Appendix A

The Travel & Tourism Development Index (TTDI) is the evolution of the World Economic Forum’s long- running Travel and Tourism Competitiveness Index (TTCI). The section below provides an overview of the changes made between the two indexes and the impact on results.

The 2021 TTDI is not a completely new index, but is instead a direct evolution of the TTCI series. The revised index name reflects the index’s increased coverage of travel and tourism (T&T) development concepts, including the growing role of sustainability and resilience in T&T growth, and is designed to focus more attention on the sector’s role in broader economic and social development. It also covers the greater need for T&T stakeholder collaboration and integrated development strategies (local, regional and international) to mitigate the impact of the COVID-19 pandemic, bolster the recovery and deal with future challenges and risks.

While the framework and methodology of the index have been updated, they remain related to earlier TTCI editions. These editions have always looked at the concept of “competitiveness” as a means of developing the T&T sector and thus measured the elements that enabled such development.

The Travel & Tourism Development Index thus measures the set of factors and policies that enable the sustainable and resilient development of the Travel & Tourism (T&T) sector, which in turn contributes to the development of a country.

Work on the new TTDI began after the publication of the Travel & Tourism Competitiveness Report 2019: Travel and Tourism at a Tipping Point. The report looked at challenges such as overcrowding, unbalanced distribution of T&T economic benefits and damage to tourism-generating natural and cultural assets, which ultimately diminished liveability for residents, created local backlash against T&T development and harmed visitor experiences. Combined with the long-term threat of climate change and consumers’ increasing concern about sustainability, the report emphasized that continued sector growth and resilience will become progressively dependent on effective sustainable destination and business management. Therefore, it highlighted the imperative need for tourism- development strategies to focus on addressing these specific challenges rather than just increasing visitor numbers.

In more recent years, the impact of COVID-19 has further demonstrated the need for the T&T sector to build resilience and has starkly highlighted the role that socioeconomic conditions, healthcare, social protection, working conditions and ICT investment play in sector development and longevity. Consequently, it is not only vital that the sector recovers, but that it does so in a way that incorporates lessons learned from the current crisis and makes it better prepared for future headwinds, many of which are historic and long term in nature.

To incorporate these ideas, the TTDI’s framework has added particular emphasis on sustainability and resilience concepts and has been designed to create a new baseline from which sector stakeholders can benchmark their T&T economies’ recoveries to build back better.

The new framework for TTDI has been created with input from T&T stakeholders through various workshops, events, interviews and, importantly, the support of an Advisory Group that includes representatives from Bloom Consulting, the International Air Transport Association (IATA), JLL Hotels & Hospitality Group, the Pacific Asia Travel Index structural changes Association (PATA), the University of Surrey, the World Tourism Organization (UNWTO) and the World Travel and Tourism Council (WTTC).

Figure A1 and Table A1 provide a summary of the changes made between the TTDI and earlier TTCI frameworks and methodology. For more information on the previous version of the TTCI, please see Appendix B of the Travel & Tourism Competitiveness Report 2019 at http://reports.weforum.org/travel-and-tourism-competitiveness-report-2019/methodology2/.

Figure A1: Index structural changes

Table A1 | Reasoning for changes between the TTDI and TTCI

To quantify the differences between the TTCI and TTDI, we have compared the published TTCI 2019 with the TTDI 2019 results for the 117 economies represented in both indexes. The TTDI 2019 results are based on applying available 2019 data to the TTDI’s updated methodology and framework.

Please note that the explanations below are not exhaustive and seek only to provide a broad understanding of the impact of changes on outcomes.

As Figure A2 shows, the overall relationship between the results of the TTCI 2019 and TTDI 2019 is quite strong, and deliberately so, as many of the comprising indicators and factors remain similar.

