Emerging tourism destinations can offer investors the opportunity to buy in on the ground floor.
Of course, as the term “emerging” should suggest, such destinations still have work to do. They are growing quickly and offer many opportunities, but since they are not yet fully established there is clearly risk involved.
An annual report by the World Travel and Tourism Council showcased the top 10 countries expecting the most rapid growth in tourism and travel for the coming decade. Topping the list was China, with an expected 9.1 percent annualized growth in demand, followed by Montenegro at 8.6 percent and India at 7.9 percent. The report’s findings could indicate opportunities for investors, because all three countries have been top performers on the Council’s rankings in each of the last four years.
Top 10 Emerging Tourism Markets
2007 to 2017
Percent of projected annualized real growth
1. China: 9.1 percent
2. Montenegro: 8.6 percent
3. India: 7.9 percent
4. Croatia: 7.8 percent
5. Democratic Republic of Congo: 7.8 percent
6. Vietnam: 7.5 percent
7. Romania: 7.4 percent
8. Namibia: 7.1 percent
9. Hong Kong: 7.0 percent
10. Chad: 7.0 percent
China secured the top spot with help from the impending Olympic Games, which will be held in Beijing in 2008. China is also planning an international travel and tourism forum to be held in Guiyang this fall, where regional and international leaders will share knowledge and pursue further growth strategies.
Nipping on China’s heels is a lesser known destination that is quickly becoming popular. Montenegro, which ranked first on the WTTC list in 2006, has seen large gains since implementing its tourism master plan in 2001. Montenegro’s plan revolved around privatizing hotels and other tourist assets, adopting an open skies policy and creating a competitive business environment. €350 million has been invested in hotel modernization and renovation by Montenegrin investors, according to the WTTC. (For a detailed profile, see our article on investing in Montenegro.)
While the WTTC predicts continued growth in the country, it is not without some risk. In order to sustain a long-term tourism market, Montenegro must make tourism a top priority for economic growth, in part by continuing to cultivate tourism in its smaller regions, according to the WTTC.
Both the Democratic Republic of Congo and Chad made it into the top 10 because of sudden increases in their economic and tourism sectors. Both destinations are making their first appearance in the WTTC’s top 10. Both countries carry significant risk because of their tumultuous political situations.
Namibia holds a great deal of potential; however, unlike Montenegro, it has not yet fully implemented plans to capitalize on its tourism market. Developing a profitable airline service, wildlife resorts and community-based tourism strategies are a few ways Namibia hopes to transform its tourism market. For the adventurous investor, this could mean a great opportunity, but for most, the situation in Namibia may be a “wait and see.”
When investing in emerging markets, investors have to constantly weigh their comfort with risk. The sooner investors get into a market, the more money they stand to make, and the more risk they shoulder.
The World Travel and Tourism Council’s top 10 is rounded out by Croatia, Vietnam, Romania and Hong Kong.