global talent trends report - web (1)

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Final Repor t - January 20151

January - 2015

Global Talent Trends and Issues

for the Travel & Tourism Sector


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Global Talent Trends and Issues for the Travel & Tourism Sector Final Report - January 20152 3

Global Talent Trends and Issues

for the Travel & Tourism Sector

A report prepared by Oxford Economics for the World Travel & Tourism Council


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Contents

Foreword

Introduction

Human capital issues in context

Talent demand-supply balance andenabling environment analysis

Economic cost impact of talentgaps and defciencies

Annex A

Annex B

Annex C

Annex D

6

8

12

26

45

51

52

62

60

1

2

3

4


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ForewordThe World Travel & Tourism Council (WTTC) is the global authority

on the economic and social contribution of Travel & Tourism.

It promotes sustainable growth for the sector, working with

governments and international institutions to create jobs, to driveexports and to generate prosperity.

Members are the Chairs, Presidents and Chief E xecutives of the

world’s leading, private sector Travel & Tourism businesses. These

Members bring specialist knowledge to guide government policy

and decision-making, raising awareness of the importance of the

sector as an economic generator of wealth.

Over the next ten years, WTTC’s forecasts project that

Travel & Tourism will contribute US$11 trillion (US$3.4 trillion

directly) and support 347 million jobs around the world (126

million directly – over 25 million more direct jobs than in 2013). The

growth in Travel & Tourism employment, at over 4% per year for

the next ten years, will bring about en ormous development across

the world. Our research shows however, that without the right

policies in place now, some countries are likely to have large gaps

that will make it dicult, if not impossible, for them to full their

growth potential.

WTTC is pleased to produce this report on Global Talent Trends

and Issues for the Travel & Tourism Sector that for the rst time,

quanties the scale of the Travel & Tourism talent problem. It highlights

the economic impact that the HR challenge will have on the global

economy if not addressed soon. It looks at the scale of the problem

(‘the talent decit’) in 46 countries an d then assesses how well placed these countries are (‘the enabling environment’) to address

the challenges they face. A combined ranking of the ta lent decit

and enabling environment highlights those countries where Travel &

Tourism is most at risk from human capital issues over the next ve to

ten years, and those which will likely be able to manage futur e growth.

At a global level, the research shows that the industry is facing a

shortfall of 14 million jobs – that is equivalent to the population of

Cambodia – and stands to reduce its contribution to glo bal GDP

by US$ 610 billion over the next ten years, 5.8% less than our baseline forecasts.

This research also shows that Travel & Tourism’s Human Capital

challenges are signicantly higher than those faced in other

sectors, with 37 out of 46 countries showing a talent ‘decit’ or

‘shortage’ in Travel & Tourism over the next ten years, compared

with only 6 out of 46 for the economy as a whole.

The situation is more pressing at the lower educational at tainment

levels, i.e. unskilled labour, and the impacts will hit in the next ve

years. This is a problem which needs to be addressed now.

WTTC urges the industry – both public and private sector – to act

now to address the anticipated talent shortage. Travel & Tourism

has the power to create jobs across the economy - at dierent skills

levels, for often marginalised sectors of society such as young

people and women, and in areas where other opportunities are

scarce. We are a people industry – we depend on quality people

to deliver a quality product – and we need the righ t policies,

programmes and partnerships in place to ensure that the workforce

of the future knows about the oppor tunities in our sector, and has

the appropriate skills and knowledge to support future growth.

In the years to come, progress in developing and retaining talent will

require a much stronger and more co-ordinated eort between the private sector, educational establishments and government. WTTC

and its Members will be at the forefront of this debate, discussion

and action to ensure the continued strength of Travel & Tourism.

David Scowsill

President & CEOWorld Travel & Tourism Council


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Introduction

Travel & Tourism is one of the world’s largest economic sectors. Current global

Travel & Tourism direct employment is over 100 million jobs (103 million jobs, 2014

forecast estimate1 ). Global Travel & Tourism direct employment is forecast to grow

at a faster pace (2.0% pa) than most other major industries and the global economy

employment average2. This is a result of a number of factors including the ongoing

structural transformation from industry to services in advanced and emerging

economies and the growth of the middle class globally resulting in changing consumer

patterns favourable to Travel & Tourism. In f act, many countries have even more

aspirational growth targets than assumed in the WTTC baseline scenario which would

require Travel & Tourism direct employment to grow even faster. For some of these

countries, given the analysis in this report, these aspirations will be very dicult to

realise given the projected talent trend decits.

1Source: WTTC annual economic impact research, March 2014 2Source: WTTC annual economic impact rese arch, March 2014

3 In the long-run economy-wide grow th projections are constrained by the economy’s long-run potential output, which depends, among other

factors, on the long-run labour supply. Although sector-level demand projections are less directly constrained by overall labour supply on t he

general assumption that demand for labour will be met from within the wider economy labour pool.

The rapid pace and extent of change in global and national markets for talent will

be signicant across the economy as a whole and s pecically for Travel & Tourism.

The market for Travel & Tourism talent is already challenged with high st a turnover,

competition with other industry sectors for th e best people, and in some cases,

adverse supply trends such as declining demographics. New regulations, new

technology (which in some cases is squeezing out existing roles and creating demand

for new roles), shifts in customer service preferences, changing visitor markets, as

well as other industry drivers, all have the potential to transform the type of skills that

employees in Travel & Tourism will need to possess in future and employers will need to

train sta in.

Planning for and meeting fu ture talent demand in Travel & Tourism is going to require

companies and governments to implement and promote proactive and careful talent

supply management policies and together with education, develop stronger and more

coordinated talent eorts. A thriving Travel & Tourism sector will also require regular

monitoring and projecting of talent demand, supply and imbalances to predict in

advance any looming shortages.

Although there are many talent commonalities facing the Travel & Tourism globally,

the talent environment is far from uniform across countries for demand, supply and

imbalances, and the enabling talent environment. There is huge diversity across

countries in terms of the general development and maturity of Travel & Tourism and the

stage they are at in the sector’s growth cycle. So an understanding of the talent picture

for dierent countries is vital as a ‘one-size ts all’ analytical picture and policy response

will be incorrect and ineective. Understanding the sector’s outlook and issues will be

crucial if Travel & Tourism is to realise its growth potential over the next decade.

It is against this backdrop that WTTC commissioned Oxford Econ omics, one of the

world’s leading providers of global economic analysis, advice and models, to conduct this

research on 46 countries. The coun tries are geographically diverse, encompass all of the

world’s major economies and include countries such as Barbados, Morocco and Thailand

where Travel & Tourism is a particularly important sector. The 46 countrie s accoun t for

81% and 88% of direct world Travel & Tourism employment and GDP respectively.


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In practice and over the long-run, there is no guarantee that each country’s

Travel & Tourism demand for talent will be met by its domestic supply (and external

supply). Nor is it guaranteed that a country’s Travel & Tourism talent base will be

compatible with the level of competitiveness needed to compete internationally

and achieve the projected international deman d growth.

The impacts of Travel & Tourism talent imbalances and deciencies are listed below.

These clearly demonstrate why talent issues are so important to the sector’s growth

sustainability and bottom-line.

• Talent labour shortages, where many hard-to-ll vacancies go permanently

unlled, lead to below-potential employment levels and growth in the near-term

and foregone investment and growth in the longer-term.

• Talent vacancies, which in many cases may only be met by raising pay

levels substantially and attracting sta from other sectors, lead to higher

company operating costs and reduced prots in the short-term, and eroded

competitiveness and weaker growth and investment in the longer-term. An

alternative solution to lling these vacancies could be promotion of sta within the

sector before they are ready to prociently ll these roles. The impacts of this are

dierent but again tend to be negative.

• Talent skill gaps amongst existing employees, where positions are lled by

under-qualied and under-experienced sta, lead to inferior customer service and

quality standards, and create a host of other HR challenges.

• Talent gaps, where migrant labour has to substitute for a shortage of

indigenous labour (in volume and quality terms), can affect the authenticity of

a country’s Travel & Tourism offer and its long-term brand, competitiveness

and international image.

