Tourism is an integral part of the world economy and its role in the global economic activity will only grow in the future. According to UNWTO, more than 1.4 billion people travelled in 2018 generating a staggering US$ 1.4 trillion in international tourism receipts. The employment opportunity the sector is generating is equally impressive. One in every 10 jobs are in the travel and tourism sector, and if we look at the employment opportunities created worldwide in the last five years, one in five jobs have been created in the tourism sector. By 2028, this is further expected to increase to a quarter of all jobs coming from the travel and tourism sector.
With the world tourism body UNWTO announcing India to be the host country for this year’s official celebration of World Tourism Day (WTD) on September 27 themed “Tourism and Jobs: A Better Future for All”, it could not have been more fitting as job creation is something on top of the governments’ agenda in every country. And not only does it create employment but also stimulates new investments in different sectors, creates revenues which leads to taxes and more.
The SATTE 2019 brought together an international panel of tourism veterans to discuss the theme. The session was moderated by Ashish Gupta, Consulting CEO, Federation of Associations of Indian Tourism and Hospitality (FAITH) and panelists were VK Duggal, Former Governor of Manipur and Mizoram; YB Tuan Muhammad Bakhtiar bin Wan Chik, Deputy Minister of Tourism, Arts and Culture, Malaysia; Eunji Tae, Officer, Regional Department for Asia and the Pacific, UNWTO and Subhash Goyal, Member, National Tourism Advisory Committee.
While laying the ground rules and asking the panelist to share their experiences and understanding of the co-relation between tourism and employment, Gupta asked the panelist to specifically focused on three things, that were, how can countries learn from other role models of increasing the indirect employment footprint around tourism? How can countries develop policies which ensure that tourism employment develop more product and becomes ingrained in the mainstream economy? And third, with so much of technology in terms of automation, self-drive and self-service, is that a threat to employment or can that be leveraged better?
Tourism & Jobs
For somebody who has closely watched the tourism sector in India grow and has spearheaded government’s drive to develop the sector in India, Duggal, while sharing his understanding of the sector, said, “Tourism is an all-encompassing activity. It touches the life of people across the board. As economies grow, as the spirit of travel grow, and which is growing continuously, in every field, be it technology, manufacturing or transport industry, tourism will continue to create new job opportunities like nobody’s business, especially in a country like India. Already probably tourism is the largest employer as far as women and youth are concerned.”
Tourism is an integral part of Malaysia’s economy contributing more than 14 per cent in GDP. Replying on his governments approach towards tourism’s role in employment and GDP contribution, Bakhtiar said, “One out of four people working in Malaysia are working in the travel tourism sector and altogether 3.4 million people are working in tourism. So, it is key to us to sustain this number. We are also getting stiff competition from neighbouring countries like Thailand, Vietnam and others because we are in the same neighbourhood. It is also important for us to come up with new products and promotion to sustain the number of tourists and hence the number of employment.”
Industry veteran Goyal added, “Tourism is one industry that’s creating millions of jobs. It’s a labour intensive sector and therefore very important for a country like India. And that’s why India has set a target to double the inbound arrival from 10 to 20 million in three years.
There is huge opportunity to channel tourism in creating rural employment, something all countries struggle with, “In case of Malaysia, the country is more about rural and community based tourism with products like clusters of eco-tourism divisions spread all over the country which are mainly catered by self-employed entrepreneurs running home-stays etc. in these rural areas and therefore not only help in creating rural employment, entrepreneurship and women empowerment but also help in mitigating migration to urban centers. Bakhtiar also pointed that tourism is not only one of the primary reasons of conservation and preservation efforts towards cultural heritage and monuments but also creates reasons for local crafts and artisans to revive and thrive and not to forget creating new employment opportunities for women and less privileged and semi-skilled.
An estimated seven million new jobs was created worldwide in the sector last year alone and close to 313 million jobs is related directly or indirectly to tourism. By 2028, Travel & Tourism is expected to support more than 400 million jobs globally. Most of the new jobs will come from some of the fastest developing tourism source markets like India and China, among others.
“By 2030, India is going to be the second largest economy in the world. With that comes the ambition or the desire to travel, not just within the country but all over the world. As the Indian economy grows, the bigger beneficiary will be the short and medium haul destinations like Dubai, Abu Dhabi, Malaysia, Singapore, Thailand, Korea, etc. driven by the spirit of adventure to try out niche activities like Golf and sports, and not just for weddings. And this in turn will continue to benefit new employment and job creations,” said Duggal.
Highlighting the role of some of the fastest growing tourism source markets like India, Goyal said, “More than 25 million Indians are travelling all over the world and are spending. They are the number one shoppers in Thailand, Malaysia, Singapore, Switzerland and London. These people are travelling in large numbers and with families and are spending a lot of money while travelling and shopping and are helping create lots of jobs in these places they are visiting. Even segments like Indian Wedding market that is more than just a few billion dollars, is going to destinations like Dubai, Spain, Malaysia, Thailand, Sri Lanka, France and elsewhere like Macao, and are contributing tremendously to the job creation and socio-economic upliftment in these destinations.”
