Travel and tourism directly contributed to 14.7 per cent of GDP last year, placing Malta 13th worldwide when measuring the importance of the sector to the economy.
The figure emerges from a report by the World Travel and Tourism Council, which is forecasting a four per cent increase in the sector’s GDP contribution by the end of this year.
Input from travel and tourism is estimated to total €1.2 billion this year.
This primarily reflects the economic activity generated by industries such as hotels, travel agents, airlines and other passenger transportation services.
It also includes the activities of the restaurant and leisure industries and reflects government spending on services directly linked to visitors, such as cultural or recreational.
Travel and tourism generated 28,000 direct jobs in 2014, accounting for 16 per cent of total employment, which is forecast to grow by 2.2 per cent this year to 28,500. By 2025, the sector will account for 37,000 direct jobs, the council predicted.
Travel and tourism generated 28,000 direct jobs in 2014
Meanwhile, the total contribution of the travel and tourism sector, including indirect impact, to the GDP stood at 28.1 per cent last year – a figure predicted to rise by 2.7 per cent this year. The council is forecasting a 3.4 per cent yearly increase, which would mean the sector will make up 32.7 per cent of GDP by 2025.
The indirect contribution includes the GDP and jobs supported by travel and tourism investment spending.
This is an important aspect of both current and future activity that includes investment activity such as the purchase of new aircraft and construction of new hotels and government spending related to tourism marketing and promotion, aviation, administration, security services, resort area security and sanitation services.
The total contribution to the GDP also includes domestic purchases of goods and services by the sectors dealing directly with tourists – including, for example, purchases of food and cleaning services by hotels, of fuel and catering services by airlines, and IT services by travel agents.
On a global level, the sector faces challenges every year and this year is likely to be no different, the council’s report says.
The weakness and potential volatility of many currencies against the US dollar and a deep recession in Russia, a key outbound market, will slow outbound spending in line with slower world trade overall in 2015.
However, falling oil prices will bring significant improvements for net oil importers in 2015, easing upward pressure on living costs, increasing disposable household incomes and domestic consumer spending, and lowering air fares.
New destinations and investment opportunities will also continue to emerge as tourism becomes increasingly affordable across the developing world.
This growth will require countries to adopt a concerted and coordinated approach to talent planning and development between their industry, governments and educational institutions to ensure they fulfil their potential in the years ahead.
In numbers
• 14.7% - the sector’s direct contribution the GDP in 2014.
• 13 – Malta’s ranking out of 184 counties worldwide for tourism’s direct contribution to economy.
• 90.7% – leisure travel spending accounted for the bulk of direct travel and tourism GDP last year.
• 51,000 – jobs generated by travel and tourism last year.
• 62,000 – jobs expected in 2025.
• €1.3 billion – money spent by foreign visitors to Malta.