Labour and skills are a crucialcomponent in the tourismsupply chain. Enhancing thequality of service is pivotal inbuilding a region’s reputationboth domestically and globally,and making it competitive inthe international marketplace. Itensures that once tourists visityour destination, they will want toreturn and bring others with them’

Source: Australia Government 2012: Tackling

labour and skills issues in the tourism and

hospitality industry: A guide to developing tourism

employment plans

‘ Developing more tourisminfrastructure—hotels,resorts, transportation,tourist destinations, and otheramenities—is not enough tomeet the needs of this rapidlyexpanding industry in China.The government and privateenterprises must invest in tourismand hospitality education to llthe critical gap in workers whounderstand international bestpractices. China has investedbillions of dollars in infrastructure,but now is the time to investin human resources and skillsdevelopment’

Source: The Hospitality Talent Gap, China

Business Review

‘

Why talent matters: Negative impacts ofTravel & Tourism talent gaps and deciencies

The projections for Travel & Tourism direct employment from WTTC’s annual

economic impact research are based on top-down macroeconomic domestic

and international demand projections, linked to Oxford Economics Global

Macroeconomic Model3 and Tourism Economics Tourism Decision Metrics Model.

These demand-orientated growth projections for Travel & Tourism employment,

however, implicitly depend on a sucient volume, availability and quality of talent

supply, which can be retained within the sector. If thi s is not the case, countries will

struggle to realise these growth projections.

Talent is increasingly seen as a key enabler for wider economic development,

facilitator of growth and source of competitiveness. In this way, talent is no dierent toother supply-side factors like land, capital, technology and infrastructure. However,

traditionally - as the literature review for this study has shown, with the exception of

some countries - governments generally have not prioritised human resources and

training to the same extent, for example, as infrastructure.

1.1 • The sector’s often transient labour can limit its ability to deliver a consistently highquality visitor experience. High sta turnover directly leads to higher recruitmentand advertising costs, higher training costs, reduced returns to training and an

increased workload on existing sta.

Together Travel & Tourism talent gaps and deciencies impact on costs,

bottom-li ne protability, compet itiveness, ser vice, quality, brand, investment and

ultimately future growth.

• All of the above impacts relate to negative imbalances where the supply of

talent falls short of demand, directly aecting indu stry employers. But there are

negative consequences also where there is an excess supply of Travel & Tourism

talent, which aects more today and tomorrow’s future employees. These

negative consequences include, among others, downward pressure on wage

levels and lack of employment and career progression opportunities. In the 1990sand early 2000s, the global economy experienced a boom and bust in the IT

talent market. During the tech boom, talent was attracted to IT by the growing job

opportunities and nancial remuneration on oer. The dot com crash led to heavy

jobs losses and remuneration fell behind other sectors. Even as the IT industry

and talent demand market quickly recovered, the perception of the industry was

scarred and supply was slow to respond leading to global talen t shortages which

are still prevalent today.


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Human Capital Issues in Context

Academic articles and published reports have focused a great deal on human capital

issues, many of which have enormous implications and impact on

Travel & Tourism companies and the futu re of the in sector as a whole. These issues

include the structural characteristics of the Travel & Tourism sector; Travel & Tourism

talent supply; imbalances between Travel & Tourism talent demand and supply; why

Travel & Tourism experiences talent challenges; Travel & Tourism talent projections;

and Travel & Tourism talent best practice policy examples, including case studies.

This chapter also integrates highlights from a survey of senior HR professionals

from WTTC member companies4. The survey examined talent recruitment and

development, aiming to understand the scale of current talent gaps and the particular

diculties in recruiting quality sta.

Structural characteristics of the Travel & Tourism sector

Travel & Tourism is highly diverse in terms of its sub-sector mix, occupations and talent

requirements: sub-sectors range from hotels to air transport, while occupations range

from concierges to pilots.

A relatively high proportion of the Travel & Tourism workforce is employed in

elementary, low skilled occupations, e.g. cleaners, waitresses. The sector has a

below economy average proportion (at least in advanced economies) of its workforce

employed in higher skilled professional occupations.

The Travel & Tourism workforce is also younger and more female-orientated versus the

global economy average. In addition a high share of the workforce is part-time, casual

and seasonal. The sector is more likely to recruit foreign workers compared to the

economy average5.

Evidence from the survey of WTTC member companies supports the assertion that

Travel & Tourism is an important employer of young people. All but one of the member

companies had hired a school or university leaver to their rst job in the past two years.

Nearly all companies oer some form of work experience or internship programmes, or

provide further education and training programmes in order to specically attract young

people and retain them within their organisations.

Travel & Tourism talent supply

The supply of talent to Travel & Tourism is broad and comes from many sources given

the diversity of sectors, occupation roles and range of talent requirements.

Some employee skills are transferable across Travel & Tourism sub-sectors and from

other sectors in the economy. But some other talent requirements are more specic

and are supplied from more narrow and well-dened sources.

For certain sectors and roles, there are typically few skill barriers for people to enter Travel

& Tourism compared to other sectors. This is a ‘positive’ in the sense that peo ple can work

in the sector with little prior experienc e or qualications, and train ‘on the job’. They can

thus be recruited from a wide pool of labour. But this can also be a ‘negative’ in terms of its

impact on perceived career attractiveness and pathways6.

The talent market, in general and for Travel & Tourism, is becoming increasingly global

with higher cross-border migration7.

Looking to the future, the following megatrends will exert a signicant inuence on the

future supply of talent to Travel & Tourism, although to varyin g degrees by country:

declining youth demographics; retirement of the baby boom generation; rising female

labour market participation; a general shift towards a more highly skilled (in education

attainment terms) labou r supply as older, less skilled workers retire; and the potential for

some reverse migration back to fast growing emerging economies8.

2.1

4 The 41 respondents to the survey represent the talent situation amongst companies from almost all

Travel & Tourism industries and cover 25 countries, as well as a collective view for Europe and the Gulf

Cooperation Council (GCC). The survey was administered by WTTC and designed in conjunction

with Oxford Economics.

5 UK Commission for Employment and Skills – Sk ills Sector Insights: Tourism: http://www.ukces.org.uk/publications/er55-sector-skills-insights-tourism6WTTC Human Capital Research: http://www.wttc.org/focus/research-for-action/policy-research/human-capital-research/ 7 The Hospitality Talent Gap, China Business Review: http://www.chinabusinessreview.com/the-hospitality-talent-gap/ 8 The World Economic Forum, cited in The Hospitality Talent Gap, China Business Review: http://www.chinabusinessreview.com/the-hospitality-talent-

gap/


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2.2

2.2.1

2.2.2

Imbalances between Travel & Tourism talentdemand and supply

Talent imbalances in Travel & Tourism take many forms, covering both shortages and

surpluses:

• Shortage or surplus of par ticular occupations, e.g. chefs, pilots

• Shortage or surplus of job-specic skills, e.g. foreign languages, IT

• Shortage or surplus of cer tain soft skills, e.g. customer service, problem solving

Survey of WTTC member companiesOver half of the Travel & Tourism companies in the W TTC member survey described

their experience of hiring sta as dicult, with the challenge greatest for higher s killed

and more professional roles. Alongside engineers, chefs and other technical roles,

other jobs that are particularly dicult to recruit for include accountants and food &

beverage managers. Nearly two-thirds of the companies also reported that recruiting

sta has become more dicult in the past two years.

Lack of country-specic Travel & Tourism talentimbalance evidence

A key nding from the literature review was the lack of countries actually

undertaking and publishing research on Travel & Tourism talent issues. This holds

also for those countries with the largest (in absolute and relative terms) and fastest

growing Travel & Tourism industries , and for countries which this research predicts

will experience the greatest future talent ‘hotspots’ and ‘stretch points’.

It could be the case that in many countries, stakeholders, away from the ‘cold face’

of Travel & Tourism (e.g. from government and education), are not aware or made

aware of talent challenges because of this lack of reported evidence. It is hoped

that this research may ll some of that gap in evidence and prompt these countries

to look more closely at Travel & Tourism talent issues and build on this research.

