The Future of Global Tourism

The global financial disaster seems to have been created by individuals with too much unregulated power manipulating the American financial markets. As the world economy adjusts and evolves in response to it, it only makes sense that some locations on the planet will weather the storm better than others.

Ground Zero, the United States of America, faces severe uphill battles to maintain its global dominance; the difference in global wages, the lack of cheap energy sources and a mistrusting Muslim world in charge of the lion’s share of oil, talk by some major world powers to drop the dollar and create a new global currency to purchase oil, terrorism threats, burgeoning health care costs, water shortages in the west, the massive drug cartels penetrating its borders, gang wars, the immigration controversy, unemployment, and a devaluing dollar. Right wing people say the US now has an idealistic left-wing president that wants to spend by borrowing money in the trillions of dollars, increasingly surrounding himself with unelected socialist czars while financing two costly (no end in sight) wars. And perhaps the American future is hinged upon by an education system that is losing ground to many developed and developing nations. Some investors are starting to think the writing may be on the wall, and if they could get liquidity, they’d be out of there.

Other developed nations, Europe, Canada, Australia, Russia, South Africa, Japan, Korea, even the Middle East share to a lesser degree the above mentioned problems, and are feeling the global economic bite.

In the poorest of the poor nations, with their dwindling resources to begin with, desertification, lack of clean water and arable land, and little opportunity to advance, any improvements in say, agricultural techniques is quickly eroded by their explosive populations, and now they are losing further ground cut off from much of the development aid richer countries once sent.

But for every losing country, there is another one starting to gain the upper hand. It would make sense that the ‘gainers’ will be those developing countries that finally have an opportunity to compete for more global resources and copy technologies traditionally developed and produced in the First World countries, especially as the planet gets smaller with advanced transportation and telecommunications.

So what assets would a country presently have so it would feel the global recession the least, recover the quickest, and reach a point of long-term sustainability? Though no one country has it all, perhaps rich soils and a pleasant year-round growing season and sufficient rainfall so it could feed its population, regardless of what happens elsewhere on the planet. It would be best if the country has little dependence on foreign oil, and/or it is able to generate its own renewable energy. A country that is not climate-challenged, and has ample fresh water would be a real asset. It needs an educated yet underpaid population wanting to advance themselves and seek the good life. Existing reliable telecommunications and workable infrastructure, and not too far from the major global markets would help. Certainly a country needs to offer relative security to its citizens, corruption is punished, and investments are fairly taxed and protected. Ideally it should have a freely elected benevolent government that allows and encourages innovations and free enterprise to prevail. The country should be is at peace with the world, a team player in global issues, open-minded to different cultures and religions, and nobody is grinding an axe for it. And lastly, it would attract educated quality visitors from around the globe who have done their homework, and are seeking some combination of outstanding scenery; warm beaches; humid rainforests; teeming wildlife; historic sites; sports facilities; ancient ruins; kind, happy people; and a sustainable eco-friendly experience.

All of the above point to stability, which encourages foreign investment. Perhaps developing nations like China, India and especially Latin America may be on the winning side of the equation.

Tourism is the planet’s largest industry generating over half a trillion dollars annually. Tourism allows a country to show itself off, and is a precursor that will attract off-shore commercial and residential investment.

Is international tourism going to become less and less affordable until this recession is behind us? I doubt it. Where many people in the first world have moved into survival mode, fighting to keep their job, taking salary cuts, cutting back on luxuries, to many people travel and vacations are an annual right of passage. They will forfeit other luxuries and even some necessities to take their vacation. They work hard fifty weeks a year to afford an exotic two week vacation.

There will always be those who can afford to travel at will. It could be those who have enough of a financial cushion to outlast the recession, or those who positioned themselves in growing industries. It could be those who took advantage of global wage inequities and moved their companies where labor is cheaper. It could be the nouveau riche being created daily in the developing nations. For example, today there as many Chinese nationals as Americans who can afford to fly on their next vacation.

Over the last decade, the oil-rich Arab states have spent hundreds of billions of dollars on commercial aircraft. Does anyone think they are just going to let them sit on the ground becoming obsolete? Controlling the price and production of oil, it is only logical the Arabs will drop air fares to where they keep their fleets in the air.

In the last edition of the UNWTO Barometer of World Tourism, the drop in international tourism appears to have bottomed out. Globally, international tourist arrivals fell seven percent in 2009 between January and August, but this drop has eased over the last few of months. Coupling this with other economic data confirms UNWTO’s first forecast indicating a five percent decline in international traveler’s arrivals for all of 2009. One astonishing point to note in the same report was that Central and South American tourist arrivals were up .2% over the same period. In 2010, UNWTO now expects to see moderate global tourism growth.

According to www.peopleandplanet.net just over 50% of all tourism spending up to 2008 was by travelers from only ten countries, Germany, U.S.A., the UK, France, Japan, China, Canada, Italy, the Russian Federation and South Korea, but this will likely change in the aftermath of the recession as some countries advance while others decline.

Prior to the 2008 global financial crisis, future tourism projections pointed to increases across the board, however certain areas such as the UAE in the Middle East, particularly Dubai and Abu Dhabi, S.E. Asia, east Asia, and the South Pacific had the highest increase projections, averaging over 10% annually. These areas where followed by Central and South America projected to increase around 7% per annum. With the global recession, one can only predict that when international tourism starts to increase again, these areas will do even better than earlier predictions. The reason being, America and Europe and other traditionally First World nations will be hit the hardest with the recession because of global equalizing of economies. The break out winners will be the developing nations like China, India, S.E Asia and Latin America where the nouveau riche will have disposable money for travel, and will visit their nearest parts of their world first.

However, within five or ten years, tourism in the Asia Pacific Rim region will start to experience problems of its own. Much of the region is already heavily populated with the underprivileged as they watch their prime scenic areas exploited for tourist dollars. Indigenous peoples will be displaced to secondary locations, socio-economic, cultural and ecological problems will fester as the widening gap between the rich and poor becomes more apparent. Crime and prostitution tend to feed off of tourists. Uncontrolled growth in tourism facilities permitted by corruption and ignorance will mean profits from the tourism activities will be repatriated to corporate headquarters in China or wherever investors reside, while the local population is relegated to subservient (dishwashing and maid) positions with little upward mobility. This is not sustainable tourism.

As the global money players forecast, predict and adjust their investment portfolios positioning themselves to recover or actually benefit from the recession, can you name a better, more experienced, more sustainable and more opportunity-laden country on the planet than Costa Rica? I can’t!

Eric Robinson
Owner
Adventure Inn
San Jose / Airport
Costa Rica

One thought on “The Future of Global Tourism”

  1. Our current state of affairs in this world are completely out of line with our true nature. We should have ample time and resources to discover an enjoy the true beauty that comes with a vacation to a wonderful country such as Costa Rica.
    It is a shame that the politics of our times has overshadowed one of the most fundamental aspects of life that would be getting away from the regular grind.
    What else do the regular workers of this world have to sacrifice for one of the most simplest pleasures in life, that is a vacation destination like Costa Rica.
    Thank you for your insightful article.

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