Contribution of neglected tourism sector to Bangladesh economy is rising

- Raquib Siddiqi01 Jan, 2020 | 777 Views|-+
Dhaka : The contribution of travel and tourism to Bangladesh economy is currently healthy and forecast to be higher in future. This is despite neglect of tourism in country's development priorities.

As one of the world's largest economic sectors, Travel and Tourism creates jobs, drives exports and generates prosperity across the world. In the annual analysis of the global economic impact of Travel and Tourism of World Travel and Tourism Council (WTTC), the sector is shown to account for 10.4 per cent of global GDP and 313 million jobs, or 9.9 per cent of total employment, in 2017.

For over 25 years, the WTTC has been providing evidence quantifying the economic and employment impact of Travel and Tourism on different countries.

The WTTC 2018 Annual Economic Reports cover 185 countries and 25 regions of the world, providing the necessary data on 2017 performance as well as unique 10-year forecasts on the sector's potential.

Bangladesh scene

Gloria Guevara Manzo, President and CEO, WTTC recently said, "Inclusive growth and ensuring a future with quality jobs are the concerns of governments everywhere. Travel and Tourism, which already supports one in every ten jobs on the planet, is a dynamic engine of employment opportunity." Unfortunately, however, this truth is yet to be recognised in Bangladesh.

The development planner of Bangladesh has this far ignored the importance of travel and tourism sector in the economic development of the country. They are yet to accept the truth, that travel and tourism is an important economic activity in most of the countries in the world. Bangladesh can also be enormously benefitted from direct, indirect and induced economic impact, if travel and tourism become an importance component of economic development.

Yet research of WTTC for 2018 has found tourism in Bangladesh on growth path and it's contribution to economy is rising.

The research findings of the WTTC for 2018 as well as projection up to 2028 carry solid proof of the potential of travel and tourism sector in economic development of the country.

Rising contribution

According to WTTC report, despite lack of proper government attention, the sector has made progress and making healthy contribution to Gross Domestic Product (GDP). This contribution is forecast to grow in future.

Travel and tourism's contribution to GDP

The direct contribution of Travel and Tourism to GDP in 2017 was BDT 427.5bn (2.2 per cent of GDP). This is forecast to rise by 6.1 per cent to BDT 453.5bn in 2018. This primarily reflects the economic activity generated by industries such as hotels, travel agents, airlines and other passenger transportation services (excluding commuter services). But it also includes, for example, the activities of the restaurant and leisure industries directly supported by tourists.

The direct contribution of Travel and Tourism to GDP is expected to grow by 6.2 per cent pa to BDT 824.0bn (2.1 per cent of GDP) by 2028.

The total contribution of Travel and Tourism to GDP (including wider effects from investment, the supply chain and induced income impacts) was BDT 850.7bn in 2017 (4.3 per cent of GDP) and is expected to grow by 6.4 per cent to BDT 905.5bn (4.3 per cent of GDP) in 2018.

It is forecast to rise by 6.8 per cent pa to BDT 1,753.1bn by 2028 (4.6 per cent of GDP).

Travel and tourism's contribution to employment

Travel and Tourism generated 1,178,500 jobs directly in 2017 (1.8 per cent of total employment) and this is forecast to grow by 3.0 per cent in 2018 to 1,214,000 (1.9 per cent of total employment). This includes employment by hotels, travel agents, airlines and other passenger transportation services (excluding commuter services). It also includes, for example, the activities of the restaurant and leisure industries directly supported by tourists.

By 2028, Travel and Tourism will account for 1,648,000 jobs directly, an increase of 3.1 percent pa over the next ten years.

The total contribution of Travel and Tourism to employment (including wider effects from investment, the supply chain and induced income impacts) was 2,432,000 jobs in 2017 (3.8 per cent of total employment). This is forecast to raise by 2.5 per cent in 2018 to 2,492,500 jobs (3.8 per cent of total employment).

By 2028, Travel and Tourism is forecast to support 3,244,000 jobs (4.2 per cent of total employment), an increase of 2.7 per cent pa over the period.

Visitor exports

Visitor exports are a key component of the direct contribution of Travel and Tourism. In 2017, Bangladesh generated BDT 18.4bn in visitor exports. In 2018, this is expected to grow by 6.3 per cent, and the country is expected to attract 209,000 international tourist arrivals.

By 2028, international tourist arrivals are forecast to total 293,000, generating expenditure of BDT35.8bn, an increase of 6.2 per cent pa.

Investment

Travel and Tourism is expected to have attracted capital investment of BDT83.0bn in 2017. This is expected to rise by 8.0 per cent in 2018, and rise by 6.1 per cent pa over the next ten years to BDT 161.8bn in 2028.

Travel and Tourism's share of total national investment will rise from 1.4 per cent in 2018 to 1.5 per cent in 2028.

Different components of travel and tourism

Leisure travel spending (inbound and domestic) generated 85.2 per cent of direct Travel and Tourism GDP in 2017 (BDT 596.9bn) compared with 14.8 per cent for business travel spending (BDT 104.1bn).

Leisure travel spending is expected to grow by 6.4 per cent in 2018 to BDT 635.0bn, and rise by 6.2 per cent pa to BDT 1,161.5bn in 2028.

Business travel spending is expected to grow by 6.1 per cent in 2018 to BDT 110.5bn, and rise by 5.4 per cent pa to BDT 186.3bn in 2028.

Domestic travel spending generated 97.4 per cent of direct Travel and Tourism GDP in 2017 compared with 2.6 per cent for visitor exports (ie foreign visitor spending or international tourism receipts).

Domestic travel spending is expected to grow by 6.3 per cent in 2018 to BDT 725.9bn, and rise by 6.1 per cent pa to BDT 1, 311.9bn in 2028.

Visitor exports are expected to grow by 6.3 per cent in 2018 to BDT 19.5bn, and rise by 6.2 per cent pa to BDT35.8bn in 2028.

Defining the economic contribution of travel and tourism

Travel and Tourism is an important economic activity in most countries around the world. As well as its direct economic impact, the industry has significant indirect and induced impacts. The UN Statistics Division-approved Tourism Satellite Accounting methodology (TSA: RMF 2008) quantifies only the direct contribution of Travel and Tourism. But WTTC recognises that Travel and Tourism's total contribution is much greater, and aims to capture its indirect and induced impacts through its annual research.

Direct contribution

The direct contribution of Travel and Tourism to GDP reflects 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 (eg museums) or recreational (eg national parks).

The direct contribution of Travel and Tourism to GDP is calculated to be consistent with the output, as expressed in National Accounting, of tourism-characteristic sectors such as hotels, airlines, airports, travel agents and leisure and recreation services that deal directly with tourists. The direct contribution of Travel and Tourism to GDP is calculated from total internal spending by 'netting out' the purchases made by the different tourism sectors. This measure is consistent with the definition of Tourism GDP, specified in the 2008 Tourism Satellite Account: Recommended Methodological Framework (TSA: RMF 2008).

The total contribution of Travel and Tourism includes its 'wider impacts' (ie the indirect and induced impacts) on the economy. The 'indirect' contribution includes the GDP and jobs supported by:

Travel and Tourism investment spending - 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;

Government 'collective' spending - which helps Travel and Tourism activity in many different ways as it is made on behalf of the 'community at large' - eg tourism marketing and promotion, aviation, administration, security services, resort area security services, resort area sanitation services, etc

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.

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