This year the Resort and Residential Hospitality Forum turns 10. In order to celebrate the occasion we are taking a look back to understand how the sector has changed and where it might be going. This article looks at the world of geopolitics and its impact on leisure tourism, with other stories set to follow. You can check out the full series, here.
If you cast your mind back to 10 years ago in 2015, the world was a very different place.
The global economy was characterised by low-interest rates which had been introduced as a response to the global financial crash of 2008.
Meanwhile, despite the Russian annexation of the Crimea from Ukraine in 2014, the world felt safe from any major wars occurring.
And there were reasons for further optimism as the world came together to address global issues, including climate change with 195 countries signing the Paris Climate Accord in 2015 which focused the awareness for greater sustainability across businesses.
The Trans-Pacific Partnership (TPP) was also agreed by the US under President Barack Obama with 11 countries in South America, Asia and the Pacific as barriers to trade continued to fall.
The centre gives
However, by 2016 the TPP was already falling apart while elsewhere there were signs emerging that the world was becoming an increasingly fractious place.
In June that year the British public voted for Brexit by a narrow margin of 52 to 48 per cent and started a process that would not be resolved until January 2020 when the country formally left the European Union (EU).
Elsewhere, Donald Trump beat Hillary Clinton in November 2016 in the US presidential elections before taking the office in January 2017.
Trump’s success in the US elections was mirrored across the Pacific in the same year, as President Xi Jinping won his second five-year term as the Chinese Communist Party’s party general secretary and consolidated his rule, becoming the most powerful leader of the country since Mao Zedong.
Initially, relationships between the two leaders were warm with both visiting each other’s countries that year but things quickly fell apart with Trump’s first tariff war starting in 2018 with more than $250 billion worth applied to China alone.
These tariffs grew to $300 billion in 2019, leading to China introducing $75 billion of tariffs on the US before an uneasy truce between the two countries was called by the end of the year.
Elsewhere, in 2017 Prince Mohammad bin Salman (MbS) came to prominence after this father the king named him as heir to the Saudi Arabian throne in June and launched his Vision 2030 strategy which details Saudi’s future as a post-oil economy while loosening its conservative social strictures.
Middle Eastern tensions were also growing, largely between the US and Iran, while a drone attack in 2019 that knocked out half of Saudi’s oil production was also blamed on Iran.
Climate change also became more of an issue with both 2016 and 2017 seeing record global temperatures while a particularly bad hurricane season in 2017 caused $290 billion of damage in the Caribbean alone.
Covid comes
But while 2019 might have ended poorly, 2020 was about to get a lot worse as the global Covid-19 pandemic both accelerated what was already changing as well as bringing a host of new problems to the world.
While first reports of the coronavirus began in Wuhan, China, in December 2019, the World Health Organisation (WHO) first declared it as public health emergency of international concern in January 2020 before labelling it as global pandemic in March.
Countries around the world quickly went into lockdowns while the global tourism industry collapsed as consumers were barely allowed to leave their homes, let alone take a holiday.
While lockdowns and restrictions on travel began to end in 2022, the pandemic took its toll with 7.1 million confirmed deaths as a result of the coronavirus according to WHO while a report by Cambridge University shows Covid has cost the global economy $82 trillion over the last five years.
But while the world was welcoming the end of Covid, new geopolitical issues emerged with Russia’s invasion of Ukraine in February 2022 blamed for driving an energy price shock after Russia, the world’s third largest oil supplier became a global pariah.
The growing energy prices combined with other high commodity prices, supply shortages and increased demand, which had been caused by Covid, to send inflation rocketing to a peak of 9.5 per cent globally and to as much as 10.8 per cent in advanced countries.
Interest rates have shot up globally as governments tackle the problem and ended the cheap money era, although since 2024 they have started to come down as inflation cools.
Tensions between the US and China have also grown since 2020 and not just because of the pandemic but also because of Joe Biden’s decision to keep certain tariffs in place following his election to the US presidency in January 2021.
And the situation has only got worse since Trump was re-elected at the beginning of this year with both countries introducing new tariffs, although a cooling off in May has led to a reduction in certain costs, if not an end to the overarching rivalry that now defines the two countries’ relationship.
But it wasn’t just China that has been targeted with tariffs this time, as his scatter gun approach saw tariffs applied globally to friend and foe alike, leading to a further sense of unease on a global scale.
Elsewhere, Trump’s dealings with Russia’s President Vladimir Putin over the Ukrainian war have left the world wondering not only if he supports a Ukrainian victory but even if the western military alliance NATO has a future.
Meanwhile, the Middle East was thrown into fresh turmoil on 7 October 2023 when the terrorist group Hamas attacked Israel from the Gaza Strip, killing 1,195 people.
The resulting Gaza war has been blamed for 65,000 Palestinian deaths and has also led to further action for the Israeli military which has seen escalating clashes with Hezbollah and Iran while emboldened Houthi rebels in Yemen have been launching attacks on international shipping in the Red Sea.
While the real world has seen increasing trouble since 2015, the online world is experiencing two key issues with cyber attacks growing with 72 per cent of cyber leaders telling the World Economics Forum this year that they have seen an increase in organisational cyber risks.
Generative AI is also just beginning to impact the world as consumers get increasingly used to technologies like ChatGPT which launched in November 2022 while businesses are hailing the impact it will have on creating leaner, more efficient companies while revolutionising scientific research.
Wherever it leads us, it seems guaranteed that disruption we have seen to global geopolitics in the last 10 years will continue as world finds a new order of existence.