Tourism and Travel Post-Covid: What Now?

Table of Contents

The Crisis of COVID-19 has damaged so many key businesses, particularly those that depend on human movements. 

Yes, travel, tourism and hospitality are the worst hit.

This adds up to (a very serious) insult to (an already substantial) injury, as tourism is an important component of several national economies and the quick and tremendous shock caused by the coronavirus pandemic in the tourist industry affects the wider economy.

The Annual Economic Impact Report (EIR) of the World Travel & Tourism Council exposes the entire catastrophic impact of COVID-19- last year's tremendous loss of over US$4.5bn on the global travel and tourism business.

 

Great loss in 2020 has painted the first comprehensive image of a sector that is fighting to survive, facing needless travel restrictions and quarantines that continue to jeopardize the international economy's emergency recovery.

Global outlook


Border closures, tourism restrictions, and a travel ban

Travel restrictions were implemented in countries all over the world in order to curb the spread of the coronavirus. Airport closures, suspension of incoming and outgoing flights, and statewide lockdowns are just a few of the measures that governments are doing to help contain the pandemic.

Following the pandemic's expansion in the first two quarters of 2020, at least 93% of the worldwide population lived in nations having coronavirus-related travel restrictions, with approximately 3 billion people living in countries enforcing total border closures to foreigners.

Losses are worse than expected

UNCTAD projected in July last year that a four- to 12-month halt in foreign travel would cost the world economy between $1.2 trillion and $3.3 trillion, including indirect expenses.

However, the losses are greater than originally expected, as even the worst-case scenario projected by UNCTAD last year turned out to be optimistic, with foreign travel still restricted more than 15 months after the pandemic began.

According to the UNWTO, worldwide visitor arrivals fell by around 1 billion, or 74%, between January and December 2020. The UNWTO World Tourism Barometer predicts an 88 percent drop in the first quarter of 2021.


Job losses in various nations

According to the analysis, a decrease in tourism produces a 5.5 percent increase in unskilled labor unemployment on average, with a wide range of 0 percent to 15 percent depending on the importance of tourism to the economy.

In both rich and emerging economies, labor contributes for approximately 30% of tourist service spending. Entry barriers are relatively low in this sector, which employs many women and young people.

Failures of Covid-19 and Airlines

Although losses are likely to be reduced in 2021, the industry's recovery is expected to be lengthy and difficult, causing a coordinated restart.


  • LATAM: To date, Chile's LATAM is the largest airline to file for bankruptcy protection in the United States in May because of the epidemic. LATAM says it would continue to fly while resolving its problems in bankruptcy court.
  • Avianca Holdings: Avianca, South America's second-largest carrier, survived the Great Depression–but not coronavirus. In May, the airline filed for Chapter 11 bankruptcy protection. Avianca, like LATAM, will continue to fly during the restructure.
  • Virgin Australia: After over 20 years of business, the country's second-largest airline, Virgin Australia, filed for voluntary administration, the equivalent of bankruptcy restructuring. It is the largest airline in Australian history to go bankrupt.
  • Flybe: Prior to the coronavirus, the British regional airline Flybe was suffering, and both the UK government and Virgin Atlantic attempted to save it. However, in March, the airline entered voluntary administration, which is equivalent to bankruptcy.
  • Miami Air International: After 29 years in business, Miami Air International filed for Chapter 11, then ceased operations.

The Hospitality Industry Has Been Affected by the Lockdown

The pandemic's lockdown has had a global impact on the tourism industry, with the hotel business taking the brunt of the damage. When STR compared 2020s first quarter status to 2019 figures, hotel occupancy rates decreased as much as 96 percent in Italy, 68 percent in China, 67 percent in the United Kingdom, 59 percent in the United States, and 48 percent in Singapore.

The pandemic and lockdown have had a significant impact on the hotel industry.

What are the major factors affecting the restoration of international tourism?

Experts believe that travel limitations, together with sluggish virus control and low consumer confidence, are the biggest impediments to international tourist revival.

On the comeback trail

Scenarios for the years 2021-2024

Foreign arrivals are improving this year, assuming a gradual reversal of the pandemic, introducing a COVID-19 vaccine, an enormous improvement in traveller confidence, and a significant relaxing of travel restrictions by the middle of the year. The expected comeback is also a result of significant pent-up demand following months of restricted borders and travel bans. 

The recovery is likely to continue in 2022 as travel conditions improve and the pandemic is brought under control globally. However, foreign tourism could take another 2 and a half to 4 years to recover to pre-crisis levels. The following are the recovery times for each scenario:



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