Transcript International Conference of the Czech EU Presidency

International Conference of the Czech EU Presidency
« Trends in tourism employment and labour market »
WILL TOURISM REMAIN A DRIVER OF
EMPLOYMENT IN DEVELOPED COUNTRIES?
Prof. Peter Keller
Director, Institute for Tourism, Business and Economic
Faculty (HEC), University of Lausanne (Switzerland)
Prag (Czech Republic), 10 June 2009
Tourism is an experience economy whose part on total
employment is higher than its part at the GDP
21th
century
20th
century
19th
century
18th
century
1st
sector
2nd
sector
3rd
sector
4th
sector
Experience
economy
Service economy
Industrial revolution
Prevailing primary production
The employment of the hotel and catering business has
developed similar to the employment of the industry
120
110
100
Services (3rd Sector)
TOTAL Industry & Services
90
Accommodation & Catering
Industry (2nd Sector)
80
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
70
Source: Swiss Federal Office of Statistics, 2009
The employment potential differs between tourism
related industries
Tourism relevant full time equivalent of employment in %
Source: TSA Switzerland 2008
The below average productivity of the incoming
sector reduces its competitiveness on the markets
Incoming
sector
SME’s of destinations
Personalisation
Quality competition
Outgoing
sector
International travel industry
Standardisation
Price competition
Cost disease
Low margins
Shrinking productivity and
loss of competitiveness
Increasing productivity by
cutting labour costs
More than proportional reaction to economy-wide
fluctuations and crises makes tourism employment
volatile
12
10
8
6
4
2
0
15
20
10
20
05
20
00
20
95
19
90
19
85
19
80
19
75
19
70
19
-2
-4
Worldwide international tourist arrivals annual percentage change (last observation 2008) (UNWTO)
Gross Domestic Product (GDP), purchasing power parity (PPP) weighted, annual percentage change
(IMF WEO April 2009)
GDP projection IMF
Foreign employees compensate the lack of personal in
the more or less regulated hotel and restaurant
labour market
Closed labour market
Real salary
(w)
Open labour market
Real salary
(w)
D
Regulated labour
market for foreigners
Real salary
(w)
D
D
0(c)
0(f)
w(f)
0(o)
w(c)
w(o)
L(f)
Employment (L)
L(max) L(o)
Employment (L)
L(max) L(c)
Employment(L)
The increase of labour productivity leads to more
attractive and better remunerated jobs
Efficiency
Prices
with which inputs of
human capital and
natural resources are
used for developing
services
these services can
command in a open
economy by their
uniqueness and their
quality
(physical aspect)
(monetary aspect)
Service vs. self-service economy
The increase of labour productivity does not only
depend on education level
Long term
impact
Determinants of labour economy
Higher Education
Vocational Training
Research & Development
Learning at the destination
Learning on the job
Short term
impact
Investment Structures
Markets
Summing up:
Balance of factors which stimulate or reduce tourism
employment in developed countries
Factors that stimulate employment in tourism
+ Rise of the experience economy
+ Tourism’s growth potential
Factors that reduce employment in tourism
- Dependence on economy-wide fluctuations and crises
- Productivity gap and trend to self-service economy
Positive but moderate growth of employment