There is no debating the fact that travel and tourism sector is not only a significant contributor to job creation, its role will only multiply in new job creation in coming years. If one in every nine people are employed in this sector today, in the coming years one in every four jobs will be created in this sector, which is absolutely staggering. However, challenges remain as the sustainability of these employments and talent retention has been some of the major issues the sector is grappling with. Tae says that the industry needs to look at this huge challenge and find out how it can sustain continuous growth of the industry with good talents.
“It’s not only about the big picture in our industry. No doubt, travel and tourism industry is very friendly for women and youth and also the minorities to enter the job market. But how sustainable is this? When we look at the figures that how long these employment will sustain after six months, the number is not so promising. How good are our retention at maintaining our talents? Australia will need 123,000 jobs by 2020 to sustain the industry. Canada says that by 2030 one quarter of a million jobs will be needed in the industry. But on the other hand, we are losing talents. In the Netherlands 70 per cent of the hotel graduate is leaving after six years of employment in the industry. Hong Kong, Australia say the same thing. Only 50 per cent of the hospitality graduate will stay and develop their career within the sector. What’s wrong? There is a huge gap between what industry needs and what our talents are. We need to address these issues. It is good that tourism is creating employment but we are not really good and succeeding in retaining our talents. Without talent without good leaders, there is no success in the future,” Tae said.
To overcome the challenge of sustaining trained manpower, Bakhtiar suggested that diversifying tourism offerings and having rural tourism products with facilities like homestays that involves ordinary people and making them stakeholders of tourism can help mitigate the demand of highly skilled and huge number of trained manpower. He added that sustaining the tourism number and ensuring that they travel to rural areas where there are quality products like homestays can ease the demand of trained and skilled manpower in organized industry like hotels. While at the same time, it can help generate quality economic activity and entrepreneurship at the local level leveraging technology. Citing examples of Malaysia’s success with homestays and how they have become popular with all kind of tourist and are also getting good online reviews. Malaysia today boasts of more than 50,000 home stayowners.
He also pointed that destinations will need to continue to explore and develop tourism source markets. He said that despite China producing 135 million outbound travelers last year, only 7 per cent of about 1.4 billion Chinese have passports, indicating untapped potential in the Chinese market.
Technology has become an integral part of almost every aspect of society and in the business world. Different sectors are increasingly becoming more and more reliant on technology. And when it comes to travel and tourism, technological footprints far exceeds its impact and disruptions than its role in other sectors. Disruption is the new norm in the travel and tourism industry. Two of the biggest disruptors, Airbnb and Uber, in the past decade have both come from travel and tourism sector and have forever changed the accommodation and transportation landscapes. Technology is continued to be viewed with mixed optimism.
The most recent disruptors are the Airbnb, Uber and the likes who have created a lot of unease amongst the traditional businesses. The recent spat between the brick and mortar travel agents, hotel owners and OTAs and aggregators like MakeMyTrip, Yatra, OYO, and the likes, in India, is just one example in this part of the world. Are these technology unicorns threatening new businesses and jobs? How should that be viewed?
Acknowledging that there is a problem as the governments are not yet ready to put in right policies in place, UNWTO’s Tae, said that we cannot just deny the new tendency and pattern as to what the consumer wants as the travellers demography is also changing and more and more young people are travelling. We cannot just deny rural stays and home stays to be distributed through platforms like Airbnb. She said that in the absence of any significant policy guidelines and frameworks, the new technology driven entrepreneurs are creating a market and making a profit out of it and this cannot be stopped. “The industry needs to work together to solve this and this is the responsibility of the international community and the member states (Of UNWTO) to learn fast and quickly and come up with the right guidelines and policy framework,” she insisted. Tae also pointed that there are a number of good case studies in this regard from countries across the world that can be accessed and learnt from.
Duggal suggests TIP (Technology, Innovation and Patience) recipe that he says will hold the industry, as well as new aspirants in the travel and tourism sector, in good stead. Sharing his experiences in the government while arguing that technology is an enabler and not a threat, Duggal said, “When I was DG Tourism we sent a proposal to Home Ministry for giving visa on arrival. Those were difficult days as we had World Trade Centre attack in the US and other terrorist activities elsewhere. So the Home Ministry said no. And as career moved, I myself became Union Home Secretary. And I invited the Tourism Ministry to send the proposal. I will identify the country where there is no fear of incursions or anything and I gave okay to 16 countries around the world who can avail VoA. Now, this was 13-14 years ago and today we have e-Visa for 160 countries. Now this is the gift of technology. And one of the major beneficiary of technology has to be travel and tourism industry.”
The key take away were to develop greater understanding between the industry and policy makers. New products need to be introduced in order to create new growth and employment opportunities, especially true for creating rural employment and entrepreneurship and mitigating migration towards already congested urban centers. Industry and government need to work together to not only create healthy growth opportunity for tourism in the country, but also to develop policy guidelines and framework to create equitable growth opportunity for all especially in the light of the disruptions by the technology driven enterprises. And most importantly, as Gupta said, “To ensure that tourism must not be outcome based but should be based on long term sustainability criteria.”