Updated: Apr 22
In this two-part blog travel sector leader and LVG Learning partner Patrick Richards analyses the role of education in tourism. In part 1 he analyses the negative impact arising from tourism’s neglect of investing in its people. In part 2, some solutions will be presented.
“We don’t need no education…” so said rock band Pink Floyd back in 1979. Unfortunately for the travel industry this has too long been the case. Years ago I remember an old boss haranguing me for including a £15,000 training budget, to support £2 million of headcount, as a waste of money. Of course, over the last decade, in many respects tourism has been the star pupil in the classroom of the global economy. As the WTTC reports, tourism accounted for one in ten jobs globally; one in six new jobs created; and according to the UNWTO from 2010-19, its growth in G20 economies of 32% outstripped overall growth by 300%.
These rosy headline figures mask deeper problems
Tourism consistently lags behind the rest of the economy in productivity. In 2015 the UK’s Office of National Statistics (ONS) released stark figures on travel’s poor performance. Stated in terms of Gross Value Added (GVA) on similar levels of employment, tourism produced only 55% of the value of the construction industry and a (truly awful) 28% of the manufacturing sector’s value. As a consequence pay was on average one third lower.
Tourism and hospitality are great at providing first jobs for young people
The ONS reported that 34% of jobs in the sector were occupied by under 25 year old; compared to 12% in the UK economy as a whole. However we fail to build on this great start. Staff turnover in the sector is up to 30%. Young people fail to stay in an industry which too often doesn’t invest in them. Career paths are ill-defined, especially compared to more professionalized industries with benchmarked attainment standards.
The UNWTO found that 41% of travel companies don’t have a training budget
So by failing to invest in education, does the sector treat its people like cannon fodder? Given these realities of underperformance, no wonder politicians have failed to take us seriously, leaving us feeling undervalued against other industries.
And then came the pandemic…
The WTTC estimate that since March, 174 million jobs have been destroyed in a global sector, previously employing 330 million. So now the spell has been broken, tourism can no longer be seen as an unstoppable job creating machine. Great people have left the sector permanently, taking crucial skills and experience with them. Additionally, young people looking to build a career may well decide not to join a sector which neither provides job security nor (sufficient) long term progression.
This is creating a significant problem for the future. Most pundits forecast the industry will return to 2019 levels by 2024/5. So jobs will come back, but in a different form.
How on earth will we attract talent into the industry when the rebound arrives? The problem may well be exacerbated, by the other major factor impacting travel’s productivity – technology. Until this year travel was also a laggard in IT. The pandemic has changed all this. Tech adoption has seen a dramatic acceleration, nowhere more than in the uptake of contactless.
But what of the other half of the equation i.e. the people to staff this technology revolution? 73% of World Economic Forum (WEF) delegates, sited machine learning as critical. Yet the OECD also report that 40% of AI jobs globally remain vacant, as they cannot find the right skills.
Once again, tourism has not woken up!
The UNWTO finding that 45% of travel companies have no plans to adapt “robotization,” meaning jobs that are both highly skilled and durable remain unfilled. This is not the only area of future growth. Millions of green jobs will be created in the transition to a carbon neutral economy and 85% of WEF delegates agreed that skillsets in Big Data were in the highest demand.
It might be gathered from the above that all future employment is destined to be tech based. However this is not true either. Good old customer service skills remain in short supply. This deficit pre-dated the pandemic, with again tourism and hospitality being a poor-performer; the UK ONS finding that 61% of tourism employers struggled to find these skills, compared to 47% in the economy as a whole. The way the wind is blowing, this situation is likely to get much more acute.
Tourism is set to become a lot more complex, with pre-existing trends only being accelerated by Covid. Consumers now want unforgettable experiences. Demand is also increasing for rural, less populated and thus less well known destinations. Travel professionals are well placed to deliver these experiences, but only if they are able to grasp the opportunity to expand their knowledge.
In part 2, we’ll examine the opportunities for tourism to rise to these challenges.