Ready to take flight again? The impact of Covid-19 on global tourism

The global travel and tourism industry experienced a consistent growth spurt in the past decade. In 2019, the sector contributed 10.3% to global GDP and surpassed the world’s overall economic GDP growth by 40%. Driving global economic growth, the sector was employing about 330 million people around the world. However, a complete worldwide ban on travel spanning several months has brought forth devastating challenges for the sector.

“Travel & Tourism is facing unprecedented challenges and an existential threat from the impact of the COVID-19 virus globally. It is essential that governments recognize this and ensure that Travel & Tourism is sustained through the crisis so that it can fulfil its vital role as a significant catalyst of global economic recovery and growth.” 

– Gloria Guevara Manzo, President & CEO World Travel & Tourism Council

Assessing the Impact

In March 2020, when the world shifted to lockdown mode, a vague picture of the future quarter was created in the minds of industry leaders. The anticipation became quantified when the UN report was unveiled on 25^th August 2020, basis UNWTO research findings. Depending on the complete lifting of travel bans, international tourist spending is expected to fall by US$ 910 billion to US$ 1.2 trillion. WTO also estimates that the pandemic has put 100 to 120 million direct tourism jobs at risk and projects an overall loss of 1.5% to 2.8% of global GDP due to the setback experienced by the sector.

The travel and tourism sector has displayed increased resiliency as the recovery time has decreased from 26 months to 10 months between 2001 and 2018. However, due to the interconnected nature of things, the shock of economic impact across sectors have increased, as visible in the afore mentioned projections. In this context, the industry needs to adopt a strategic approach, built on facts and experience, which focuses on business continuity to recover swiftly from the crisis.

WTTC recommendations for recovery

Central to a health crisis is the “panic factor” of masses. WHO projects 90% of economic losses from such outbreaks arise from uncoordinated and irrational public efforts to avoid infection. In order to bounce back, the sector needs to implement policies like improvement of travel facilitation, easing of fiscal policies, removal of barriers and destination support. Rebuilding confidence among consumers by ensuring travel safety is crucial to the sector’s quick recovery.

Ensuring a safe, secure and seamless travel experience

Quick implementation of digital technologies like use of biometrics and digital identity offer opportunities to make traveling safe, secure and seamless while boosting the sector’s recovery. In an instance, the boarding time of a 400 passenger capacity aircraft was reduced from 45 minutes to 15 minutes through improvements like use of biometrics. A WTTC research shows that travelers are willing to cooperate – 91% travelers are ready to undergo screening and testing while 93% are willing to share 2 weeks travel history. Key industry players must capitalize this opportunity and other will eventually follow.

New trend emerging – Locals travelling locally

The transformations forced by the outbreak of Covid-19 has left consumers confined in their homes for months. The need to step out is urgent but the guests of the new normal give utmost importance to safety. As a result, people are increasingly craving outings closer to home. In China, the tourism board of Suzhou launched ‘Locals Travelling Locally’ initiative to boost domestic travel. Such initiatives can also offer opportunities for other sectors like retail. The Bicester Village Shopping Collections’ nine Villages in Europe reopened on June 15 and have experienced steady growth as people are willing to venture out to high-quality experiential destinations that have adequate safety protocols in place.

Travel and tourism sector experienced an extreme blow but fortunately, but the emerging trends suggest, the worst is over. It’s time for the sector to rebuild and bounce back. Findings show that over 70% of travel spends stem from domestic travelers and that is where industry players must focus. After an intense forced digital engagement, consumers are willing to go out. Travel industry must collaborate with government and other industries to promote responsible tourism, adhering to strict health protocols to tread the path of quick recovery not only for the sector but the overall global economy as well.

Sources:

Reports: WTTC report – click here to read    UNWTO report – Click here to read