Facing renewed challenges OECD reports show post-pandemic recovery of international tourism

The latest report on Tourism Trends and Policies from the Organisation for Economic Co-operation and Development (OEDC) has highlighted the industry’s continued recovery from the COVID-19 pandemic, with international tourist arrivals in 2023 exceeding pre-pandemic levels in many OECD countries. 

However, the report from the global intergovernmental organisation shows that the pace of recovery has been uneven and charts how the industry faces renewed challenges that may weigh down on growth.

Analysing the latest tourism performance and policy trends across 50 OECD countries and partner economies, the report underscores the sector's pivotal role in driving economic prosperity, jobs and well-being, with tourism´s direct contribution to Gross Domestic Product (GDP) bouncing back to 3.9% in 2022 in 20 OECD countries with available data, just half a percentage point down on 2019.

Tourism also contributed 14.8% to service exports in 2022, still below pre-pandemic levels, but up from 9.7% in 2021. The evidence suggests that the recovery has continued since, spurred by the recovery in international arrivals and strong domestic performance.

In Colombia (up 34%) and Portugal (up 12%), international tourist arrivals reached new highs, exceeding pre-pandemic levels in 2023, but the recovery has been slower in countries like Australia, Finland, Japan and New Zealand.

In addition, it advises that the slower than expected rebound in outbound travel from China has constrained recovery, particularly in the Asia Pacific region, along with delayed border openings and reduced air connectivity. Geopolitical conflicts and tensions, including Russia’s war of aggression against Ukraine and evolving conflicts in the Middle East, have also weighed down on tourism flows and the wider tourism economy.

For those countries neighbouring Russia and Ukraine, the impacts have been particularly significant. For example, international tourism arrivals to Finland remained 22% lower in 2023 compared to 2019 levels The return of international tourists has been widely welcomed. Indeed, tourism’s share of services exports in 2022 (14.8%) was 5.1 percentage points higher than in 2021 (albeit still 5.6 percentage points below pre-pandemic levels).

The report notes that, overall, tourism has rebounded strongly following sharp declines in 2020/21 and anticipates that full recovery to pre-pandemic levels is anticipated by the end of 2024, buoyed by positive traveller and business sentiment.

Employment
It also advises that despite the positive economic impacts associated with the industry’s recovery, strong demand and rapid growth continue to create challenges. Businesses struggle to attract and retain workers despite employment levels in OECD countries having stabilised at a level higher than before the pandemic.

Employment in the accommodation and food services, which often account for almost half of the tourism workforce, remained 5.3% below pre-Covid levels in 2022 across OECD countries, while job vacancy rates in 2023 were higher on average than in other parts of the economy in many countries in 2023

Strong growth in tourism has seen some destinations struggle to manage demand and the associated impacts on local communities and the environment. While tourism can play a key role in fostering economic development that creates decent jobs, enhances social cohesion, and contributes positively to the shared interests of tourists, residents, and businesses, unplanned growth can lead to unbalanced economic, social and environmental impacts. This is putting pressure on the social licence for tourism.

The report goes on to recommend that governments implement policies to:

1. Empower destinations to diversify and better manage visitor flows, to deliver better outcomes for the environment and local communities.

2. Integrate tourism workers' needs into broader development strategies, ensuring access to affordable housing and transportation in remote areas.

3. Support tourism businesses to access financial aid and skills to adopt digital solutions, green business operations, and develop innovative work practices.

Click here to access the OECD Tourism Trends and Policies 2024 report (co-funded by the European Union). 

Click here for more information on the OECD’s work in tourism.