Apr 14 2012
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Investment in Saudi travel & tourism industry to reach SR29.5b in 10 years
Besides, the Saudi travel and tourism industry will continuously grow and is forecast to increase by 4.2 percent year-on-year to reach SR74.6 billion in 2022 (in constant 2011 prices), the WTTC) report said.
Saudi travel and tourism investment in 2011 was SR20.0 billion, or 4.8 percent of total investment, it added.
The industry's direct contribution to Kingdom's GDP is expected to rise by 3.1 percent in 2012 from SR48.1 billion (2.3 percent of total GDP) in 2011, the report noted.
The direct contribution of travel and tourism to GDP covers the "internal" spending on travel and tourism (total spending within a particular country on travel and tourism by residents and non-residents for business and leisure purposes) as well as government "individual" spending - spending by government on travel and tourism services directly linked to visitors, such as cultural (e.g. museums) or recreational (e.g. national parks).
On the other hand, the total contribution of Travel and Tourism to GDP is forecast to rise by 3.7 percent in 2012, and to rise by 4.1 percent pa to SR180.2 billion in 2022, from SR116.2 billion or 5.4 percent of GDP recorded in 2011, the report added.
The total contribution of travel and tourism includes its "wider impacts" (i.e. the indirect and induced impacts) on the economy.
The "indirect" contribution includes the GDP and jobs supported by spending on the industry, such as construction of new hotels and 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.
The "induced" contribution measures the GDP and jobs supported by the spending of those who are directly or indirectly employed by the travel and tourism industry.
The industry's direct contribution to job generation in the Kingdom is projected to represent 2.4 percent of total employment in 2022 from a 2.4 percent increase per annum seen in 2012, creating 318,000 jobs. In 2011, travel and tourism directly supported 234,500 jobs or 2.4 percent of total employment in the same year.
The total contribution of the industry to employment creation in the Kingdom would jump by 2.5 percent in 2012 to 539,000 jobs and rise by 2.7 percent per annum to 706,000 jobs in 2022 or representing 5.4 percent of total, the report said. It created 526,000 jobs in 2011 or 5.3 percent of total employment in the same year.
However, in visitor exports, the WTTC report forecast a drop of 4.1 percent in 2012 from what was achieved last year valued at SR37.4 billion or a 2.8 percent of total exports.
Yet, visitor exports were expected to grow by 2.6 percent per annum for the next 10 years to reach SR46.3 billion in 2022 or 2.7 percent of the Kingdom's total exports.
Globally, the industry will account for 328 million jobs, or 1 in every 10 jobs on the planet, David Scowsill, President and CEO, World Travel and Tourism Council, said in the report.
Travel and tourism continues to be one of the world's largest industries. The total impact of the industry means that, in 2011, it contributed 9 percent of global GDP, or a value of over $6 trillion, and accounted for 255 million jobs. Over the next 10 years this industry is expected to grow by an average of 4 percent annually, taking it to 10 percent of global GDP, or some $10 trillion.
Rising household incomes in emerging economies - not only the BRICs (Brazil, Russia, India and China) but increasingly across the rest of Southeast Asia and Latin America - will continue to fuel increased leisure demand. Similarly, growing international trade - particularly from emerging markets - will sustain business travel demand.
In developed economies, consumers are likely to remain cautious, especially in European countries where austerity programs are being implemented.
This means that we expect growth in travel and tourism's direct contribution to GDP to remain stable at 3 percent in 2012. "We expect the industry to generate directly over 2 million new jobs, with a 2 percent increase in visitor exports and 3.5 percent growth in investment over the year," Scowsill said.
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