• The limited evidence that exists from literature shows that: the UK has a higher

share of Travel & Tourism businesses and employees with skill gaps (21% and

9%) compared to the economy average; in Australia, according to analys is by the

Australian Government, a very high share (half) of Travel & Tourism businesses

faces recruitment, retention and skill shortages9; and in Rwanda technical skill

gaps are reported to be as high as 25% of Travel & Tourism’s total employment in

Rwanda and 50% of sta need language training in English, French and Chinese

(languages aligned to visitor origin markets).

Economy-wide talent imbalances

• According to the ManpowerGroup talent shortage survey, covering 37,000

employers from 42 countries10, the top 10 jobs employers found diculty

lling in 2014 across the whole economy were, in descending order: skilled

trades and engineers (ranked 1 and 2 for three consecutive years), technicians,

sales representatives, accounting & nance sta, management/executives,

sales managers, IT sta, oce support sta and drivers. Although as this

represents talen t shortages across the economy, this is by no means fully

representat ive of talent shortages in Travel & Tourism, although all of these

roles are requir ed by the Travel & Tourism sector.

Impacts of talent imbalances

Section 1.2 has already established a framework for analysing impacts of

Travel & Tourism talent gaps and deciencies. In general, evidence from literature

on the impact of Travel & Tourism talent imbalances is limited. This is partly because

the aim of some of the reviewed reports is to identify current and potential future

imbalances with the hope of addressing these imbalances and avoiding negative

impacts.

• Some evidence, however, exists for UK Travel & Tourism11 and from the survey of

WTTC member companies.

The main eects of talent shortag es on Travel & Tourism businesses in

the UK have been to increase the workload of other sta and to create

diculties meeting customer service objectives. Skill shortages have also

caused signicant numbers of tourism establishments to have diculties

meeting quality standards. Increased operating costs, and losing business

or orders to competitors, were also commonly mentioned by tourism

establishments as negative impacts of skill shortages.

According to the survey of WTTC member companies, the impact of the

diculties of recruiting tends to manifest itself by creating a higher workload

and engendering lower morale and less creativity among the existing

workforce. The eects of internal skill gaps, where some sta are not fully

procient in their roles, are similar. While none of the HR managers said that

they had yet had to withdraw products or services from the market due to a

lack of sta, one quarter admitted that a further impact of recruit ment issues

is a diculty in meeting quality standards. Recruit ment diculties can also

force companies into moving sta into new positions or over-promoting in

order to ll gaps. This in turn can fuel other issues for HR teams and spur job

turnover or bring about a lack of job prociency among a proportion of the

workforce. Vacancies aside, having sta that are not procient in their roles

also impacts the morale and workloads of the rest of the employees and can

aect the quality of service levels provided to customers.

• At the broader economy-wide level, the ManpowerGroup talent shortage survey12

provides analysis of the impact of talent shortages. Over half of employers

experiencing a talent shortage say it has a medium to high impact on their ability

to meet client needs. Other impacts, in descending order of occurrence, include:

reduced competitiveness/productivity, increased employee turnover, reduced

innovation and creativity, lower employee morale and higher wage costs.

2.2.3

2.2.4

9 Australia Government 2012: Tackling labour and skills issues in the tourism and hospital ity industry: A guide to developing tourism employment plans:

https://www.austrade.gov.au/Tourism/Policies/National-long-term-strategy/Working-groups/Labour-and-Skills Manpower Group - 2014 Talent

Shortage Survey Results: ht tp://www.manpowergroup.co.uk/media/137404/2014_talent_shortage_wp_us2.pdf

10 Manpower Group - 2014 Talent Shortage Survey Results: http://www.manpowergroup.co.uk/media/137404/2014_talent_shortage_wp_us2.pdf 11 https://www.gov.uk/government/publications/tourism-sector-skills-insights12 Manpower Group - 2014 Talent Shortage Survey Results: http://www.manpowergroup.co.uk/media/137404/2014_talent_shortage_wp_us2.pdf


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Why the Travel & Tourism sector experiencestalent gaps and deciencies

Travel & Tourism has some unique features that make it a challenging sector to recruit

and retain talent and skills.

Career attractiveness and pathways

• The seasonal nature of Travel & Tourism demand in many destinations means that

it is often dicult to oer year-round full-time employment which other sectors can

and do oer13.

• The geographically remote location of some Travel & Tourism businesses can also

mean limited local talent supply. This can be exacerbated by other constraintssuch as lack of local housing and transport connecting tourism businesses to

larger pools of labour14.

• In some countries cultural and social issues make Travel & Tourism less attractive

than other sectors, and place a ‘glass ceiling’ on female employment participation15.

• Low barriers to enter the sector can have a drawback: namely the perception of

low skilled, low paid, menial transient jobs16.

• A lack of clear sta development pathways, unsociable working hours and low

earnings potential (for some job roles) combine to create a poor recruitment image

for the sector17.

Competition

• Travel & Tourism often faces strong competition from other fast-growing sectors

recruiting similar types of talent and often paying higher salaries18.

• Survey results of WTTC member companies show that for two-thirds of senior

HR managers, recruitment challenges over the next ve years are expected to get

even more dicult as competition for talent is expected to further increase among

sectors and across geographies. The survey found that a strong employer brand

can both improve application rates for new employees and increase engagement

and retention among the current workforce.

• A report by the Standing Committee for Economic and Commercial Cooperation

of the Organization of Islamic Cooperation (COMCEC) also identied the problem

of ‘losing’ talent to other sectors and employers’ failure to attract qualied

personnel into the sector19.

Retention

• The Travel & Tourism sector faces talent problems from high sta turnover and

leakage of talent to other sectors20, which is often far in excess of the demand from

Travel & Tourism’s expansion21.

• In the UK, turnover ranges from 7.5% for self-catered accommodation to over a

quarter for pubs, bars and nightclubs22.

• According to the survey of WTTC member companies, average annual sta

turnover was 18%, ranging from a high of 36% to a low of 3%. Recruitment is thus

an on-going activity. Job roles in elementary occupations, sales and customer

services and those with skilled trades have the highest levels of turnover.

• The WTTC member survey also concluded that companies have to placeemphasis on creating structures and systems within their organisations to best

retain their workforce. The survey also highlighted exible recruitment and

retention practices as the new necessities of workforce planning.

Uncompetitive pay

• Rather than facing an overall general lack of applicants for vacancies, WT TC

member countries reported that some applicants who apply to vacancies tend

to want higher levels of pay than can be oered, or do not have the required skills

or experience required. In many cases also, applicants were said to lack th e right

attitude or motivation to t with the company. Trying to maintain competitiveness

through benchmarking the salaries of similar roles in competitor companies and

industries is becoming common place among WT TC member companies.

Education supply

• In some countries there is a lack of provision of Travel & Tourism courses from

education institutions, often due to a lack of qualied tourism educators 23.

• Where Travel & Tourism courses are oered, the curricula can be poorly designed

and outdated. There often needs to be a greater balance between theory and

practice, a change from a traditional teaching mode to a more modernized,

international, innovative, and interactive teaching mode, and in general greater

responsiveness to and alignment with the sector’s needs.

• Although growing, the number of Travel & Tourism apprenticeships and volume of

vocational provision in general typically falls short of demand.

2.3

13 British Columbia Labour Market Strategy: http://www.jtst.gov.bc.ca/skills_for_growth/ 14 McKinsey Global Institute - Talent tensions ahead: A CEO brieng, Richard Dobbs, Susan Lund, and Anu Madgavkar: http://www.mckinsey.com/

insights/economic_studies/talent_tensions_ahead_a_ceo_brieng15 http://www.yoursingapore.com/TravelRave/resources/TravelRave2013-Highlights-Report_Navigating-the-next-wave-in-Asia%27-Tourism.pdf 16 UK state of nation report 2013: http://www.people1st.co.uk/research/reports/state-of-the-nation-hospitality-and-tourism17 UK state of nation report 2013: http://www.people1st.co.uk/research/reports/state-of-the-nation-hospitality-and-tourism18 UK Commission for Employment and Skills – Skills Sector Insights: Tourism: http://www.ukces.org.uk/publications/er55-sector-skills-insights-

tourism19 Standing Committee for Economic and Commercial Cooperation of the Organizatio n of Islamic Cooperation (COMCEC), ‘Enhancing the Capacity of

Tourism Workforce In the OIC Member Countries For Improved Tourism Service Quality (2014).

