist arrivals, by income levelCorrelation nvironmentSafety &SecurityHealth &HygieneHumanResources &Labour Mkt.ICTReadinessPrioritizationof inabilityAirGroundTouristTransport& PortServiceInfrastructure Infrastructure InfrastructureNaturalResourcesCult.Resources &Business TravelNotes: Light-coloured bars indicate high-income economies, dark-coloured bars indicate low- and lower-middle-income economies. Log of international tourist arrivals (2017or latest available). Excludes arrivals for Liberia.Sources: World Economic Forum and World Tourism Organization (UNWTO).and private, can use this to justify investment in the sectoras it has reinforcing effects on the economy overall.The difference in average TTCI score for high-incomeeconomies and the average TTCI score for low tolower-middle income economies is approximately 38%.However, the average score between these economicgroups within the Natural Resources pillar narrows to justbelow 11%. This is due to the obvious reason that naturalassets are distributed among countries with varyingeconomic conditions. Therefore, many lower-incomeeconomies that have an abundance of natural assetswould do well to consider investing in efforts to driveeconomic development through the vehicle of a thrivingtravel and tourism sector, especially given that they maylack the foundations necessary to pursue other emergingeconomic pathways such as advanced manufacturing.An example from Africa is the marked increase in visaopenness that is in large part a response to the need todrive T&T on the continent but has the obvious benefit ofstimulating trade and development on a larger scale.3Moreover, assets like natural and cultural resources,have the potential to attract capital investment;suggested by the correlation between T&T capitalinvestment and Natural and Cultural Resourcessubindex scores, which is approximately 76%.Figure 2 shows the correlation between TTCI pillars andinternational tourist arrivals for low to lower-middle incomeand high-income economies. From this data, it is clearthat low to lower-middle income countries have a strongerrelationship than their high-income counterparts do betweenarrivals and pillars such as Business Environment, HumanResources, ICT Readiness, International Openness andoverall Infrastructure. This indicates that improving in theseareas may have a more marked impact on T&T demandExplore additional features of the report at http://reports.weforum.org/ttcrfor lower-income countries than for high-income ones. Onthe opposite end, Figure 2 also shows that more advancedcountries are more likely to compete on natural and culturalresources, probably due to reduced differentiation forbusiness environment, ICT readiness and other aspectsassociated with higher levels of economic development.Favourable enabling environments and improvedinfrastructure that can be achieved through properlymanaged T&T-led development may translate intoincreased economic productivity and overall nationalcompetitiveness. Figure 3 (on page 6) shows therelationship between T&T competitiveness and the GlobalCompetitiveness Index 4.0 (GCI 4.0), which measuresthe set of institutions, policies and factors that determinean economy’s level of productivity. Because of sharedfoundations of competitiveness, there is a clear relationshipbetween T&T and general competitiveness. Consequently,pursuing T&T competitiveness through such foundationscan lead to a more productive economy, which in turn, maylead to reduced poverty levels, income and inequality.4Anticipating the tipping pointThe results of the 2019 TTCI that are presented andanalyzed in the following section of Part 1 indicate thatboth developing and developed nations have advancedin competitiveness, with improved scores in areas suchas price competitiveness, air transport infrastructure, ICTreadiness, T&T prioritization and international openness.And as Figure 1 shows, T&T competitiveness doesoften lead to substantial increases in travel and tourismdemand. Given the forecasted growth in T&T in thecoming decade, understanding the consequences andimpact of T&T competitiveness is important so that publicand private stakeholders can together design pathwaysfor sustainable management of the sector over time.5
The Travel and Tourism Competitiveness Report 2019Figure 3: Correlation between travel & tourism and overallcompetitivenessTTCI 2019 score (1–7 3220406080100GCI 4.0 2018 score (0–100 scale)Key High incomeUpper-middle incomeLower-middle incomeLow incomeSource: World Economic Forum, 2018 and 2019.For example, developing nations may be exposed to surgesin visitors that end up overwhelming local infrastructure,cause shortages in housing supply and degrade the verycultural and natural assets that attracted tourists in the firstplace. Thailand had to recently close down its famous MayaBay cove after a rise in visitors caused extensive ecologicaldamage.5 More developed economies, even with robustand reliable, air, road and port and T&T infrastructure, maynot adequately anticipate the impact that growing demandfor