According to a report from fDi Intelligence, global foreign direct investment (FDI) in the tourism industry is rebounding after declines in 2020 and 2021 due to the COVID-19 pandemic. The report shows that while international travel continues to recover, the number of new greenfield FDI projects and job creation in tourism increased 23% in 2022 compared to 2021.
The tourism industry was hit especially hard by pandemic travel restrictions and lockdowns. FDI project numbers dropped 59% in 2020 compared to pre-pandemic levels in 2019. Capital investment fell even more sharply, decreasing 70% from $60.9 billion in 2019 down to $18.2 billion in 2020.
While tourism FDI has not fully recovered, the tentative rebound suggests the industry may be turning a corner. Western Europe was the top destination region for new tourism FDI projects in 2022.
In the Asia-Pacific region, inbound tourism FDI increased slightly by 2.4% in 2022. China received the most projects in the region from 2018-2022, though its share has fallen as inbound investments have declined since it peaked in 2019. India took the top spot among Asia-Pacific destinations for tourism FDI projects last year.
The hotel and tourism sector accounted for nearly two-thirds of all new tourism FDI projects over the last five years. Accommodation remains the largest tourism sub-sector, capturing over half of all FDI projects globally. However, the share of projects going to software and IT services has steadily grown, indicating an increasing focus on digitalization.
While full recovery will take more time, the report suggests global tourism FDI may be through the worst declines of the pandemic period. With travel rebounding, investors appear to be slowly regaining confidence to deploy more capital into new tourism projects worldwide. However, the pace and breadth of the rebound remains uneven across regions.
