Stakeholders in the tourism sector worldwide need to advocate for more diversified frameworks for tourism investments, which are currently concentrated in hotel infrastructure and mature regions, said Natalia Bayona, Executive Director of the World Tourism Organization (UNWTO).
She made these remarks during the opening ceremony of the 2nd edition of GTEF • Investment and Financing Conference held in Macau on Wednesday (today).
According to the UNWTO official, the accumulated foreign direct investment (FDI) in the global tourism sector amounted to US$175.5 billion in 2,415 greenfield projects between 2018 and 2022, creating a total of 388,000 jobs.
“The investments were heavily concentrated in mature regions,” Ms. Bayona said in her opening keynote. “We need to promote and diversify different investment frameworks… to empower emerging regions.”
The UNWTO data shows that the top five destinations for FDI in tourism over the past five years were the United States, the United Kingdom, Spain, Germany, and the United Arab Emirates. China and Portugal ranked eighth and ninth, respectively, in terms of receiving tourism FDI, with 79 projects and 58 projects, respectively, between 2018 and 2022.
“Job creation in tourism FDI was highest in Mexico, with an estimated 31,000 jobs, followed by China and Spain,” stated the UNWTO official.
She also emphasised that 66 percent of tourism FDI in the past five years was focused on hotel infrastructure, followed by 16 percent in technology and innovation, and 9 percent in entertainment offerings.
The tourism stakeholders worldwide should come up with more comprehensive new investment frameworks that underscore investments in talents, sustainability, innovation, and technology, Ms Bayona said.
Regarding the investment in talent, she said that 882,000 global tourism jobs per year would require vocational training from now until 2030. “Tourism is the most human economic sector,” she added.
The GTEF • Investment and Financing Conference is an initiative under the Global Tourism Economy Forum (GTEF), which is hosted by the Secretariat of Economy and Finance of the Macau SAR Government in collaboration with the UNWTO. The 10th edition of GTEF, including the Conference, is now taking place at the Galaxy International Convention Centre from Wednesday until Saturday (September 20-23) with the main forum kicking off on Thursday (tomorrow).
With the aim of engaging global financial leaders to identify business and investment opportunities in the tourism economy, the Conference this year, organised by GTEF in collaboration with Ivy Alliance Tourism Consulting Co. Ltd., focuses on the topic of “Innovative and Advanced Development – Embrace Tourism Investment and Cooperation in the Next Decade.”
During one of the panel sessions titled “Redefining Tourism Investments: From Private Equity to Venture Capital Acceleration” held on Wednesday, Inge Huijbrechts, Global Senior Vice President of the international hotel chain Radisson Hotel Group, underscored the importance of flexibility in tourism investments in the post-Covid era.
Given the new landscape of tourism following the COVID-19 pandemic, inflationary pressures in various jurisdictions, and other factors, Ms. Huijbrechts indicated that the traditional approach for hotel developers in previous investments “doesn’t work anymore in the current situation”.
“It’s getting more and more difficult for hotel developers to secure funds… and they need to look for flexible solutions,” she added.
For instance, her group has been involved in converting existing properties into hotel establishments, which requires less investment compared to starting from scratch, in recent times. “Our group recently opened a hotel in Milan, which is a conversion of a very famous office building,” she illustrated.