travel could have. As a result, certain destinations maybe ill prepared to deal with higher tourist numbers that area result of their competitiveness. In Italy—which ranks 10thfor tourist service infrastructure and 4th for natural andcultural resources—Venice has announced that it plansredirecting cruise ships away from the city’s central islands,following public discontent.6 Economies would be wise tobegin paying more attention to the role that digital demandfor natural and cultural tourism might play in our increasinglydigital societies. For instance, the top 10 economies forcultural and entertainment digital demand account fora third of the tourist arrivals among economies in thisyear’s rankings.7 While this does not prove that increaseddigital demand necessarily leads to more arrivals, it doesshow that trends in online searches often mirror trendsin numbers of visitors, especially on the upper end of theranking. Thus, it is vital that policy-makers pay attention tothese trends. Failure to adequately address issues relatedto rising tourism numbers has the potential to negativelyimpact future competitiveness, making nations victimsof their own success. Therefore, more research and datawill be required to measure when competitiveness leadsto diminishing returns and to understand the feedbackloops which may then drive down competitiveness. In the6meantime, strategies tied to dealing with rising tourismnumbers are already being developed. For instance, theUNWTO provides potential strategies for sustainabletourism in urban environments, which include promotingtime-based visitor dispersion, including during off-peakseasons, developing infrastructure with the needs of localsand tourists in mind, improving the monitoring of arrivals andsetting up platforms for discussions with local residents.8It is also imperative that countries balance their focuson T&T as one component of a diversified economicplan. While T&T is certainly a strong driver of economicdevelopment for a number of states, policy-makers andT&T businesses need to work hand in hand to make sureinvestment in T&T is shared with local communities andtakes into account future needs of the industry. Creatingan economy over-reliant on tourism that purely dependson natural and cultural resources and low-cost labourdoes not set a path for sustainable growth. The tourismindustry of the future will be technology-driven and relymore on skilled workforces.9 Decision-makers shouldtake care to integrate efforts to drive T&T competitivenesswithin a holistic economic strategy that balances the nearterm economic promises of the rapidly growing traveland tourism sector with consideration for the long-termresilience of its resources: human, natural and cultural.2019 Results and AnalysisGlobal resultsDespite trade tensions and nationalism crowding the news,global connectivity continues to advance, at least whenit comes to T&T. Enhanced air transport infrastructure,higher ICT readiness scores and improved internationalopenness all contribute to an industry that promotes, andtakes advantage of, the desire of modern citizens to engageand exchange culturally, economically and academically.The TTCI 2019 results show that out of the 132 economiescovered in both the 2019 and 2017 editions, 101 improvedtheir score. While mature, high-income economies continueto score higher on average, middle-income countriesshowed the greatest improvement in competitiveness, withthe subregions of Eurasia, the Balkans and Eastern Europe,South Asia and North Africa accounting for the greatestchanges. Despite these differences, steady improvementacross the board was observed. Across a broad rangeof economies, income segments and regions, improvedcompetitiveness can be attributed primarily to performanceon the following six pillars (a) Air Transport Infrastructure (b)ICT Readiness (c) Price Competitiveness, (d) InternationalOpenness (e) T&T Prioritization and (f) Safety and Security.Cheaper travel for allA significant part of the recent progress in T&Tcompetitiveness has come from enhanced air transportinfrastructure. Air Transport Infrastructure was the secondmost improved pillar in the index thanks to increased airlineservice offerings in the majority of countries, and risingroute capacity across the global network. Between 2015and 2018, scheduled available seat kilometres increased bynearly 30% for economies ranked in both the 2017 and 2019Explore additional features of the report at http://reports.weforum.org/ttcr
