A leading academic has warned industry leaders that growing inequality, a “hollowing out of the middle classes” and “a loss of faith in democracy” threatens the growth forecast for travel and tourism.
Manuel Muniz, dean of the IE School of International Relations in Madrid, told global travel leaders: “If you think travel and tourism is immune to these trends you are fooling yourselves.”
Speaking at the World Travel & Tourism Council (WTTC) global summit in Buenos Aires, Muniz said: “Structural changes in the economy are hollowing out the middle classes. It will only worsen unless the causes are addressed.”
Growing inequality is reflected in “pessimism and anti-elite sentiment”, he said, in an “anti-liberal sense of barbarians at the gate” and in a “questioning of the liberal architecture” of the world.
He warned of “political convulsions and the collapse of the liberal order” and told industry leaders: “Some of the very optimistic forecasts at this summit will not come to fruition if this is not addressed.
“It will manifest itself in a weakening of the EU and a weakening of the global trading infrastructure.”
Muniz identified “wage stagnation and growing inequality” and a “major shift in the jobs market” – quoting a study suggesting 47% of jobs are at “high risk” of being lost to automation – and warned: “The relationship that fed the US middle class has ceased operating.”
Since 2008, he said, “95% of economic growth in the US has been captured by the top 1% of society. There are states in the US where kids have shorter life expectations than their parents.”
Muniz showed a video of US President Trump declaring “The American Dream is dead” and said: “He is correct.”
Responding to Muniz, Marriott International president and chief executive Arne Sorenson said: “Of course, this worries me. There are very real problems.
“[But] what worries me most is that it’s the simplest politics in the world to define an enemy, to say ‘There is someone to blame for this’.”
Sorenson said: “This industry by itself is not going to turn around inequality, but we can create jobs.”
Tui Group chief executive Fritz Joussen told the summit: “There is rising inequality, but the social market mechanisms in Europe are perhaps better than in the US.”
He added: “The tourism sector has outgrown global GDP every year for 17 years. Even a shock like Brexit, which caused a devaluation of the pound by 20%, has not led to less travel from the UK. How much proof do you need that travel is resilient?
“Some academics feel depressed, but the last 17 years mean I’m not prepared to be depressed. We should not be miserable. Our industry creates wealth and creates stability.”
Greg O’Hara, founder and managing partner of private equity firm Certares, agreed saying: “We have no data in the travel business to support what Manuel is saying.”
Yet Muniz insisted: “The impact of Trump on inequality is incredibly regressive. I’m concerned about what will come after Trump. I’m surprised how patient people have been.”
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