Travel and Wellness Are Forecast to Dramatically Outperform Global Economy in Next Decade (With No End in Sight for Ultra-Premium Market)
By Thierry Malleret, economist
The World Travel and Tourism Council recently made bold predictions: global tourism will become a $15.5 trillion industry over the next 10 years, when it will account for 12% of the global economy (a 50% increase from 2019) and employ 430 million people–or one in every nine jobs worldwide! If economists prove correct, tourism, like the wellness market, will grow at about twice the rate of the global economy: more than 5% per year versus 2.6% per year for global GDP growth. This would represent a remarkable outperformance. A word of caution: the climate crisis and the world’s geopolitical fragmentation constitute two significant headwinds for tourism/wellness travel component.
Malleret interprets the numbers and argues that there seems to be no end in sight for the “ultra-premiumization” trend in travel/wellness travel: from Accor’s new Orient Express, where suites cost $3,200-$6,400 a night to the uber-luxury cruise liners announced by Ritz-Carlton, Aman and Four Seasons.
IS TRAVEL IMMUNE FROM ECONOMIC TRAVAILS? LIKE WELLNESS?
Economic forecasts always need to be taken with a pinch of salt, particularly when numbers emanate from an industry association or advocacy group, as in the new numbers from the World Travel and Tourism Council (WTTC). They estimate that global travel and tourism will become a $15.5 trillion industry over the next 10 years, when it will account for roughly 12% of the global economy (a 50% increase compared to 2019) and employ around 430 million people (compared with 334 million in 2019). A stunning one of every nine jobs globally would therefore be in travel and tourism!
This expansion matters a great deal to the wellness industry because so much of it is intertwined with travel and tourism. Wellness tourism in the pandemic year of 2020 was still a $436 billion market. This type of tourism impacts so many other wellness sectors, like wellness real estate owned or rented abroad, or fitness enjoyed while traveling. All very good news for wellness.
In the coming years, if economists prove to be correct, travel and tourism, like wellness, will grow at about twice the rate of the global economy: 5% and a bit per year versus 2.6% per year for global GDP growth. This would represent a remarkable outperformance. A word of caution: the climate crisis and the world’s geopolitical fragmentation constitute two significant headwinds for travel and tourism and their wellness component.
LUXURY AND PREMIUM BECOMING EVER-MORE ULTRA:
Within the tourism market, both ultra-high-end and wellness travel are seeing big investments and spending. We keep banging on about the wider premiumization/personalization trend, and this enduring, secular theme leaves little place for any in-between mid-market business offerings. You are either at the low end and you strive to reap the benefits of low margins at scale, or you are at the capital-intensive high end where scaling is difficult, but margins are very substantial. There seems to be no end in sight in the so-called “ultra-premiumization” pursuit with large companies increasingly embracing ultra-luxury travel and wellness.
Accor’s new Orient Express (where suites will cost $3,200-$6,400 a night) or the luxury cruise liners announced by Ritz-Carlton, Aman and Four Seasons are proof of that. Deloitte projects that the global luxury travel market will reach $2 trillion in the next five years.
All-New Data on the Global Wellness Economy Coming November 7
In the year 2020, the GWI found that the world wellness economy was worth $4.4 trillion. Where has the market gone since we’ve emerged from the pandemic? Mark your calendars for November 7, when GWI researchers will unveil all new global and regional data for all 11 sectors of the wellness economy on Day One of the Global Wellness Summit in Doha, Qatar.