Europe Earns $2 Trillion From Travel Industry

Europe Earns $2 Trillion From Travel IndustryEurope Earns $2 Trillion From Travel Industry

Tourism in Europe generates more income than automotive manufacturing, chemicals manufacturing, banking, agriculture and mining, new research reveals.

The sector made a contribution of $2.1 trillion (€1.8 trillion) in 2014, according to the study by the World Travel & Tourism Council.

Travel and tourism’s contribution to Europe’s GDP, including its indirect and induced impacts, accounted for 9.2% of the continent’s GDP, making it the fourth largest sector of eight studied in the WTTC Benchmarking Europe Report.

The report compares travel and tourism to other sectors, which are considered to have similar breadth and global presence, across 26 countries, WTTC said in a press release.

It shows that the sector also sustained 9% of total employment in Europe last year, exceeding that of the financial services, banking, automotive manufacturing, chemicals manufacturing and mining.

Travel and tourism supported 35 million jobs, that is 1.5 times more than banking, 2.5 times more than automotive manufacturing and 2.6 times more than mining.

WTTC president and chief executive, David Scowsill, said: “This research demonstrates the huge importance of travel and tourism as an economic generator in Europe. Not only does the sector account for 9.2% of GDP, but it also supports one in 11 jobs in Europe.

“With the growth of the European economy, it is critical that governments and private companies step up together to ensure that the sector is able to build the infrastructure capacity to meet the future forecast volume of people.”

Scowsill noted that tourism is the second-fastest growing sector in Europe in terms of direct GDP after banking.

“Forecast to grow at 2.8% per annum over the next 10 years, the sector’s growth will outpace the global economy, which is estimated to increase by 1.9% per annum over the next decade,” he said.

  Green Industry

The report shows that it is possible to generate substantial revenues without relying on heavy, polluting industries.

Iran’s overreliance on petrodollars has tourism experts and economists alike worried about the future of the country’s economy and budding travel industry.

According to Afsaneh Shafiei, an economist at the Institute for Trade Studies and Research at the Ministry of Industries, Mines and Trade, it will take at least 12 months once all western-imposed sanctions are lifted and a minimum of $130 billion in investments just to be able to produce the same amount of oil Iran used to export prior to the sanctions regime.

“And once we reenter the international energy market, Iran’s oil exports will result in a 14% drop in prices,” she said at a tourism conference last month.

“So it is a mistake to think oil is going to remain our economy’s driving force.”

Citing its low level of import content and labor-intensive nature, Shafiei said tourism is “the obvious replacement for oil”, adding that every inbound tourist helps create nine jobs.

With 19 world heritage sites—the most of any Middle Eastern country—Iran is a melting pot of history. Officials are targeting 20 million tourists a year by 2025, but given the multitude of obstacles, namely the underdeveloped infrastructure, the goal seems too ambitious.