Weekly Buzz: The travel industry’s gearing up for take-off

New data suggests that the high-flying travel industry is set to go from strength to strength. Jam-packed tourist hotspots may look like a fleeting feature of post-Covid travel, but according to the World Travel & Tourism Council, this isn’t just a phase. Globally, we might be boarding a long-haul flight to a tourism-fueled future.

What’s going on in the travel industry?

The sector is expected to grow almost twice as fast as the wider global economy, and a lot of that impressive growth is set to come from China. Chinese tourists are in a lull right now, but by 2024, they are predicted to return in full force.

The US is currently leading in terms of contribution to the tourism industry, but China’s on track to take that crown. In the next decade, China is set to edge past the US’s anticipated $3 trillion contribution to the global industry with a whopping $4 trillion.

Strict lockdowns have tied the hands of the Chinese consumer for a long time, and when local restrictions were lifted, the domestic economy was the first beneficiary. But now that China has lifted pandemic-era restrictions on group tours for key countries, such as the US and Japan, tourism could be set for a resurgence.

What does this mean for me as an investor?

The World Travel & Tourism Council projects that the travel industry will balloon from its pre-pandemic value of $10 trillion to a staggering $15.5 trillion by 2033 – making up almost an eighth of the global economy. And with that kind of size, travel's poised to become a major job market player too, potentially fueling one in every nine jobs globally.

And it's not just the usual travel categories, like hotels and airlines, that are likely to get a wanderlust boost. Tourism can be an engine of growth for many related sectors – think of luxury goods and services, for example. So if you’re thinking of getting ahead of this tailwind, investing in a diversified portfolio that is exposed across a variety of industries (see: our General Investing portfolios) might be the way to go.

📰 In Other News: A penny pinch in the Eurozone

The European Central Bank (ECB) regularly measures the amount of money circulating around the Eurozone. And based on data out last Monday, total money supply (our Jargon Buster below breaks this term down) dropped 0.4% from the same time in July last year – the first time it’s shrunk since 2010.

More often than not, smaller numbers mean consumers are borrowing less. No surprises there, then: today’s higher interest rates are making borrowing more expensive. So without as much cash in their pockets, Europeans are spending less.

And in a bid to keep money coming in, stores and services will likely start pulling down their prices. That’s not necessarily a bad outcome, though: the ECB’s rate hikes were designed to calm heady inflation, and this could be a sign that the plan’s in motion.

This article was written in collaboration with Finimize.

🎓 Jargon Buster: Money supply

Money supply is the amount of money floating around in an economy. But it's not just bills and coins – it also includes money in the form of deposits, loans, and even your bank savings account. Economists keep an eye on the money supply because it affects how the economy behaves. If there's too much cash, things might get more expensive, and if there's too little, growth might slow down.

✨ StashAway’s 2023 H1 Returns and H2 Outlook articles are both out now!

We’re halfway through 2023 now, and it’s been rather hectic. From mini banking sector crises in the US and Europe, to the emergence of AI hype – it’s safe to say that we’ve gone through a lot so far. But there’s no need to feel out of the loop, we’re here to shed some light:

Our Returns in the First Half of 2023 - For the first half of the year, we’ve taken the bull market by the horns, and safely. See how our portfolios have performed year-to-date June 2023.

2023 H2 Market Outlook - For the second half of the year, we’re taking a step back to look at the bigger, longer-term picture, and why we see silver linings for future returns.