The World Travel & Tourism Council (WTTC) has reported a further “painful” drop in investment in the tourism sector last year but predicts an upturn in the next decade.
The global organisation highlighted the importance of attracting capital investment to enable post-Covid-19 growth in its Critical Factors to Attract Hotel Investment report released at the Sustainability and Investment Summit in San Juan, Puerto Rico on Wednesday.
The report says capital investment in the travel sector fell from $1.1 trillion in 2019 to $805 billion in 2020, representing an almost 25% drop.
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The WTTC said investment in the sector continued to decline in 2021 with a further 6.9% drop to $750 billion.
However, it forecast “strong growth” in travel and tourism investment over the next decade if goverenments create a “favourable enabling environment”.
Julia Simpson, WTTC chief executive, said: “Destinations must have a clear commitment and take a holistic approach to become resilient and competitive.
“As we recover from the pandemic and we build back better, investments not only need to benefit destinations economically, but more importantly, socially and environmentally.”
The report highlights the importance of governance and rule of law as a “key enabler for investors as it determines how easily and successfully a business operates”.
It adds that physical infrastructure and air and ground connectivity are also “crucial” to investment because well-connected hubs “support wider regional development” and “provide access to lesser-known destinations”.
The importance of re-skilling and up-skilling the workforce is also cited in the paper.