The greenfield investments into the tourism sector continue to rise, with a growing interest in projects related to sustainability and innovation.
The latest fDi Tourism Investment Report 2024 (“Global greenfield investment trends in tourism”), released by the Financial Times in collaboration with UN Tourism and with the support of the Diriyah Gate Company, offers an in-depth look at global greenfield investment trends in tourism, emphasizing recovery from the pandemic 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 +3% up compared with the level of 2019 (a record high for the sector).
Foreign investors announced a total of 1,943 FDI projects in the tourism cluster between 2019 and2023 according to fDi Markets, the greenfield investment monitor of the Financial Times. These projects garnered an estimated $106.7bn in capital investment and created an estimated 259,800 jobs. Even though tourism investments have not fully returned to pre-pandemic levels, the future of the sector looks positive.
The fDi Tourism Investment Report highlights regional differences in FDI recovery within the tourism sector. Europe leads globally, attracting 867 tourism FDI projects between 2019 and 2023, which accounts for 44.6% of total global investment, showcasing its resilience in a cautious investment climate.
In the Asia-Pacific region, the number of tourism FDI projects grew by 59.5% between 2022 and 2023, from 42 to 67, with capital investment rising by 125.3%. This positive trend is significant considering that the Asia and Pacific region received 65.4% of international tourist arrivals registered in 2019.
Latin America and the Caribbean attracted 221 tourism FDI projects during the same period, resulting in $20.5 billion in capital investment and the creation of approximately 73,400 jobs. With the region already surpassing 2019 levels of international tourist arrivals, investor confidence in the long-term profitability of its tourism sector remains strong.
Meanwhile, the Middle East and Africa recorded 314 tourism FDI projects between 2019 and 2023, totaling an estimated $18.1 billion in capital investment and generating approximately 40,700 jobs. In 2023, the number of tourism FDI projects in the region increased by 16.1%, from 62 to 72, with capital investment growing by 12.2%, signaling ongoing growth and potential in the region’s tourism sector.
The report identifies an increasing focus on sustainable tourism investments, as destinations leverage innovation and technology, including AI and blockchain, to reduce environmental impact while enhancing visitor experiences, and the growing involvement and appetite of sovereign wealth funds, as they believe that the long term future of the tourism sector looks positive and profitable.
In light of the industry’s complex recovery, the fDi Tourism Investment Report 2024 advocates for quality over quantity in tourism. It suggests that diversification of destinations, implementation of eco-friendly policies, and advancements in sustainable infrastructure are essential for ensuring long-term growth in global tourism.
Jacopo Dettoni, Editor-in-Chief at fDi Intelligence, emphasized the significance of sustainable tourism, noting, “The world we live in has changed, and so must our approach to tourism. Climate change and resource management are reshaping how and where people travel, which calls for a responsible shift toward sustainable investments.”
UN Tourism Secretary-General Zurab Pololikashvili said, “The rise of new technologies and the need for greater sustainability are constantly impacting the tourism sector, presenting both opportunities and challenges that call for innovative approaches. More and better-targeted investment will be key to transforming the tourism sector, creating jobs, and driving inclusive and sustainable growth.”
UN Tourism Executive Director Natalia Bayona adds, “This report offers a comprehensive, data-backed perspective on the state of play in greenfield tourism investments, enabling policymakers and industry leaders to make sound, future-oriented decisions for sustainable growth. Investing in people, particularly younger generations, is key 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 evolving needs of travellers, support community wellbeing, and ensure the sustainability of the sector and our planet.”
