Tourism FDI has been on an upward trajectory in recent years and is maintaining this momentum: 2018 was a peak year, with 613 greenfield FDI projects in the sector launched or announced.
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These amounted to more than $57bn in total investment – compared with only $11bn in 2014 – and nearly 140,000 in estimated jobs created. Tourism was one of the world’s leading FDI growth sectors in 2018, and looks set to continue its strong performance in 2019. Project numbers for the first quarter of 2019 are on par with those of the same quarter in 2018, while capital expenditure figures are slightly ahead.
These are among the findings of the Tourism Investment Report 2019, produced by fDi Magazine in association with the UN World Tourism Organization (UNWTO). The FDI figures originate from fDi Markets, a database tracking crossborder greenfield investment, and relate to investments in the tourism cluster only.
A bumper year
According to the report, just over a third (34%) of projects and almost half (44%) of capital investment in tourism announced between 2014 and 2018 occurred in 2018. The most recent year also accounted for 40% of jobs created during the same period. There was an increase of more than 77% in greenfield project numbers between 2017 and 2018, while capital investment increased by almost 166% and jobs by more than 112%.
The UK was the largest recipient of tourism FDI between 2014 and 2018 with 145 projects, followed by the US (130) and China (91). The top 10 countries for tourism FDI make up almost half of all tourism investment globally, based on project numbers.
By capital investment, the US is the largest recipient, attracting $13.2bn in tourism investment between 2014 and 2018, followed by China with $8.5bn and South Korea with $7.8bn. By job creation, Mexico ranks first with almost 36,000 jobs created from tourism FDI, followed by the US in second (more than 24,000 jobs) and China (almost 23,000 jobs).
US-based hotel chain Marriott International remains the world’s largest investor in tourism FDI, investing in 77 projects globally between 2014 and 2018. Panama-based Selina, which provides co-working and travel accommodation solutions, ranks second, having invested in 43 projects globally in this time period. The company is a new entrant to the top 10 companies ranking, following the its 2018 strategy to open in 40 countries by 2023.
Accommodation projects lead
The accommodation sub-sector remains the biggest driver of tourism FDI projects globally. More than 870 projects were announced in the five years between 2014 and 2018. Travel arrangement and reservation services, which attracted 423 projects between 2014 and 2018, ranked as the second largest sub-sector for tourism FDI, followed by software publishers (except video games) with 125 projects.
Construction and sales, marketing and support are the key business activities for tourism FDI, accounting for almost 95% of total tourism FDI projects. Construction overtook sales, marketing and support to rank as the top business activity for tourism FDI between 2014 and 2018, with more than 900 projects. Headquarters remains in third place, with 75 projects.
The rise in tourism FDI comes at a time when international tourism itself is also on the rise. UNWTO figures reveal international arrivals increased 5.6% between 2017 and 2018 to reach 1.4 billion.