Figure A2: TTCI 2019 vs. TTDI 2019 relationship

However, as Figure A3 highlights, on a more granular, individual-economy level, the changes to the index have a significant impact, with close to half of the 117 economies covered shifting their rank by six or more positions in either direction within the new TTDI framework. The average score for the bottom quarter of economies in the TTCI 2019 improved by 2.3% when measured in the TTDI, while the average score for the top quarter of economies experienced a 0.7% decline, indicating a decreasing gap in the performance of leading and lagging economies using the new methodology. Overall, 62 economies show an absolute increase in score, while 55 experience an absolute decline.

A3: Rank change summary, from TTCI 2019 to TTDI 2019

The impact of the changes can also be observed on a peer-group level. As Figure A4 shows, the changes result in an average score increase of 0.7%. High- and low-income economies benefit from the changes, while middle-income economies perform lower relative to the TTDI average. On a regional basis, shifting to the new framework, we can see that most of the methodology-related improvement in score occurs in the Middle East and North Africa (MENA) and Europe and Eurasia (Europe) regions, while the remaining regions relatively decline in performance. Further statistics on the composition of economies that improve or decline in score between the TTCI and TTDI can be seen at the end of Appendix A.

Figure A4: Peer group average % change in score, 2019 TTCI vs. 2019 TTDI

The increase in the number of pillars from 14 to 17 and the use of pillar average (arithmetic mean) instead of subindex average for the new TTDI computation means that each pillar is weighted at about 5.9%, while in the TTCI, Enabling Environment pillars were weighted at approximately 5.0%, T&T Policy and Enabling Condition pillars were 6.25%, Infrastructure pillars were 8.3% and the Natural and Cultural Resources pillars were 12.5%. As a result, economies that tend to perform worse in areas outside of the Enabling Environment pillars benefit from the new computation method and vice versa. In absolute terms, this had a positive impact on more than half of the outcomes due to Enabling Environment pillars tending to be the highest-scoring pillars for most economies. Middle East economies were penalized less for often low scores in areas such as natural resources but benefitted from better- performing and more heavily weighted Enabling Environment pillars. On the other hand, many states in the Americas performed relatively worse from the change in the number of pillars and pillar weights because of their combination of now lower-weighted but rich natural resources and higher-weighted but underperforming Enabling Environment pillars such as Safety and Security.

The introduction of three new pillars, namely Non- Leisure Resources, Socioeconomic Resilience and Conditions, and T&T Demand Pressure and Impact, has also had a significant effect on scoring. In particular, the first has a largely negative impact on index performance because uneven distribution of factors such as major corporate headquarters or leading universities means that it is one of the lowest-scoring pillars for most countries. Similarly, the T&T Demand Pressure and Impact pillar also has a slight downward pressure on outcomes. However, that pressure is disproportionately felt among European economies that have had historical issues with sustainable tourism flow, including high seasonality and short-trip stays. On the other hand, on average, the Socioeconomic Resilience and Conditions pillar scores tend to be higher than the overall TTDI score for most economies, resulting in a positive absolute impact in outcome for most.

Lastly, the addition of new indicators and adjustments to remaining pillars also affected the difference in results between the TTCI and TTDI. Of the 94 indicators constituting the 14 pillars that are both in the TTCI and TTDI, about 45% are new, with some of the others having adjusted methodologies or sources. To help present this, Table A2 shows the strength of the relationship between the pillars shared by the TTCI and TTDI and the average change in performance. We
can see that the Environmental Sustainability, International Openness and Tourist Service Infrastructure pillars have the lowest relationship strength, with the latter having an especially weak relationship.

In general, the impact on pillar scores is mixed. On average, some of the largest improvements in scores come from changes in the Culture Resources, Air Transport Infrastructure and International Openness pillars, while the most significant decline comes from the Health and Hygiene, Business Environment and Natural Resources pillars.

Table A2 | Average score change in pillars between the 2019 TTCI and 2019 TTDI

Out of the 117 economies covered in the 2019 TTCI and TTDI, 62 have an absolute positive change in score and 55 have a decline. However, 17 economies had a change of less than 1.0%.

Figure A5: Composition of economies that improved/declined in score