United States Among Top Five Most Competitive Countries In Travel and Tourism Sector

Business Wire, March 1, 2007

-- World Economic Forum releases in collaboration with Booz Allen Hamilton its first-ever international report on travel and tourism competitiveness

-- Switzerland scores highest and the U.S. is fifth out of 124 countries ranked

-- Report explores travel and tourism sector as a driver of economic and social prosperity

-- India is the most competitive among developing countries

MCLEAN, Va. -- As the competition for business travelers and tourists becomes increasingly international, the U.S. still ranks as one of the top five most attractive environments for developing the travel and tourism industry, following Switzerland, Austria, Germany, and Iceland. This is the finding of the first-ever Travel & Tourism Competitiveness Report (TTCR), developed by the World Economic Forum in cooperation with international strategy and technology consultancy Booz Allen Hamilton and other partners. Hong Kong, Canada, Singapore, Luxembourg, and the United Kingdom round out the top ten.

The rankings, covering 124 countries in total, are based on a measurement of 52 variables that impact a country's appeal in developing travel and tourism, including the statutory regulatory framework, health and safety, infrastructure, local price levels, and aspects relating to the environment and culture. Data from international travel and tourism organizations, industry expert views, and information from the Forum's regularly-conducted "Executive Opinion Survey" supplemented these variables. The Forum is using the information from the TTCR to build a platform for information exchange between international stakeholders in the travel and tourism industry.

"Our Travel & Tourism Index is an important milestone in enabling a strong and sustainable tourism industry to contribute effectively to international economic growth," says Klaus Schwab, founder and president of the World Economic Forum.

U.S. GETS HIGH MARKS FOR INFRASTRUCTURE, BUT LOW MARKS FOR PRICING AND TOURISM PERCEPTION

Not surprisingly, the U.S. gets high marks for overall infrastructure and business environment for travel and tourism, ranking number one in that sub-index. It has the most well-developed air transport system in the world by a significant margin, as well as an excellent tourism infrastructure in terms of hotels and rental car company density. With 20 "World Heritage" sites and a relatively large percentage of protected land area, the U.S. is among the top three countries in natural and cultural resources.

While ranked fifth overall for human resources, difficulty in hiring foreign workers is seen a competitive disadvantage, which is a concern due to the seasonality of much of the tourism work force.

Travel & tourism generate approximately $1.7 billion in the U.S., making it the largest global market in this sector. The nearly six million employees in the industry make a significant contribution to the U.S. economy. However, the U.S. only ranks 47th in the category of "Prioritization of Travel & Tourism strategies," lower than many other industrialized countries. "The United States does not fully exploit the large potential of the travel and tourism sector," comments Justin Zubrod, McLean, VA-based Vice President at Booz Allen. In the U.S., tourism contributes 3.9% to the GDP, compared to 6.2% for Switzerland.

Additionally, the United States ranks 99th out of 124 countries for price competitiveness. The relatively high cost of traveling to the U.S. compared to other destinations might be a barrier to future growth. "As the world grows smaller, the competition for business travelers and tourists is heating up," said Mr. Zubrod. "The governments of other industrialized nations, especially European ones, have made travel and tourism a priority in terms of policies and regulations concerning foreign travelers. The U.S. needs to keep up, or risk losing some of its competitive edge."

The perception of U.S. citizens toward foreign visitors also ranked low, at 112th place. Concerns over global terrorism in particular have made U.S. citizens more skeptical towards international tourists. "The U.S. is a welcoming nation - but we need to get this message out to the world. We need to embrace international visitors to make the most of our travel & tourism potential," said Mr. Zubrod.

COMPETITION FACTORS FOR INDUSTRIALIZED NATIONS AND DEVELOPING COUNTRIES VARY

Due to well-developed infrastructures, assured statutory framework conditions, and high levels of education, industrialized nations rank higher overall in the index than emerging ones. Only five of the top 20 countries ranked are outside of Europe and North America. For these nations, key levers for optimizing their competitiveness include increased deregulation, liberalization, and environmentally-sustainable tourism.

The travel and tourism sector is a key driver for prosperity in emerging threshold countries such as Tunisia (34), Jordan (46) and Egypt (58) and for developing countries like India (65). According to the report, these nations can increase their competitiveness in this sector through investment in their infrastructure and a fundamentally supportive legislative framework.