20 UK Commission for Employment and Skills – Skills Sector Insights: Tourism: http://www.ukces.org.uk/publications/er55-sector-skills-insights-

tourism 21 Anecdotal evidence suggests turnover in Chinese hotels is as high as 40%. 22 State of the Nation 2013 Hospitality and Tourism report: http://www.people1st.co.uk/research/reports/state-of-the-nation-hospitality-and-tourism 23 Rwanda Development Board – Rwanda Skill Survey 2012 – T&H Report: http://www.lmis.gov.rw/scripts/publication/reports/Tourism.pdf


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Structural characteristics

• Some occupations are heavily gender biased, e.g. housekeepers (female) versus

chefs (male). This limits potential talent supply if, for example, few males apply for

housekeeping positions24.

Travel & Tourism sector practice and training

• Not all employers proactively pursue or have in place a strategy to address talent

challenges. In some cases this is un derstandable given that many Travel & Tourism

businesses are small and lack talent management capacity by not having an in-

house human resources department.

• Some rms under-invest in sta up-skilling, which is likely to be partly linked to thetransient nature and high turnover characteristics of the workforce.

• In some countries, there is a lack of training to nurture middle managers and a lack

of relevant rotational opportunities with workplaces25.

• Young employees are more likely to engage with training which meets their

personal as well as company needs and aspirations. So for young people,

purely functional, task-related training is valued less than more generic skills

development26.

Government policy and engagement

• In economies with fast growing Travel & Tourism industries, more focus has often

been placed on investing in physical infrastructure rather than talent27.

• Too few countries undertake either formal Travel & Tourism workforce planning

exercises or detailed talent studies.

• There is often a lack of industry-government-education engagement to discuss

and resolve talent issues.

• Some countries have very favourable immigration policies which support

Travel & Tourism talent supply, for example Gulf countries, others do not28.

Economy-wide reasons for talent shortages

• It is useful to compare the factors above, for why Travel & Tourism experiences

talent gaps and deciencies, with economy-wide reasons why employers

have diculty lling jobs. According to the ManpowerGroup talent shortage

survey29, the main reasons employers had diculty lling jobs in 2014 include, in

descending order: lack of technical competence (hard skills), lack of applicants,

lack of experience, lack of workplace competence (soft skills), looking for more

pay than is oered, undesirable geographic destination, poor image of business

sector/occupation and lack of applicants willing to work in part-time/contingent

roles. It is clear that many of these reasons correlate closely with the f actors

identied specically for Travel & Tourism.

Travel & Tourism future talent projectionsReplacement demand will form a major component of future Travel & Tourism job

openings. Replacement demand refers to the talent requirement to replace workforce

leavers (either temporarily or permanently) due to retirement, maternity leave and

joining other sectors amongst other reasons, and to backll jobs vacated by an

existing, promoted worker.

• Replacement demand is not unique to Travel & Tourism. All sectors in any dynamic

economy with retirement and labour churn have a talent requirement relating to

replacement demand. The extent of replacement demand depends on a number

of factors including the age and gender structure of the workforce, sta turnover

and an in dustry’s relative appeal. Travel & Tourism’s younger than average age

structure should reduce replacement demand but its more female-orientated

workforce and high sta turnover would increase it. It is dicult to compare

replacement demand across sectors due to limited data availability and therefore

dicult to assess whether Travel & Tourism has a larger relative replacement

demand talent requirement.

• The balance between new roles and replacement demand will vary by country. In

countries with more mature and slower growing Travel & Tourism industries, and

older workforces, replacement demand will account for a higher share of vacancies.

• In the UK, for example, replacement demand30 will be 4 times as large as

expansion demand (the growth in the stock of sector jobs/new job roles) 31.

• There will be a rising gradient of talent demand across Travel & Tourism – a slow

shift to more high skilled openings – but there will still be signicant opportunities

and demand for people with low qualications32.

• There will be a growing demand for managerial skills and customer service. Future

managers will need to have broader management and business competencies33.

2.4

24 UK state of nation repor t: http://www.people1st.co.uk/research/reports/state-of-the-nation-hospitality-and-tourism 25 http://www.yoursingapore.com/TravelRave/resources/TravelRave2013-Highlights-Report_Navigating-the-next-wave-in-Asia%27-Tourismpdf 26 Standing Committee for Economic and Commercial Cooperation of the Organizat ion of Islamic Cooperation (COMCEC), ‘Enhancing the Capacity of

Tourism Workforce In the OIC Member Countries For Improved Tourism Service Quality (2014). 27 The Hospitality Talent Gap, China Business Rev iew: http://www.chinabusinessreview.com/the-hospitality-talent-gap/ 28 Canadian Tourism Research Institute – The Future of Canada’s Tourism Sector

http://cthrc.ca/~/media/Files/CTHRC/Home/research_publications/labour_market_information/Supply_Demand/SupplyDemand_Report_Current_

EN.ashx and British Columbia Labour Market Strategy: http://www.jtst.gov.bc.ca/skills_for_growth/

29 Manpower Group - 2014 Talent Shortage Survey Results: http://www.manpowergroup.co.uk/media/137404/2014_talent_shortage_wp_us2.pdf 30 A breakdown of the dierent sources of this replacement demand is not available.31 UK Commission for Employment and Skills – Skills Sector Insights: Tourism: http://www.ukces.org.uk/publications/er55-sector-skills-insights-

tourism32 UK Commission fo r Employment and Skills – Skills Sector Insights: Tourism: http://www.ukces.org.uk/publications/er55-sector-skills-insights-

tourism33 http://www.yoursingapore.com/TravelRave/resources/TravelRave2013-Highlights-Report_Navigating-the-next-wave-in-Asia%27-Tourism.pdf


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2.5

• In some countries, especially those where Travel & Tourism is rapidly growing from

a relatively immature base, even where talent supply is increasing, the volume of

talent supply with specic industry qualications is only a fraction of the volume of

future Travel & Tourism talent demand.

• Looking ahead, future talent trends and demand vary globally in the sector. For

example34, in Canada talent short ages in Travel & Tourism are projected to increase

substantially as the baby‐boom generation retires. Although immigration and higher

labour market participation by women will partially oset the departure of baby

boomers, these two factors are not expected to be enough. The projected talent

shortfall is equivale nt to 10% of total employment, with shortages most severe for

food and beverage services35. In Hainan, China, a huge talent shortage is projected

given the predicted tripling in deman d in a short period of time36 while in Asia there is

predicted to be an 8 million talent shor tage by 2021 in Travel & Tourism37. The supply

of hotel managers is expected to meet less than ha lf of potential demand.

Travel & Tourism talent best practice policy

This sub-section rst highlights examples of general economy-wide and

Travel & Tourism specic talent best practice from literature. This is followed by four

case study examples: Singapore, Australia, Canada and Egypt.

Economy-wide talent best practice

The ManpowerGroup talent shortage survey38 report provides evidence on how

employers are bridging their talent gaps. It describes how HR managers need to focus

on three areas - people practices, talent sources and work models – but presently

employers are twice as likely to focus on people practices compared to both talent

sources and work models.

• Strategies employers are pursuing to overcome talent shortages in each of these

three areas include, among others:

People practices: Providing additional training and development to

existing staff, utilising non-traditional or previously untried recruit ment

practices, redefining qualifying criter ia to include individual who

lack required skills but have the potential to acquire them, incre asing

starting salaries and providing clear career development opportunities

during recruitment.

