Global results
Despite trade tensions and nationalism crowding the news, global connectivity continues to advance, at least when it comes to T&T. Enhanced air transport infrastructure, higher ICT readiness scores and improved international openness all contribute to an industry that promotes, and takes advantage of, the desire of modern citizens to engage and exchange culturally, economically and academically. The TTCI 2019 results show that out of the 132 economies covered in both the 2019 and 2017 editions, 101 improved their score. While mature, high-income economies continue to score higher on average, middle-income countries showed the greatest improvement in competitiveness, with the subregions of Eurasia, the Balkans and Eastern Europe, South Asia and North Africa accounting for the greatest changes. Despite these differences, steady improvement across the board was observed. Across a broad range of economies, income segments and regions, improved competitiveness can be attributed primarily to performance on the following six pillars (a) Air Transport Infrastructure (b) ICT Readiness (c) Price Competitiveness, (d) International Openness (e) T&T Prioritization and (f) Safety and Security.
Cheaper travel for all
A significant part of the recent progress in T&T competitiveness has come from enhanced air transport infrastructure. Air Transport Infrastructure was the second-most improved pillar in the index thanks to increased airline service offerings in the majority of countries, and rising route capacity across the global network. Between 2015 and 2018, scheduled available seat kilometres increased by nearly 30% for economies ranked in both the 2017 and 2019 report editions. Moreover, flying and travel in general has been made more affordable thanks to lower global fuel prices and reduced ticket taxes and airport charges. In line with these trends and the further democratization of travel, Price Competitiveness (pillar 8) has seen the most measurable improvement of all the pillars over the last two years.
Destinations going digital
Higher scores in ICT readiness indicate that technology-enabled connectivity continues to proliferate. ICT readiness results have been bolstered by the rising number of individuals using the internet and mobile internet subscriptions—a reminder of how important mobile service offerings will become for the T&T sector in the next few years. On average, the number of mobile broadband internet subscriptions per 100 people has climbed by more than one-quarter since the 2017 report. As a result, more nations are now better positioned to take advantage of the growing popularity of online T&T service offerings, platforms, information distribution and marketing opportunities.
Prioritizing the T&T sector
Economies across the world are increasingly recognizing the importance of T&T, demonstrated by a steadfast rise in the Prioritization of T&T (pillar 6). This notable broad improvement in T&T prioritization has been characterized by more effective marketing and branding strategies, as competition—globally, regionally and even within subregions—for the growing number of tourists heats up. Moreover, perceptions of government prioritization of T&T rose as did government funding for the industry.
Opening doors to safe and secure tourism
The improvement in International Openness (pillar 7) was led by countries not classified as high-income, especially those economies that implemented policies related to the lowering of visa requirements. In particular, Middle East and North Africa, Sub-Sharan Africa and Eurasia—areas historically known for low levels of international openness—have come closer to narrowing their gap with the global mean. In subregions like Eurasia, South America, Western Africa and the Middle East, growth in air travel and international openness has coincided with enhanced safety and security conditions, indicating that recent stabilization may have reduced traveller safety concerns. North Africa experienced a similar phenomenon with increased air travel and safety and security conditions; however, reduced international openness could potentially dampen the impact.
Critical checkpoints for the industry
Despite improvements across region, subregion and income level, a number of challenges remain for the T&T industry. First, given the forecasted growth in T&T in the coming decade, far more investment is required in infrastructure in order to build capacity to welcome more visitors while adequately serving the needs of citizens. For example, despite the growth in air travel and openness, global average perceptions of air transport infrastructure quality have improved at a far slower rate (at a global average 1.4% and 0.4% for high-income economies since the last report), and airport density statistics have fallen. In addition, while some progress has been made in improving ground and port infrastructure, especially in Asia-Pacific, the overall growth trend for Ground and Port Infrastructure (pillar 11) has been slower. Furthermore, from a global perspective, perceptions of the quality and efficiency of ground transport infrastructure and services have on average remained near stagnant. Consequently, the risk of future air and ground transport bottlenecks is likely to rise, hurting both the industry and local economies.
Ensuring sustainable tourism
The preservation of natural and cultural resources is another challenge the industry must overcome. Results show that the number of UNESCO cultural and natural sites, as well as intangible cultural heritage listings, keeps growing, indicating greater commitment to preserving some of the key attractions driving people to visit destinations. Encouragingly, Environmental Sustainability (pillar 9) scores have been boosted by the increase in environmental treaty ratifications and improved perceptions that T&T is being developed in a sustainable manner, all of which bodes well for natural resources and nature-based tourism. While this is promising, the enforcement of treaties and protected lands might not be enough to preserve natural resources, given that air pollution, deforestation and species endangerment have continued to rise over the last two years. Since the last edition of the report, the global average score for perceptions of the stringency and enforcement of environmental regulations improved by just 0.4%. Sadly, these perceptions declined the most in Sub-Saharan Africa, a region that already struggles to better utilize its natural assets. As a result, it is vital that T&T stakeholders recognize their role in environmental protection, or they run the risk of losing out on future nature tourism.
Performance by quartile
Figure 4: Pillar performance overview, 2019
Source: World Economic Forum.
