Tourism in a Pandemic: What’s Next for the Travel Industry?

Tourism in a Pandemic: What’s Next for the Travel Industry?
Updated date:
Jan 25, 2022

Tourism in a pandemic is almost an irony, or is it an oxymoron? 

Figures of speech sometimes confuse me. Anyways, 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. To say tourism and covid-19 do not mix well is an understatement. This adds (a grave) insult to (an already substantial) injury, as tourism is an essential component of several national economies. 

The quick and tremendous shock caused by the Coronavirus pandemic in the tourism industry affects the broader economy. In this article, we will discuss tourism before the pandemic and what the future holds.

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Before the Pandemic

In 2019, according to UNWTO, 1.5 billion international tourist arrivals were recorded. The Middle East emerged as the fastest-growing tourism region with an 8% increase in the sector. While other tourism-dependent countries saw a loss due to economic uncertain it

At the end of 2019, United States tourism had the highest contribution to country GDP at $580.7 (maybe because of its strong dollar), with China coming in second.

This, however, changed at the beginning of 2020.

In the Pandemic

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

A significant loss in 2020 has painted the first comprehensive image of a sector 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

Governments implemented travel restrictions in countries all over the world to curb the spread of the coronavirus. Airport closures, suspension of incoming and outgoing flights, and statewide lockdowns are just a few of the government’s measures 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 more significant than initially 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 to 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 complex, 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.

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The Hospitality Industry and 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 significant factors affecting the restoration of international tourism?

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

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 traveler 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:

Socially Distant Travel

Traveling before the pandemic had always had the stimulating effect of meeting new people and getting lost in a crowd. With social distancing measures, however, one will have no problem finding themselves alone with the sights. 

Group trips are also no longer viable as they widen the bubble for each individual. As such, tour guides have to shift their business to operate in the new world. 

This is because travelers and travel agencies have become more aware of the necessity to travel to areas that allow social distancing. And as long as travelers stick to practicing measures, the sooner tourism-dependent economies begin to recover.

Shifting Interests

If there is one thing about human wants, it is that they are fickle and can be changed many times. This will play a role in the type of attractions that will draw tourists, from places known for being crowded to less populated attraction sites. And also countries where the government has shown competence in handling Coronavirus.

This shift will also affect the airline industry as passengers eschew prices for hygiene standards. 

A New Niche

Are there certain people you can’t wait to see after the who brouhaha of the pandemic ends? - Yes, right?

And guess what? A billion other people in the world feel the same. But we don’t know when we can all fully travel at will again.

So don’t be surprised when a new niche service for reunion pops up on your travel agency’s brochure!

Wrap Up

No matter how bleak 2019 and even 2020 have been, the travel industry is opening up to new opportunities that nobody will want to miss.

I, for one, can’t wait to plan a ridiculous cross-country trip!

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