Talent sources: Adapting talent sourcing to recruit more untapped

talent pools, recruiting candidates outside the local region and country,

partnering with educational institutions to create curricula aligned to talent

needs and considering new locations to oper ate from where a larger and

higher quality pool of talent exists.

Work models: Increasing the focus on improving the talent pipeline,

redesigning work procedures, oering more exible work arrangements

and providing virtual work options.

• The ManpowerGroup talent shortage survey report also outlines the evolving role

of HR practitioners. They are now expected to be experts in supply and demand,

marketers (since talent is now also a savvy and sophisticated consumer) and

designers (thinking dierently how to structure work to access, mobilise, optimise

and unleash the potential of current and prospective employees).

• Countries where the environment is conducive to growth in Travel & Tourism

human resources have:

2.5.1

34 Note these examples are determined by the availability of literature evidence. As said above, a key nding from the literature review was the lack of

countries undertaking and publishing resea rch on Travel & Tourism talent issues, including producing projections.35 Canadian Tourism Research Institute – The Future of Canada’s Tourism Sector: http://cthrc.ca/~/media/Files/CTHRC/Home/research_publications/

labour_market_information/Supply_Demand/SupplyDemand_Report_Current_EN.ashx 36 http://www.whatsonsanya.com/news-18722.html 37 2012 Study by the Singapore Tourism Board (STB) and The Boston Consulting Group38 Manpower Group - 2014 Talent Shortage Survey Results: http://www.manpowergroup.co.uk/media/137404/2014_talent_shortage_wp_us2.pdf

• A strong customer service base

• A youthful workforce

• A exible labour market

• Positive perceptions of T&T jobs

• An open policy to hiring foreign, high quality labour

• Prioritised Travel & Tourism

• Less competition for jobs from other sectors such as retail

• Spare labour market capacity and female participation

• High quality company training of employees


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2.5.2 2.5.3General Travel & Tourism talent best practice

Literature ndings on general Travel & Tourism talent best practice can be grouped

under three headings: industry, education and government.

Singapore case study

• For Singapore only, its case study evidence covers both economy-wide and

Travel & Tourism talent best practice. Singapore generally is a regarded as an

exemplar for its talent policies.

Economy-wide talent best practice

• Singapore produces a Strategic and Skills-in-Demand List. This is a compilation

of occupations that are key to supporting the growth of key economic sectors in

Singapore. This also lists the skill-sets that are expected to be in strong demand

by industries in the coming years. Job-seekers refer to this list to help them in their

career planning.

• In addition to the Skills-in-Demand List, the Manpower Resources Guide is aninitiative by the Ministry of Manpower, in collaboration with several government

agencies and education institutions, to high light the sources of local manpower

from which companies can tap to meet their immediate and near-term manpower

needs. The guide outlines the specic skill sets in which Singapore’s new labour

supply will be trained, as well as the salary ranges of occupations. This helps

employers to nd and attract the right talent for their needs. In cluded in the guide

is a special feature on other viable sources of manpower (e.g. older workers and

return-to-work women), which is especially important in a tight labour market such

as Singapore’s. The guide also provides contact information for each manpower

resource to help employers recruit directly from specic sources.

• Both of the above examples clearly contribute to high quality, up-to-date and

transparent labour market intelligence which go a long way to eliminating

information asymmetries for employers, employees and students.

Travel & Tourism talent best practice42

• The Singapore Government has invested heavily in Travel & Tourism’s manpower

capabilities. This funding has represented a sizable share of total Government

spending on developing the industry, highlighting the recognition given to talent

and its importance to the sector. The goals of the funding included: ramping up

advanced specialist training in new niche tourism areas where gaps existed,

staying ahead of regional competitors, and increasing accessibility to new

education opportunities with the help of scholarships.

• Singapore has previously developed a Tourism Talent Plan in collaboration with

its Workforce Development Agency. The plan aimed to prepare the workforce to

meet a projected spike in manpower demand, driven by new tourism investments,

including two integrated resorts, and new events. The holistic three-pronged

approach comprised continuing education and training for adult workers, pre-

employment training for students, and industry development to attract more

workers to join Travel & Tourism. To enlarge the pool of workers with service skills

for tourism jobs, the Workforce Development Agency developed the

Certied Service Professional program (CSP), which extends portable skills

training in service excellence to workers who want to join the tourism sector.

INDUSTRY EDUCATION GOVERNMENT

Mainstream and prioritise talent

management as a central corporate

objective and have in place a talent

strategy39

Explore alternate talent sources

outside of rms and the

Travel & Tourism sector

Create partnerships to share part‐

time or seasonal workers between

businesses in Travel & Tourism and/

or other sectors

Oer dierent work options to suit

dierent workers (e.g. to females,

older workers etc)40

Provide clear career guidance

information and communicate

eectively with future talent pools

Oer clear career pathways to

young workers to promote

Travel & Tourism as a viable and

rewarding career option

Oer more apprenticeships

Greater corporate input to

Travel & Tourism education and

training design and teaching

Provide a sucient volume and

quality of Travel & Tourism-related

vocational training and accredited

apprenticeships

Have in place a sucient number

of Travel & Tourism educators so

that this does not act as a supply

constraint

Have a modern Travel & Tourism

course curricula, and standardise

and certify Travel & Tourism

qualications

Engage with industry and

governments to teach the right skills

for future employability

Undertake forward-looking

workforce planning and industry

talent research, including for

example, research to understand

investment required to address skills

gaps41

Have in place a Travel & Tourism

talent strategy at all education levels

including lifelong learning

Engage regularly with industry and

other stakeholders

Put in place supportive and

appropriate immigration policies

linked to the most acute industry and

occupation talent shortages

39 The survey of WTTC member companies showed that the majority of companies have talent strategies in place for both the immediate future and in

the short term (2-5 year s). However, this share drops to less than one-third for those that have a strategy with a longer term view.40 According to the survey, WTTC member companies oer a vast array of benets to many of its employees, including, among others: bonuses that

are based on the overall performance of the company: 94%; private healthcare: 78%; individual performance-related pay: 72%; share options for

employees: 53%; and subsidised childcare: 19%.41 European Commission 2012, “Rethinking Education: Investing in Skills for Better Socioeconomic Outcomes”

42 Navigating the next phase of Asia’s tourism: http://www.yoursingapore.com/TravelRave/resources/TravelRave2013-Highlights-Report_Navigating-

the-next-wave-in-Asia%27-Tourism.pdf


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2.5.4

2.5.5

2.5.6

2.5.7

Australia case study43

• A National Workforce Development Fund was set up by Service Skills Australia to

help individual enterprises and industry sectors expand their workforce capacity

by providing employers and workers with the opportunity to enhance their skills

through formal training. The fund, supported by the Australian Government as

well as the private sector, also helps to recruit and retain quality sta in the service

industries. The backing from the Australian Government was considered to give

the scheme credibility and status.

• By developing managerial skills as part of formal training, employees receiving the

training started to view roles within the Travel & Tourism industry as a more viable

long-term career path. With education and labour organisations involved in the

fund, participants were given the option of a range of training and development

opportunities including accredited courses, traineeships, apprenticeships,

workshops, short courses, non-accredited training and blended learning.

• As a result of the National Workforce Development Fund, Service Skills Australia

recognised better outcomes for both employees and employers within

Travel & Tourism. Overall skills were improved and sta turnover was reduced.

Canada case study44

• The overall goal of the Canadian Tourism Human Resource Council (CTHRC) is

to improve the quality and competitiveness of the Canadian tourism labour force.

Primarily, the CTHRC assists businesses with HR planning and training, as well as

oering consultancy services in the development of occupational standards, skill

standards, training, assessment, certication and administration.

• The CTHRC aims to reduce the impact of poorly trained employees on

customer service, revenue, job satisfaction and morale, benetting both

employees and employers.

• Direct backing from the Canadian Government, which fun ds all development

and updates of standards, training and certication programmes, has brought

recognition to the importance of standards within Travel & Tourism. The

programme and programme standards are further validated by their inclusion in

public and private education systems.

