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Jan 01, 2017
Final Report - January 2015 1
January - 2015
Global Talent Trends and Issues for the Travel & Tourism Sector
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Global Talent Trends and Issues for the Travel & Tourism Sector
A report prepared by Oxford Economics for the World Travel & Tourism Council
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Foreword Introduction Human capital issues in context Talent demand-supply balance and enabling environment analysisEconomic cost impact of talent gaps and deficienciesAnnex AAnnex B Annex C Annex D
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ForewordThe World Travel & Tourism Council (WTTC) is the global authority on the economic and social contribution of Travel & Tourism. It promotes sustainable growth for the sector, working with governments and international institutions to create jobs, to drive exports and to generate prosperity.
Members are the Chairs, Presidents and Chief Executives of the worlds leading, private sector Travel & Tourism businesses. These Members bring specialist knowledge to guide government policy and decision-making, raising awareness of the importance of the sector as an economic generator of wealth.
Over the next ten years, WTTCs forecasts project that Travel & Tourism will contribute US$11 trillion (US$3.4 trillion directly) and support 347 million jobs around the world (126 million directly over 25 million more direct jobs than in 2013). The growth in Travel & Tourism employment, at over 4% per year for the next ten years, will bring about enormous development across the world. Our research shows however, that without the right policies in place now, some countries are likely to have large gaps that will make it difficult, if not impossible, for them to fulfil their growth potential.
WTTC is pleased to produce this report on Global Talent Trends and Issues for the Travel & Tourism Sector that for the first time, quantifies the scale of the Travel & Tourism talent problem. It highlights the economic impact that the HR challenge will have on the global economy if not addressed soon. It looks at the scale of the problem (the talent deficit) in 46 countries and then assesses how well placed these countries are (the enabling environment) to address the challenges they face. A combined ranking of the talent deficit and enabling environment highlights those countries where Travel & Tourism is most at risk from human capital issues over the next five to ten years, and those which will likely be able to manage future growth.
At a global level, the research shows that the industry is facing a shortfall of 14 million jobs that is equivalent to the population of Cambodia and stands to reduce its contribution to global GDP by US$ 610 billion over the next ten years, 5.8% less than our baseline forecasts.
This research also shows that Travel & Tourisms Human Capital challenges are significantly higher than those faced in other sectors, with 37 out of 46 countries showing a talent deficit or shortage in Travel & Tourism over the next ten years, compared with only 6 out of 46 for the economy as a whole.
The situation is more pressing at the lower educational attainment levels, i.e. unskilled labour, and the impacts will hit in the next five years. This is a problem which needs to be addressed now.
WTTC urges the industry both public and private sector to act now to address the anticipated talent shortage. Travel & Tourism has the power to create jobs across the economy - at different skills levels, for often marginalised sectors of society such as young people and women, and in areas where other opportunities are scarce. We are a people industry we depend on quality people to deliver a quality product and we need the right policies, programmes and partnerships in place to ensure that the workforce of the future knows about the opportunities in our sector, and has the appropriate skills and knowledge to support future growth.
In the years to come, progress in developing and retaining talent will require a much stronger and more co-ordinated effort between the private sector, educational establishments and government. WTTC and its Members will be at the forefront of this debate, discussion and action to ensure the continued strength of Travel & Tourism.
David ScowsillPresident & CEOWorld Travel & Tourism Council
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Travel & Tourism is one of the worlds largest economic sectors. Current global Travel & Tourism direct employment is over 100 million jobs (103 million jobs, 2014 forecast estimate1). Global Travel & Tourism direct employment is forecast to grow at a faster pace (2.0% pa) than most other major industries and the global economy employment average2. This is a result of a number of factors including the ongoing structural transformation from industry to services in advanced and emerging economies and the growth of the middle class globally resulting in changing consumer patterns favourable to Travel & Tourism. In fact, many countries have even more aspirational growth targets than assumed in the WTTC baseline scenario which would require Travel & Tourism direct employment to grow even faster. For some of these countries, given the analysis in this report, these aspirations will be very difficult to realise given the projected talent trend deficits.
1Source: WTTC annual economic impact research, March 2014 2Source: WTTC annual economic impact research, March 2014
3 In the long-run economy-wide growth projections are constrained by the economys long-run potential output, which depends, among other factors, on the long-run labour supply. Although sector-level demand projections are less directly constrained by overall labour supply on the general assumption that demand for labour will be met from within the wider economy labour pool.
The rapid pace and extent of change in global and national markets for talent will be significant across the economy as a whole and specifically for Travel & Tourism. The market for Travel & Tourism talent is already challenged with high staff turnover, competition with other industry sectors for the best people, and in some cases, adverse supply trends such as declining demographics. New regulations, new technology (which in some cases is squeezing out existing roles and creating demand for new roles), shifts in customer service preferences, changing visitor markets, as well as other industry drivers, all have the potential to transform the type of skills that employees in Travel & Tourism will need to possess in future and employers will need to train staff in.
Planning for and meeting future talent demand in Travel & Tourism is going to require companies and governments to implement and promote proactive and careful talent supply management policies and together with education, develop stronger and more coordinated talent efforts. A thriving Travel & Tourism sector will also require regular monitoring and projecting of talent demand, supply and imbalances to predict in advance any looming shortages.
Although there are many talent commonalities facing the Travel & Tourism globally, the talent environment is far from uniform across countries for demand, supply and imbalances, and the enabling talent environment. There is huge diversity across countries in terms of the general development and maturity of Travel & Tourism and the stage they are at in the sectors growth cycle. So an understanding of the talent picture for different countries is vital as a one-size fits all analytical picture and policy response will be incorrect and ineffective. Understanding the sectors outlook and issues will be crucial if Travel & Tourism is to realise its growth potential over the next decade.
It is against this backdrop that WTTC commissioned Oxford Economics, one of the worlds leading providers of global economic analysis, advice and models, to conduct this research on 46 countries. The countries are geographically diverse, encompass all of the worlds major economies and include countries such as Barbados, Morocco and Thailand where Travel & Tourism is a particularly important sector. The 46 countries account for 81% and 88% of direct world Travel & Tourism employment and GDP respectively.
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In practice and over the long-run, there is no guarantee that each countrys Travel & Tourism demand for talent will be met by its domestic supply (and external supply). Nor is it guaranteed that a countrys Travel & Tourism talent base will be compatible with the level of competitiveness needed to compete internationally and achieve the projected international demand growth.
The impacts of Travel & Tourism talent imbalances and deficiencies are listed below. These clearly demonstrate why talent issues are so important to the sectors growth sustainability and bottom-line.
Talent labour shortages, where many hard-to-fill vacancies go permanently unfilled, lead to below-potential employment levels and growth in the near-term and foregone investment and growth in the longer-term.
Talent vacancies, which in many cases may only be met by raising pay levels substantially