Top 25%
The top quartile (or top 35) of economies on the TTCI rankings dominate the industry, accounting for about 84% of global T&T GDP and nearly 70% of all international tourist arrivals.10 All but six of them are high-income economies, 20 are from Europe, 10 are from Asia-Pacific, four from the America’s and one (the United Arab Emirates) is from the Middle East and North Africa region. Typically, what separates this quartile from the others is how well many of its members do across all pillars. The top 25% tend to greatly outscore the global average on all pillars apart from Price Competitiveness. The high concentration of advanced economies in the top quartile means that this group is characterized by strong business environments, good safety and healthcare conditions and high ICT readiness. They are also comparatively more open to receiving international visitors than other countries. However, their greatest advantages come from well-developed infrastructure and natural and cultural resources.
The top 25% of scorers beat the global mean for air transport infrastructure by an average of 54.1%. However, the quartile has an even more impressive lead when it comes to cultural resources and business travel, at 73% above the global mean. Economies in this group have nearly 60% of the UNESCO World Cultural Heritage sites and host over 75% of international association meetings. The Cultural Resources and Business Travel pillar also exhibits the most variation in scores among the top 35 economies, making it a key point of competition. China, Mexico, Malaysia, Thailand, Brazil and India—which are not high-income economies but rank in the top 35 on the TTCI—stand out in this quartile through their combination of rich natural and cultural resources and strong price competitiveness.
Due perhaps to its composition of the most mature T&T economies, the top quartile improved at a slower rate than other groupings. Nonetheless, 29 of the top 35 economies increased in competitiveness since 2017. These increases were mostly due to improvements in T&T policy and enabling conditions and air transport infrastructure as well as moderate gains in ICT readiness. The three most improved 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 its overall TTCI score, which has helped it become the only lower-middle income country in the top 35. Aside from the aforementioned high ranking of its natural and cultural assets and price competitiveness, India also greatly improved its business environment (89th to 39th), overall T&T policy and enabling conditions (79th to 69th), infrastructure (58th to 55th) and ICT readiness (112th to 105th). Of all the other quartiles, the top 25% was the only one to improve its average 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—of Spain, France, Germany, Japan, the United States, the United Kingdom, Australia, Italy, Canada and Switzerland. Of these, only the United Kingdom lost its position since 2017 (5th to 6th), switching places with the more competitive United States (6th to 5th).
Middle 50%
As one moves down the TTCI rankings into the middle half of economies (ranks 36–105), the variance between pillar scores begins to rise. Countries here consist of many emerging market economies, with growing middle classes and tourism industries, and a selection of more developed economies that typically lack the numerous attractive natural and cultural resources that the top scorers possess. With a large concentration of less mature economies, countries in the middle of the ranking score lower for business environment, human resources and labour market and ICT readiness, creating more obstacles for T&T operations and investment. Further, compared to the top 25% of scorers, middle-ranking economies trail in international openness and especially 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 for T&T investors willing to deal with less favourable enabling environments, especially as many of these economies become more internationally open and investment in infrastructure and destination assets improve. This is evidenced by TTCI results showing that the middle 50% had the 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 and tourist infrastructure and price competitiveness. This quartile does include many economies that do have rich natural and cultural resources, but are held back by underdeveloped infrastructure, security concerns or policy or structural issues. For instance, Argentina, Peru, South Africa, Indonesia and Colombia all score in the top 20 on the Natural and Cultural Resources subindex, but none rank higher than 69th (Argentina) on the Enabling Environment subindex. Of the 35 economies that rank between 36th and 70th, 29 increased their overall T&T competitiveness. Egypt (74th to 65th), Montenegro (72nd to 67th) and Romania (68th to 56th) had the strongest percentage increase in TTCI scores, improving on most pillars. As previously noted, it was this quartile that outpaced the rest of the world when it comes to enhancement of overall infrastructure. Poland improved the most on air transport infrastructure (70th to 56th), Cyprus had the best growth on ground and port infrastructure (51st to 32nd) and Georgia had the biggest percentage rise on tourist service infrastructure (70th to 41st). For those countries ranked 71st to 105th, Serbia (95th to 83th), Albania (98th to 86th) and Ukraine (88th to 78th) experienced the most significant improvement in TTCI scores.
Bottom 25%
The bottom quartile consists mostly of low to lower-middle income economies, with 26 coming from Sub-Saharan Africa. Lower levels of economic development do translate into particularly poor competitive conditions for T&T. Even compared to the third-lowest quartile, the bottom 35 countries score significantly lower on most pillars—in particular, overall infrastructure, international openness, ICT readiness and health and hygiene. Also similar to the third-lowest quartile, nations in this group score below average for natural and cultural resources. As a result, the bottom 35 economies account for just 1.8% of T&T GDP and 2.5% of tourist arrivals of the economies ranked in this report.11
Though they’ve started from a low base, economies in this quartile did show improvement on T&T policy and enabling conditions, safety and security, ICT readiness, and air and ground infrastructure. They had the largest improvement on international openness, which is likely to lead to greater connectivity. Four of the 10 economies that showed the biggest reduction in visa requirements in the overall rankings are in Sub-Saharan Africa. Benin had the world’s largest drop in requirements (122nd to 7th), which contributed to the global TTCI’s greatest improvement on international openness in all 140 economies (133rd to 92nd). Bangladesh (125th to 120th), Pakistan (124th to 121st) and Lesotho (128th to 124th) led the quartile in overall growth in T&T competitiveness. However, all three still require substantial improvement in competitiveness to move up in rank and out of the bottom quartile.
Click to read further analysis in Travel & Tourism at a Tipping Point.