branch supplies all the activities of the value chain of tourists. Therefore, the tourist industry is divided into several specialized industries, such as tour operators, travel agencies, airlines, hotels, restaurants, and attractions. Many related industries provide food, technology and other goods needed to run a tourist business, including a reliable infrastructure and other general preconditions to make life easy for tourists and industry.
In this context, we shall concentrate on the tourism industry. The secondary and wider economic results of tourism, called the ‘tourist economy’ of tourism, will be included only to a minor degree. The line between the primary and secondary economic dimension of tourism is not easily drawn. What is mostly dependent on tourism, whether supplying end-users or other businesses, will be included in the tourism industry.
To begin with, the historic and current size and growth of world tourism will be outlined.
Global Tourism
The International Tourism
Since the Second World War, tourism has grown substantially. Although many take domestic vacations, growth has been strongest in international tourism.3 The number of international arrivals has increased from 25 million in 1950 to more than 800 million in 2005, corresponding to an annual growth rate of 6.5 percent (Figure 1). And international tourism is projected to keep on growing in the future. Having passed 900 million international travelers in 2007, it is predicted to reach 1.6 billion in 2020.
FIGURE 1 International Tourist Arrivals in Millions, 1950-2005
Source: UNWTO. Historical Perspective of World Tourism.
Even though their share has been declining, Western Europe and North America, mainly USA, have dominated international travel up till now. Western Europe and USA were the main tourist-receiving regions with a joint market share of approximately 90 percent in 1950, 75 percent in 1990, 70 percent in 2000 and 65 percent in 2005. And they spent a similar share of total international revenues, rising from $2 bn in 1950, $18 bn in 1970, $270 bn in 1990, $482 bn in 2000, $683 bn in 2005, and almost $800 bn in 2007. Western Europe comprised more than three quarters of Western arrivals and revenues. If travels across states had been recorded as international arrivals, the US would have reached the same level as Western Europe and if Western Europe was considered one country, international travel would be reduced to half. Today, half the international arrivals and thereby tourism revenues are in Western Europe. Western decline is just relative, because more and more people travel within or to Western Europe and North America. However, international arrivals and revenues in the rest of the world, in particular Asia and the Pacific, have been growing faster than in Western Europe and North America. While Western Europe comprises half of the international arrivals and revenues, most of the other half is equally divided between North America and Asia Pacific.
FIGURE 2 The Largest Tourist Incoming and Outgoing Countries in $bn, 2004
Source: UNWTO. Facts and Figures. Newer data are not available.
At country level, USA has the largest number of incoming and outgoing tourists and tourist spending, followed by Germany, China and Japan (Figure 2). Spain, France and Italy are next in line. In some countries more tourists are coming in than going out, particularly Spain and to some degree France and Italy, and further down the line Turkey and Greece. The reverse is the case in other countries, in particular Germany, UK, China and Japan, while in the USA outgoing and incoming tourists are almost at the same level. Germans and Britons are those who travel most internationally, followed by the Dutch and the Danes. Per capita, they spend more money on traveling than other countries, which results in a travel deficit. The main destination is to the sunshine of Southern Europe. A similar traveling pattern is seen in North America and Asia.
The fifteen nationalities which travel most comprise almost half of all incoming travels and two-thirds of all outgoing travel. Furthermore, 80 percent of all international travel in both 1990 and 2005 took place within the same regions. North Americans travel mainly across the borders of USA and Canada and USA and Mexico, and West Europeans cross borders to other countries in the region. The same is the case in Asia Pacific.
The Global Tourism Economy and Industry
Statistics
While it is not too difficult to measure the amount of international travel, it is more complicated to determine the economic significance of tourism. Tourist demands are met by a number of separate industries dealing with transportation, accommodation, catering, attractions, etc. Because national statistics only measure revenues at total trade level, they do not reveal who buys the goods. To make a national tourist account, it is necessary to extract the relevant parts from several trade or industry statements and methods to do so have been developed, even on an international level, to make a so-called ‘satellite account’.4 Consequently, it is possible to measure the economic significance of tourism on a national and a worldwide level. In practice however, this is no simple task and only few nations have established a national tourism satellite account.
Satellite accounts comprise the value of direct tourism consumption. Indirect impacts of tourism on national and world economies are not included, however: the so-called multiplier effect. Mainly, the tourist satellite account encompasses the supply and demand of goods related to the tourism industry and is therefore, the best estimation of the businesses dealing with tourism. The results of satellite accounts are larger than traditional tourism measures, among other things because they include short-term travel which so far has been excluded from tourism accounts. As a consequence in most official statistics, the economic importance of tourism is underestimated at local, national and global levels.5
In spite of these statistical shortcomings, WTTC has commissioned Accenture to make annual global and national accounts of the tourism industry and economy.6 Although it is called a satellite account, judging from the numbers the results are lower than a full satellite account.7 The WTTC account may therefore be seen as a conservative estimation of national and global tourism. The account measures the size of the tourism industry that supplies tourist goods and services as well as the size of the broader tourism economy.
FIGURE 3 The Global Tourism Industry and Economy in $bn, 1970-2015
Source: UNTWO. Historical Perspective of World Tourism. WTTC. The 2007 Travel & Tourism Economic Research.
The Tourism Economy and Tourism Industry
Since the 1960s, tourism has grown in step with general economic developments, except somewhat faster, and it is projected to continue growing at the same pace.
Mass tourism, as it is known today, began in the 1960s and continued to expand hereafter. Wealth and technology enabled millions of people to travel at home and abroad by car and airplane. Since the 1960s, the tourism industry accounted for 3 to 4 percent and the broader tourism economy for 10 percent of world GDP, export and employment. Everything indicates that this will continue in the future, and maybe even accelerate. In 2005, the world tourism economy totalled about 5000 $bn and the tourism industry about 1700 $bn (Figure 3).
Primarily, the tourism industry includes activities related to travel and stay. Also included, are governmental expenses to cultural