The Travel and Tourism Competitiveness Report 2019report editions. Moreover, flying and travel in general hasbeen made more affordable thanks to lower global fuel pricesand reduced ticket taxes and airport charges. In line withthese trends and the further democratization of travel, PriceCompetitiveness (pillar 8) has seen the most measurableimprovement of all the pillars over the last two years.Destinations going digitalHigher scores in ICT readiness indicate that technologyenabled connectivity continues to proliferate. ICTreadiness results have been bolstered by the risingnumber of individuals using the internet and mobile internetsubscriptions—a reminder of how important mobile serviceofferings will become for the T&T sector in the next fewyears. On average, the number of mobile broadbandinternet subscriptions per 100 people has climbed by morethan one-quarter since the 2017 report. As a result, morenations are now better positioned to take advantage of thegrowing popularity of online T&T service offerings, platforms,information distribution and marketing opportunities.Prioritizing the T&T sectorEconomies across the world are increasingly recognizingthe importance of T&T, demonstrated by a steadfast risein the Prioritization of T&T (pillar 6). This notable broadimprovement in T&T prioritization has been characterizedby more effective marketing and branding strategies,as competition—globally, regionally and even withinsubregions—for the growing number of tourists heatsup. Moreover, perceptions of government prioritization ofT&T rose as did government funding for the industry.Opening doors to safe and secure tourismThe improvement in International Openness (pillar 7) was ledby countries not classified as high-income, especially thoseeconomies that implemented policies related to the loweringof visa requirements. In particular, Middle East and NorthAfrica, Sub-Sharan Africa and Eurasia—areas historicallyknown for low levels of international openness—havecome closer to narrowing their gap with the global mean.In subregions like Eurasia, South America, Western Africaand the Middle East, growth in air travel and internationalopenness has coincided with enhanced safety and securityconditions, indicating that recent stabilization may havereduced traveller safety concerns. North Africa experienceda similar phenomenon with increased air travel and safetyand security conditions; however, reduced internationalopenness could potentially dampen the impact.Critical checkpoints for the industryDespite improvements across region, subregion and incomelevel, a number of challenges remain for the T&T industry.First, given the forecasted growth in T&T in the comingdecade, far more investment is required in infrastructurein order to build capacity to welcome more visitors whileadequately serving the needs of citizens. For example,despite the growth in air travel and openness, globalaverage perceptions of air transport infrastructure qualityhave improved at a far slower rate (at a global average1.4% and 0.4% for high-income economies since thelast report), and airport density statistics have fallen. Inaddition, while some progress has been made in improvingground and port infrastructure, especially in Asia-Pacific,Explore additional features of the report at http://reports.weforum.org/ttcrthe overall growth trend for Ground and Port Infrastructure(pillar 11) has been slower. Furthermore, from a globalperspective, perceptions of the quality and efficiency ofground transport infrastructure and services have onaverage remained near stagnant. Consequently, the riskof future air and ground transport bottlenecks is likely torise, hurting both the industry and local economies.Ensuring sustainable tourismThe preservation of natural and cultural resources is anotherchallenge the industry must overcome. Results show thatthe number of UNESCO cultural and natural sites, as wellas intangible cultural heritage listings, keeps growing,indicating greater commitment to preserving some of the keyattractions driving people to visit destinations. Encouragingly,Environmental Sustainability (pillar 9) scores have beenboosted by the increase in environmental treaty ratificationsand improved perceptions that T&T is being developed ina sustainable manner, all of which bodes well for naturalresources and nature-based tourism. While this is promising,the enforcement of treaties and protected lands might not beenough to preserve natural resources, given that air pollution,deforestation and species endangerment have continuedto rise over the last two years. Since the last edition of thereport, the global average score for perceptions of thestringency and enforcement of environmental regulationsimproved by just 0.4%. Sadly, these perceptions declined themost in Sub-Saharan Africa, a region that already strugglesto better utilize its natural assets. As a result, it is vital that T&Tstakeholders recognize their role in environmental protection,or they run the risk of losing out on future nature tourism.Performance by quartileTop 25%The top quartile (or top 35) of economies on the TTCIrankings dominate the industry, accounting for about 84%of global T&T GDP and nearly 70% of all international touristarrivals.10 All but six of them are high-income economies,20 are from Europe, 10 are from Asia-Pacific, four fromthe America’s and one (the United Arab Emirates) is fromthe Middle East and North Africa region. Typically, whatseparates this quartile from the others is how well manyof its members do across all pillars. The top 25% tendto greatly outscore the global average