The latest fDi Tourism Investment Report 2024 (“Global Tourism Greenfield Investment Trends”), published by the Financial Times in collaboration with UN Tourism and with the support of Diriyah Gate Company, provides an in-depth look at global tourism greenfield investment trends, with a focus on the pandemic recovery and outlining current developments.
According to the report, the tourism sector (international tourist arrivals and receipts) showed strong growth in 2023, with international tourism receipts already up 3% compared to the 2019 level (a record for the sector).
According to fDi Markets, the Financial Times’ new project investment tracker, foreign investors announced a total of 1,943 FDI projects in the tourism sector between 2019 and 2023. These projects generated an estimated capital investment of $106.7 billion and created some 259,800 jobs. Although tourism investments have not fully returned to pre-pandemic levels, the future of the sector looks positive.
Regional Highlights and Trends
The Tourism Foreign Direct Investment Report highlights regional differences in the recovery of FDI in the tourism sector:
Europe: A global leader in tourism FDI projects, Europe attracted 867 projects between 2019 and 2023, representing 44.6% of total global investment, highlighting its resilience in a cautious investment climate.
Asia-Pacific: The number of tourism FDI projects in the region grew by 59.5% between 2022 and 2023, from 42 to 67, with capital investment up 125.3%, a positive sign considering that the Asia-Pacific region just received 65.4% of the international tourist arrivals recorded in 2019.
Latin America and the Caribbean attracted 221 tourism FDI projects between 2019 and 2023, translating into USD 20.5 billion in capital investments and approximately 73,400 jobs. As the region has already surpassed 2019 levels of international tourist arrivals, this gives investors positive confidence in the long-term profitability of the region’s tourism sector.
Middle East and Africa: Between 2019 and 2023, the Middle East and Africa recorded 314 tourism FDI projects, totaling an estimated USD 18.1 billion in equity investment and creating approximately 40,700 jobs. The number of tourism FDI projects in the region increased by 16.1% between 2022 and 2023, from 62 to 72, with equity investment growing by 12.2%.
Sustainability and innovation in focus
The report identifies an increasing focus on sustainable tourism investments, as destinations leverage innovation and technology, including artificial intelligence and blockchain, to reduce environmental impact while improving visitor experiences, and the growing involvement and appetite of sovereign wealth funds, as they believe the long-term future of the tourism sector looks positive and profitable.
A call for sustainable growth
In light of the industry’s complex recovery, the fDi Tourism Investment Report 2024 calls for quality rather than quantity in tourism. It suggests that destination diversification, the implementation of green policies and advances in sustainable infrastructure are essential to ensure the long-term growth of global tourism.
Jacopo Dettoni, Editor-in-Chief of fDi Intelligence, highlighted the importance of sustainable tourism, noting that “the world we live in has changed, and so must our approach to tourism. Climate change and resource management are changing how and where people travel, calling for a responsible shift towards sustainable investments.”
UN Secretary-General for Tourism Zurab Pololikashvili said: "The rise of new technologies and the need for greater sustainability are constantly affecting the tourism sector, posing opportunities and challenges that require innovative approaches. Increased and better targeted investment will be critical to transforming the tourism sector, creating jobs and driving inclusive and sustainable growth."
UN Tourism Executive Director Natalia Bayona adds: “This report provides a comprehensive, data-driven perspective on the current state of tourism investment in new areas, enabling policymakers and industry leaders to make sound, forward-looking decisions for sustainable growth. Investing in people, particularly younger generations, is critical as the tourism industry employs more than 50% of the global workforce under the age of 25. As we move forward, our focus on innovation and strategic investments will adapt to the changing needs of travellers, support community well-being and ensure the sustainability of the sector and our planet.”
Source: UN Tourism.