I look forward to seeing, in 2021, the Travel and Tourism Competitiveness Report 2020, published by the World Economic Forum. The TTCR for 2019 is here.

As stated in the 2019 report, page vii: “The Travel & Tourism Competitiveness Report is a flagship product of the World Economic Forum’s Platform for Shaping the Future of Mobility, …. . This report serves as a strategic benchmarking tool for policy-makers, companies and complementary sectors to advance the future development of the T&T sector by providing a unique insight into the strengths and development areas of each country/ economy to enhance industry competitiveness. Further, it serves as a platform for multistakeholder dialogue to understand and anticipate emerging trends and risks in global travel and tourism, adapts their policies, practices and investment decisions, and accelerate new models that ensure the longevity of this important sector.”

I am quite sure that the pandemic of this year will bring significant changes in the report.

We are all aware that travel and tourism have been an important sector of activity in many countries. Many economies have relied on them for their development. What will happen after a year in which people have restricted their travelling and cancelled their holiday plans?

It is no surprise that this situation has especially hit countries like Spain. In a recent debate, a representant of the Canary Islands touristic associations was remembering the fact that Spain is the most competitive touristic destination in the world. According to him, we (the Spanish people) should be proud of it, and obviously, he is right. Spain occupies the first position in the 2019 report.

Then I heard another debate in which an economist, Mr José Ramón Rallo, was mentioning that in Spain those employed in tourism receive the lowest salaries among all sectors of activity. If this is true, is this a particularity of Spain? No, it is not. Reviewing the official statistic data from Spain, France and Germany, the three most competitive countries in the world for Travel and Tourism, we verify that Hospitality is, consistently, the worst paid sector of activity. 

(Note: I am not adding the French chart because it is too small to be read, but can be reached clicking on the link above)

According to the World Economic Forum, Competitiveness is how countries create the best economic, social and environmental conditions for economic development. They say that striving for competitiveness is striving for rising prosperity, creating more opportunities for all. You can access a youtube presentation at t.ly/Eppa. A competitive country is a country you want to live in because it creates wealth for all stakeholders, employees included. According to my definition, competitiveness is the quality of being wanted despite the costs, and this should also apply to people looking for a job in Hospitality.

But this logic does not seem to apply to different sectors of activity, or at least to the Travel and Tourism sector. In Tourism people get the lowest possible salary even though competent professionals need long studies and training to achieve the level of performance requested to them. In Germany and France, the average wages in Hospitality are around 40-45% of the best-paid sector. In Spain, this difference is much more extensive, staying at about 25% of the best payer. Probably a big part of it can be responded with employees working part-time officially and part-time in black. Travel and Tourism in Spain formally occupied around 2.62 million people directly before Covid (probably many more in the black economy).

As can be seen in the graphic, their productivity strongly grew during the last years (income raised by 25,3% while the number of employees only 12,6%) , but salaries seem to be maintaining their low level. This results from an increase in the number of both tourists and prices while reducing the number of employees/tourist or employing many people in the unofficial economy. 

The average expending of tourists in the three countries was Spain 135 €/day (2019), France 182 €/day (2019), Germany 140 €/day (2018). Considering that a large part of this expending corresponds to hotels and restaurants, in which the cost of labour plays an essential role of the total price, it is clear that the sector is more attractive to the investors than to the employees. But in Spain, tourism has probably been the only sector of activity where many non-qualified people could find a job or where many could work in black. 

My impression is that Covid could change many things. One possibility is that, with fewer tourists travelling the world and population highly attentive to issues such as health and hygiene, excellent quality service and guarantees of safety will be a valuable asset to attract them. Quality cannot be provided on the base of low salaries and unhappy workers. To survive, companies will want to hire competent professionals who will not accept to work in black or with low wages. This would be a desirable approach. Another possibility is that companies will try to reduce their prices, putting the pressure on the employees and decreasing, even more, their salaries or the number of hours worked in legality. This would be a very negative approach. The first one would consolidate the sector; the second will condemn it.

This is a good chance for a sector and the different countries to reinvent themselves. Let’s see if they can grasp the opportunity or they will go on hoping that to do nothing is the best way forward.