• Overall, the funding programme has proved successfu l, providing suitable

training resources to suppor t all levels of training in Travel & Tourism at both a

local and regional level.

Egypt case study

• According to COMCEC45, tourism in Egypt is set to grow in the next decade and

will have a signicant role in the sustainability of th e country’s culture, economy,

environment and state security.

• However, despite large-scale investment from the Government, domestic private

sector and FDI, Egypt’s international tourism competitiveness is being jeopardized

by poor service levels. Indeed this is conrmed later in the report by Egypt’s poor

ranking for its Travel & Tourism enabling environment which is a more serious issue

for the country than the s ector’s demand-supply balance projections.

• To address this, eorts are being made to improve the skills of personnel

employed in the tourism sector.

• The Ministry of Tourism, through the Egyptian Tourism Federation46, aims to

promote increased professionalism in management within the hotel and tourism

industry. It acknowledges the need to invest in human resources through continual

investment in academic and occupational skills.

• Training is demand-driven and takes account of market-needs and the education

system together. It primarily focuses on capacity building of senior managers andcreating a competitive and sustainable tourism product.

• Employees benet from industry-relevant skills upgrades, while organisations benet

from a stream of qualied sta to meet current and future needs within the industr y.

• The eective partnership between involved stakeholders - the Government,

industry and the education system - is indicative of the importance placed on

Egypt’s Travel & Tourism potential. The multi-strand partnership has ensured

consistent interest and focus on human resources and talent enhancement.

Lao National Institute for Tourism and Hospitalitycase study

• Located in Vientiane, the Lao National Institute of Tourism and Hospitality ’s (LANITH)

mission is to be the country’s most valuable touri sm education resource. It has

established a national tourism curriculum, using forward-thinking teaching methods,

and provides international-level training facilities, resources and equipment47.

• LANITH was set up in 2008 to maximise service and product capacity in

Travel & Tourism. It was developed with the support of L uxembourg Development

and formally accredited by the Laos Ministry of Education and Sports in 2013.

• LANITH provides training aimed at both school leavers and tourism professionals.

New students take a two-year Diploma in Tourism and Hospitality while the Passport

to Success training program is available to employees already working in the sector.

• Passport to Success started in 2011 and is now the biggest industry training

program in Laos, oering short vocational courses in areas such as customer

service, kitchen management and food production. To date, almost 1,000

hospitality and tourism sta have studied subjects such as customer service, food

and beverage operations, management and communications.

• LANITH were winners of the 2014 WTTC Tourism for Tomorrow People award. The

institute was recognised for developing tourism intelligently and sustainably, while

also ensuring that its Lao citizens benet from growth of the sector.

43 Standing Committee for Economic and Commercial Cooperation of the Organization of Islamic Cooperation (COMCEC), ‘Enhancing the Capacity of

Tourism Workforce In the OIC Member Countries For Improved Tourism Service Quality (2014).44 Standing Committee for Economic and Commercial Cooperation of the Organizatio n of Islamic Cooperation (COMCEC), ‘Enhancing the Capacity of

Tourism Workforce In the OIC Member Countries For Improved Tourism Service Quality (2014).45 Standing Committee for Economic and Commercial Cooperation of the Organizatio n of Islamic Cooperation (COMCEC), ‘Enhancing the Capacity of

Tourism Workforce In the OIC Member Countries For Improved Tourism Service Quality (2014).

46 www.etf.org.eg47 Pacic Asia Travel Association: http://www.pata.org/Members/6461


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Talent demand-supply balance &enabling environment analysis

The research uses two methodological approaches to assess the

country-by-country Travel & Tourism talent demand, supply and imbalances and the

talent enabling environment in each country. This chapter summarises the results

of the talent analysis. Results are presented rst for each of the two methodology

approaches, followed by the combined composite rank analysis. See Annex B for full

methodological details.

Talent demand-supply balance projectionanalysis

Quantifying the future Travel & Tourism talent demand and supply imbalance patterns

and trends is needed not only to identify how fu ture talent needs for Travel & Tourism

may dier from the economy as a whole, but also to look specically at where

geographical stretch points might be, when (e.g. in short, medium and/or long term) and

at what level of educational attainment (university, high school and below high school).

3.1

3.1.1

Source: Oxford Economics, WTTC

Caveat: This research is a rst step to building a rich and comparable g lobal evidence base on Travel & Tourism talent demand, supply and imbalances,

and the current talent enabling environment. But in order to deepen and broaden global Travel & Tourism talent analysis, and improve the robustness

of the analysis, other research stages could be undertaken, notably a bespoke industry survey with a much larger sample than achieved by the survey

of WTTC member companies, and in-depth consultations with a range of stakeholde rs. This should be borne in mind when viewing and drawing

conclusions from the results of this chapter.

Table 3.1: Top and bottom 5 countries for Travel & Tourismtalent demand and supply growth (2014-2024)

Top & Bottom 5 countries for Travel & Tourism talent demand and supply growth(Long-run, 2014-2024)

DEMAND RANK SUPPLY

1 1

2 2

3 3

4 4

5 5

42 42

43 43

44 44

45 45

46 46

THAILAND

TURKEY

TURKEY

SAUDI ARABIA

SAUDI ARABIA

PHILIPPINES

CZECH REPUBLIC

BAHRAIN

COSTA RICA

OMAN

OMAN

SOUTH KOREA

SOUTH KOREA

AUSTRALIA

AUSTRIA

RUSSIA

JAPAN

JAPAN

NORWAY

GERMANY

Travel & Tourism talent demand and supply projections:Long-run (2014-2024) top and bottom 5 growth

The top 5 and bottom 5 countries for Travel & Tourism talent demand and supplygrowth in the long-run to 2024 are presented in Table 3.1 below.

The top 5 rankings for both Travel & Tourism talent demand and supply future growth

are dominated by emerging economies in the Middle East and South East Asia, as well

as Costa Rica (demand) and Turkey (demand and supply).

The bottom 5 rankings are dominated by ageing European and North East As ian

countries, plus Australia (demand) and Russia (supply).


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Figures 3.1 to 3.4 overleaf chart the talent demand-supply balance projections across

the 46 countries for:

• The long-run (2014-2024) for all education attainment levels combined;

• The long-run (2014-2024) for all education levels combined versus the

Total Economy long-run outlook;

• The long-run (2014-2024) by individual education attainment levels; and

• The long-run (2014-2024) for all education levels combined versus the

medium-run (2014-2019) outlook.

Note recap the gures refer to the percentage point dierence in projected

Travel & Tourism talent supply growth minus projected Travel & Tourism talent demandgrowth. A positive gure refers to a trend talent surplus and a negative gure a trend

talent decit.

Travel & Tourism talent demand-supply balanceprojections: Long-run (2014-2024)

37 of the 46 countries are forecast to have decit Travel & Tourism talent trends

over the next decade, e.g. talent demand growth faster than talent supply growth (Fig

3.1). This is either because of strong projected growth in

Travel & Tourism talent demand, weak projected growth in Travel & Tourism talent

supply, or a combination of both.

The following 12 countries are projected to have the most acute decit

Travel & Tourism talent trends (demand growth more than 1 percentage point

faster than supply growt h): Thailand, Poland, Taiwan, Russia, Peru, Costa Rica,

Argentina, Sweden, Singapore, Italy, Turkey and Greece. For some of these

countries, the source of the talent trend decit is a combination of strong talent demand

growth (given the strong forecast for Travel & Tourism direct employment) and weak

talent supply growth (typically linked to weak demographics).

Of these countries, Greece and Italy, with current and projected high unemployment,

may be more able to avoid experiencing acute talent shor tages by drawing in the

unemployed to meet demand. Although this assumes a geographical matching of

where demand will be and where the unemployed reside, or a high degree of labour

mobility, which will not always be true.

In contrast, tight labour markets such as Singapore, where unemployment is low and

the economy is close to fu ll employment, and Travel & Tourism is a less attractive

career than the economy average job, may nd it dicult to avoid an acute talent

shortage. Perhaps for this reason it should be of no surprise that Singapore is a leading

case study for Travel & Tourism talent best practice because of the challenges and

pressures that it faces.

