FEATURE STORY September 25, 2018

Digital Platforms and the Future of Tourism

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Successful woman backpacker use digital tablet taking photo on mountain peak cliff. © lzf/Shutterstock


STORY HIGHLIGHTS

  • The tourism industry is vital to the growth of the majority of developing economies, with the potential to create millions of jobs and promote entrepreneurship and innovation.
  • Digital technologies have the potential to give small tourism businesses in emerging destinations direct access to a global market of travel consumers for the first time, vastly expanding their prospects.
  • To celebrate World Tourism Day, the World Bank Group, together with partners, are exploring how digital advances can be used to benefit sustainable tourism for development.

Tourism is one of the fastest growing and most important economic sectors in the world providing benefits to both host communities and destination areas. In 2017, international tourist arrivals reached a new record high at over 1.3 billion according to the latest UNWTO Tourism Highlights. The sector has now seen uninterrupted growth in arrivals for eight straight years. It also represents 10.4% of GDP and in 2017 the tourism industry supported 313 million jobs or 1 in 10 jobs globally.

Tourism also provides better opportunities for women’s participation in the workforce, women’s entrepreneurship, and women’s leadership than other sectors of the economy.

That is why the World Bank Group continues to be committed to invest funds, knowledge and expertise to support tourism for development.

  • As a part of the World Bank Growth & Competitiveness Project in the Gambia, a hospitality training center trained 1,235 students and helped increase arrivals by tourists from non-traditional markets by 71% between 2011 and 2015.
  • In Peru, an IFC Advisory project financed by SECO (Swiss State Secretariat for Economic Affairs – Economic Cooperation and Development) helped streamline procedures for obtaining licenses and permits to start and operate tourism businesses in Cusco. The reforms eliminated 150 unnecessary processes and shaved three years off the business registration process, making it easier for both local and foreign investors to operate in Cusco.
  • A World Bank Group report on the 20 Reasons Sustainable Tourism Counts for Development explains how sustainable tourism counts not just for travelers, but for tourism destinations and local residents.
  • The World Bank Group developed the Abraham Path project to bring together fragmented communities along the path in the West Bank through many interventions like training and capacity, which were aimed at generating tourism revenue and jobs, and improving economic opportunities for women. The project has generated 137 jobs, 57% going to women.

Digital technologies and platforms are disrupting the way the tourism sector operates from end to end.   Many low-income economies can potentially benefit from this digital transformation and others are at risk of being left behind if they fail to embrace this moment.

The World Bank Group recently published two reports on the significance of this disruption on tourism and how countries can harness it for the benefit of all. According to the report, Tourism and the Sharing Economy, the annual growth rate for the global P2P accommodation is estimated at 31 percent between 2013 and 2025, six times the growth rate of traditional bed and breakfasts and hostels.

In addition, the second report, The Voice of Travelers, produced in collaboration with TripAdvisor explains how peer reviews and other forms of user-generated content (UGC), facilitated by digital platforms, have become the most important sources of travel information globally—more important than tourism boards and traditional outlets. This joint report is part of an MoU that was signed by the World Bank Group and TripAdvisor to promote the development of the tourism sector that highlights some of the key digital trends impacting the sector to countries and private sector partners.

This year, World Tourism Day is shining a light on “Tourism and the Digital Transformation”— as its theme. The UNWTO is calling on governments and the global community, to “support digital technologies that can transform the way we travel, reduce the ecological burden of tourism and bring the benefits of tourism to all.”  

They also can provide new opportunities for women and rural entrepreneurs to improve their market access and financial inclusion. However, many developing destinations have limited knowledge on how to take advantage of digital platforms and mitigate risks. Either constrained by the lack of understanding or knowhow and resources, these economies are not able to leverage digital tools to grow their tourism.

Responding to the global call to promote innovations in tourism through technology, the World Bank Group, will host a day-long event just prior to WTD2018 focusing on Digital Platforms and the Future of Tourism.



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