on all pillars apartfrom Price Competitiveness. The high concentration ofadvanced economies in the top quartile means that thisgroup is characterized by strong business environments,good safety and healthcare conditions and high ICTreadiness. They are also comparatively more open toreceiving international visitors than other countries. However,their greatest advantages come from well-developedinfrastructure and natural and cultural resources.The top 25% of scorers beat the global mean for air transportinfrastructure by an average of 54.1%. However, the quartilehas an even more impressive lead when it comes tocultural resources and business travel, at 73% above theglobal mean. Economies in this group have nearly 60% ofthe UNESCO World Cultural Heritage sites and host over75% of international association meetings. The CulturalResources and Business Travel pillar also exhibits the mostvariation in scores among the top 35 economies, makingit a key point of competition. China, Mexico, Malaysia,7
The Travel and Tourism Competitiveness Report 2019Figure 4: Pillar performance overview, 2019Pillar score (1–7 scale)7654321BusinessEnvironmentSafety &SecurityHealth &HygieneHumanResources &Labour Mkt.ICTReadinessPrioritizationof inabilityAirTransportInfrastructureGround& ralResourcesCult.Resources &Business TravelKey—————Global averageTop quartileSecond quartileThird quartileBottom quartileSource: World Economic Forum.Thailand, Brazil and India—which are not high-incomeeconomies but rank in the top 35 on the TTCI—stand outin this quartile through their combination of rich natural andcultural resources and strong price competitiveness.Due perhaps to its composition of the most mature T&Teconomies, the top quartile improved at a slower rate thanother groupings. Nonetheless, 29 of the top 35 economiesincreased in competitiveness since 2017. These increaseswere mostly due to improvements in T&T policy andenabling conditions and air transport infrastructure aswell as moderate gains in ICT readiness. The three mostimproved economies in this quartile are India (40th to 34th),Korea, Rep. (19th to 16th) and Denmark (31st to 21st).India showed the greatest percentage improvement to itsoverall TTCI score, which has helped it become the onlylower-middle income country in the top 35. Aside from theaforementioned high ranking of its natural and cultural assetsand price competitiveness, India also greatly improved itsbusiness environment (89th to 39th), overall T&T policy andenabling conditions (79th to 69th), infrastructure (58th to55th) and ICT readiness (112th to 105th). Of all the otherquartiles, the top 25% was the only one to improve itsaverage performance on the Business Environment pillar,with India, China (92nd to 53rd), and the United States(16th to 4th) showing the greatest percentage increases.The top 10 scoring economies remain unchanged,consisting—in descending order by global rank—ofSpain, France, Germany, Japan, the United States,the United Kingdom, Australia, Italy, Canada andSwitzerland. Of these, only the United Kingdom lost itsposition since 2017 (5th to 6th), switching places withthe more competitive United States (6th to 5th).8Middle 50%As one moves down the TTCI rankings into the middlehalf of economies (ranks 36–105), the variance betweenpillar scores begins to rise. Countries here consist of manyemerging market economies, with growing middle classesand tourism industries, and a selection of more developedeconomies that typically lack the numerous attractive naturaland cultural resources that the top scorers possess. Witha large concentration of less mature economies, countriesin the middle of the ranking score lower for businessenvironment, human resources and labour market and ICTreadiness, creating more obstacles for T&T operations andinvestment. Further, compared to the top 25% of scorers,middle-ranking economies trail in international openness andespecially in infrastructure and cultural and natural resources.On the other hand, price competitiveness does pick up.However, because of their emerging-market status,economies in this grouping offer higher rates of return forT&T investors willing to deal with less favourable enablingenvironments, especially as many of these economiesbecome more internationally open and investment ininfrastructure and destination assets improve. This isevidenced by TTCI results showing that the middle 50% hadthe greatest improvement in T&T competitiveness.Economies in the upper-middle quartile (ranks 36 to 70)have the greatest rates of improvement on air, ground andtourist infrastructure and price competitiveness. This quartiledoes include many economies that d
Competitiveness Index 4.0 (GCI 4.0), which measures the set of institutions, policies and factors that determine an economy's level of productivity. Because of shared foundations of competitiveness, there is a clear relationship between T&T and general competitiveness. Consequently, pursuing T&T competitiveness through such foundations
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