The Philippines and India are projected to have marginal Travel & Tourism talent

surplus trends (although talent supply growth is less than half of one percentage point

faster than demand growth). Given margins for error in the analysis and the relative

small size of the projected surplus trend, this should not be interpreted to mean that

these two countries will be immune to talent challenges. Neither of these two countries

ranks particularly strongly for their talent enabling environment. For both, apart from

the pillars for demographics and relative industry at tractiveness, they score relatively

poorly across other pillars.

Travel & Tourism talent demand-supply balanceprojections: Travel & Tourism versus Total Economy

Over the long-run to 2024, Travel & Tourism’s talent balance projectio ns are

considerably more challenging compared to the wider economy.

For the total economy, only 6 countries are forecast to have decit talent trends over

the next decade (one of which is Singapore), compared to 37 of the 46 for Travel &

Tourism (Fig 3.2). No countries are projected to have economy-wide talent deci t

trends of greater than 1 percen tage point, compared to 12 countries for Travel &

Tourism.

Travel & Tourism talent demand growth is faster than the economy average

employment growth in all 46 coun tries.

Travel & Tourism also has less favourable talent supply projections in two-thirds of

the 46 countries, although the dierences are relatively small. This is because Travel

& Tourism’s talent demand structure is more weighted towards lower education

attainment levels which are decreasing as a share of total labour supply in most

economies.

Travel & Tourism talent demand-supply balanceprojections: Education attainment level

Travel & Tourism talent balance projections vary signicantly by education attainment

level in the long-run to 2024 (Fig 3.3).

Compared to the analysis for all education attainment levels combined, fewer

countries (21 versus 37) are projected to have decit talent trends over the next decade

at college / university level. This gure rises to 3 4 countries at high school level and 43

countries below high school level.

For the number of countries with projected talent decit trends of greater than 1

percentage point, the gures are 10 for college / university level, 11 for high school level

and 32 for below high school level (recall the gure for all education attainment levels

combined is 12).

43 of 46 countries with projected tal ent decit trends at below high school level,

of which for 32 the decit is greater than 1 percentage poin t, is a striking nding.

Countries not forecast to have decit talent trends at college / university level include:

Philippines, India, Norway, Egypt, Australia, Germany, Colombia, Brazil, Indonesia,

South Africa, Morocco and China. Many of these emerging economies have seen a

rapid explosion in their recent supply of university-educated persons, a trend which is

expected to continue. Although the quality of all of the expansion in this new graduate

supply is often raised as an issue for concern, especially amongst multinationals

operating in these countries who can benchmark to other countries.

Countries forecast to have the largest decit talent trends below high school level

include: Thailand, Peru, Costa Rica, Czech Republic, South Korea, Russia, Poland,

Chile, Malaysia, China, Singapore, Mexico, Egypt and Greece.Continued high and

growing demand for below high school level talent – with the eect of technolog y

not seemingly replacing this demand (see box below) - and a declining share of the

labour supply with below high school attainm ent, are they key factors behind this

challenging talent projection for Travel & Tourism.

3.1.2

3.1.3

3.1.4


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Impact of technology on Travel & Tourism employment

Much has been written about the impact that technology has in replacing jobs in some industries – an issue on-going since the industrial revolution, but one

gathering pace with the combination of massive computing efci encies and the

“internet of things” being able to supplant jobs currently requiring cognition, and

therefore people, to perform.

According to the survey of WTTC member companies, HR managers believe

that future techn ology will only be able to replace Travel & Tourism roles to some

extent and mainly with support and administrative roles.

Tourism services benet and are enhanced by human interactions, yet HR

managers recogni se how the move in creating more self-ser vice opportunitie s for

customers could reduce certain stafng needs. At the same time, it is the training

for the expected introduction of new technologies over both the short and medium-

terms that HR managers most need to prepare their current workforce for.

Travel & Tourism talent demand-supply balanceprojections: Medium (2014-2019) versus long-run(2014-2024)

Slightly more countries (40) are forecast to have Travel & Tourism decit talent trends

in the medium-run (next ve years) compared to 37 in the long-run (next ten years

(Fig 3.4). The dierence is even greater when looking at the number of countries

with projected talent decit trends in excess of 1 percentage point (21 versus 12).

Countries with noticeably more acute medium versus long-run talent challenges

include: Bahrain, Morocco, Saudi Arabia, Malaysia, Oman, Switzerland and

Bermuda.

The reason for this is that demand growth is stronger in the medium versus long-run.

Travel & Tourism’s talent challenges are therefore clearly more than a long-term issue.

They are impacting on the sector today and will have a greater impact in the next 5 years

compared to the next 10 years. Given the lag between action and impact on the pipeline

of talent supply, interventions to boost Travel & Tourism talent supply, in volume and

quality terms, cannot be postponed. This is even more pressing where countries have

major events or new resort openings where talent demand is ‘lumpy’ and can spike, and

where countries have ambitious aspirations for Travel & Tourism with growth even faster

than assumed in the baseline demand scenario used in this study.

3.1.5

Fig 3.2: Balance between demand for andsupply of talent in the Travel & TourismSector versus Total Economy (2014-2024)

Travel & Tourism All education levelsLong-run (2014-2024)


Total Economy All education levelsLong-run (2014-2024)

Fig 3.1: Balance between demand for andsupply of talent in the Travel & TourismSector (2014-2024)

Notes: Trend talent surplus > 0; Trend talent demand-supply balance 0; Trend talent defcit < 0





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Travel & Tourism

Long-run(2014-2024)

CollegeUniversity level

HighSchool level

BelowHighSchool level



Table 3.2: Countries with projected talent decit trends < -1% (acute talent shortages)


Travel & Tourism All education levelsMid-run (2014-2019)



Fig 3.3: Balance between demand for and suppl y oftalent in the Travel & Tourism Sector by Education

Attainment Level (2014-2024)

Fig 3.4: Balance between demand for and supply oftalent in the Travel & Tourism Sector in the Long-Run (2014-2024) and Medium-Run (2014-2019)



-2.9

-1.4

-2.1

-1.4

-1.3

-1.6

-1.6

-1.6

-1.4

-2.5

-2.3

-2.6

-1.1

Travel & Tourism: Talent decit

All educationlevels

Long-run(2014-2024)

All educationlevels

Medium-run(2014-2024)

College / University level

Long-run(2014-2024)

High schoollevel

Long-run(2014-2024)

Below Highschool level

Long-run(2014-2024)

- - - -

- - -

- -

- -

- -

-

-

-

-

-

-

-

-

-

-

- - - -

- - -

- -

- -

-

-

-

-

-

-

- -

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

- - - - -

-

- -

-

-

- -

-

- - - -

- -

-

- - - -

- -

-

- - - - -

- -

-

- - -

- -

- -

-

- -

-

- - -

- -

- -

-

- -

-

- - -

- -

- -

- -

-

-

-

-

-

-

-

- -

-

-

-

-

-

-

-

-

-

-


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Travel & Tourism talent demand-supply balanceprojections: Expert feedback from WTTC membercompanies

In the survey of senior HR professionals of WTTC member companies, respondents

were asked to provide feedback on whether they perceived Oxford Economics’ country

or region talent demand-supply balance projections (the analysis above) to be either

too optimistic or pessimistic. This qualitative in-country/region and on-the-ground

expertise is helpful to complement and ‘road test’ the quantitative projection analysis.

In total and across all education attainment levels, and on balance, the projections

for the Travel & Tourism talent demand-supply balance were identied as being too

optimistic for 16 countries or regions, and too pessimistic for 11 countries/regions

(not all countries were covered by the survey so no feedback in Table 3.3 below is notnecessarily an indication of agreement with the projection). However in many cases

there was only one response per country so given the small sample, it is dicult and

would be wrong to draw strong conclusions f rom the survey responses for these

countries. In addition the projections refer to a

ten-year timeframe whereas the current situation in countries and the actual recent

experiences of WTTC member countries may have inuenced responses.

That said, two clear messages emerge from the feedback:

1. WTTC member companies believe that the futu re Travel & Tourism

talent environment will be more challenging than implied by the

quantitative demand-supply balance analysis, especially for countries

which rank better. In particular, and where there was a reasonable number

of country responses, there tende d to be unanimous strong opinions about

the demand-supply balance projection being too optimistic for India,

Germany and Morocco.

2. WTTC member countri es believe the outlook is not as challenging, or

the talent situatio n will not be as bad, for the following countries ranked

at the bottom: Thailand, Poland, Taiwan and Russia.

• China was an interesting case where there was a mixed response with 3

respondents saying the projection was too optimistic and 5 too pessimistic. This

may jointly reect concerns about meeting China’s strong talent demand outlook,

but at the same time condence in China’s proven track record of doing what is

necessary to realise its wider economy and sector-specic growth potential.

• In terms of broad responses by education attainment level, the feedback suggests

that demand-supply balance projections are too optimistic for university (e.g.

India) and high school (e.g. Morocco) level and too pessimistic for below high

school (e.g. Thailand) level.

3.1.6



Supply minus demand growth

(Long-run, 2014-2024)

Travel &Tourism

Feedbackfrom survey ofWTTC membercompanies

Too optimistic

Too optimistic

Too optimisticToo optimistic

Too optimistic

Too optimistic

Too optimistic

Too optimistic

Too pessimistic

Too pessimistic

Too pessimistic

Too pessimistic

Too pessimistic

Too optimistic

Too optimistic

Too optimistic

Too optimistic

Too optimistic

Too optimistic

Too optimistic

Table 3.3: Feedback from WTTC membercompanies on Travel & Tourismdemand-supply balance projections


19/35


In addition to feedback on whether the overall projections were too optimistic or

pessimistic, WTTC member companies also provided some useful additional insights

which are summarised below.

Countries where projections were deemed optimistic

• India: “India’s economy is on an upturn and there will be severe skill shortages in

the hospitality industry. It is already happening n ow.”

• India and China: “While China an d India may produce a lot of college graduates, many

of them chose not to st ay in the Travel & Tourism industry or aspire to go oversea s as

in the case of India. Also, in these two countries, Travel & Tourism expansions are into

tertiary markets where the educated may not chose to go work in.”

• GCC countries: “In the Gulf region countries, despite graduating from a fewhospitality colleges, the young nationals do not work in hospitality (as a result of

salary, culture and working times). Today, there is no structure to develop young

people in hospitality below high school.”

• Netherlands and France: “In the Netherlands and France, it will be more dicult

to attract people to the Travel & Tourism sector because of lack of exibility and

demands of the sector in exibility.”

• Japan: “Japan already faces diculty in recruiting quality human resources in the

lodging and ground transportation industries.”

• South Africa: “The South African education system is currently not progressing so

there will be an even greater talent shortage as currently experienced.”

Countries where projections were deemed pessimistic

• Poland: “The Poland forecast is too pessimistic. The Travel & Tourism market is

rather stable and compared to the existing nu mber of schools and faculties related

to this area, there is even a slight surplus of potential talents.”

• Thailand: “Thailand seems overly pessimistic as the number of people out weighs

the industry growth.”

Travel & Tourism talent demand-supply balanceprojections: Country comparison, Thailand versus India

Before turning to results for the Travel & Tourism enabling environment, it is helpful and

useful for illustration to compare talent demand-supply balance projections for two

countries with contrasting outlooks.

Thailand is projected to have acute Travel & Tourism talent decit trends, which are

even more severe than for the economy as a whole. Decit talent trends are projected

across each of the three education attainment levels in the medium and long-run , with

the decit trend more critical below high school level.

Fig 3.5: Thailand - balance between demand for and supply of talent in the Travel & TourismSector in the Long-Run (2014-2024), Medium-Run (2014-2019) and Short-Run (2014-2015)and By Education Attainment Level

• India is projected to have a modest Travel & Tourism talent surplus trend in the

long-run, similar to the economy as a whole. Surplus talent trends are projected

for college and high school level, but a talent decit trend is projected for below

high school level.

Fig 3.6: India - balance between demand for and supply of talent in the Travel & TourismSector in the Long-Run (2014-2024), Medium-Run (2014-2019) and Short-Run (2014-2015)and By Education Attainment Level





-4.5

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S ho r t- ru n ( 20 14 -1 5 ) M ed iu m -r un ( 2 01 4 -1 9) L o ng -r un ( 2 01 4 -2 4)

Economy:To tal supply minus

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T&T: Total skill weighted supply

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S ho r t- ru n (2 0 14 -1 5 ) M ed iu m -r un ( 20 1 4- 19 ) L o ng -r u n ( 20 1 4- 24 )

T&T: Collegeeducated supply minus

demand

T&T: High school educated supply

minusdemand

T&T: Belowhigh school educated

supply minusd emand

:

:

Thailand: Talent supply minus demand future balance Thailand: T&T supply minus demand future balance

India: Talent supply minus demand future balance India: T&T supply minus demand futu re balance

-0.2

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S ho rt -r u n ( 20 14 -1 5 ) M ed iu m -r un ( 20 1 4- 19 ) L o ng -r u n ( 20 1 4- 24 )

Economy:Tota l supply minus demand

T&T: Total skill weighted supply minus demand

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S ho rt -r u n ( 20 14 -1 5 ) M ed iu m -r un ( 20 1 4- 19 ) L o ng -r un ( 20 14 -2 4)

T&T: Collegeeducated supply minus

demand

T&T: High school educated supply minus

demand

T&T: Belowhigh school educated supply

minusdemand

:

:

3.1.7


20/35


Talent enabling environment analysis

An analysis of the literature identied the characteristics of a country that are important

in enabling the development and growth of talent for Travel & Tourism, the “enabling

environment”. These are:

• A strong customer service base

• A youthful workforce

• A exible labour market

• Positive perceptions of T&T jobs

• An open policy to hiring foreign, high quality labour

• Prioritised Travel & Tourism

• Less competition for jobs from other sectors such as retail

• Spare labour market capacity and female participation

• High quality company training of employees

Talent enabling environment: Overall and individual pillars

The top and bottom ve ranked countries according to the talent enabling environment

analysis are as follows (see Table 3.4):

Top 5 ranked: Qatar (rank 1 of 46), UAE, Switzerla nd, Singapore and

Malaysia (rank 5).

Bottom 5 ranked: Russia (ra nk 1 of 46), Egypt, Italy, Argentina and

Colombia (rank 42).

• Table 3.4 explains a country’s overall ranking by also showing its standardised

z-scores for each pillar. Z-scores for each variable within each pillar are provided

in Annex C.

• There are several dierent reasons why the countries listed above rank top and bottom.

• For the UAE and Qatar, ranked 1st and 2nd, demographics, labour market

exibility and openness are key pillar strengths. For Singapore, ranked 4th,

customer service, labour market exibility, openness, general quality of human

resources and training are the main pillar strengths.

• For Switzerland, ranked 3rd out of the 46 countries, it demonstrates global

excellence across a number of pillars – customer service, training, the general

quality of its human resources etc – osetting weaknesses in demographics,

spare labour market capacity and Travel & Tourism’s relative attractiveness.

Switzerland tops the INSEAD Global Talent Competitiveness Index and the WEF

Travel & Tourism Competitiveness Index (including the human resources pillar).

• There is therefore no clear ‘blueprint’ to achieve a top ranking talent enabling

environment score except to demonstrate excellence across a number, but not

necessarily all, pillars.

• For Russia, its bottom rank is explained by weaknesses in customer service,

demographics, openness, the prioritisation of the Travel & Tourism sector and

training. For Egypt its talent pillar weaknesses are in customer service, openness,

the general quality of human resources and training, more than osettingthe sector’s relative attractiveness as an employer and the high prioritisation

accorded to Travel & Tourism. For some of the lowly ranked European countries,

demographics are a key weakness, along with other factors: G

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