Disclaimer: The views expressed in this article are those of the author and do not necessarily reflect the views of the Economic Times – ET Edge Insights, its management, or its members

Tourism 1

With a complete freeze on international traveling, travel and tourism industry was expected to be among the worst hit sectors of Covid-19. The coronavirus pandemic hit Italy and Spain earliest and hardest. With a very high death rate, fatalities in both the countries mounted to thousands and brought public life to a complete halt.

Countries across the world experienced similar circumstances but Europe, America and Latin America experienced worst impact on public health. Adding to these woes is the likelihood of harsh economic loss due to declining tourism. As per the data from World Travel and Tourism Council, Tourism was a major contributor to these countries’ GDP in 2019 – Mexico (15.5%), Spain (14.3%) and Italy (13%).



The projected contributions to GDP include direct contributions from hotels, restaurants, airlines, travel agents as well as indirect contribution – billions of dollars that global tourists spend on shopping, entertainment, etc. The fact that four European countries – Spain, Italy, Germany and France feature in the top nine most likely to be worst hit nations of the world, clearly shows that Europe will be the greatest sufferer in the global tourism segment.

If this forecast comes true, the region will experience a ripple effect as the billions of Euros that international tourists bring to their shores would be completely lost. Imminent loss of livelihoods would be the most significant problem.

For instance, in USA, the impact of tourism was substantially lower at 8.6% of GDP, yet the industry is responsible for supporting over 6 million direct jobs. The total employment contribution amounts to 16.8 million jobs, as reported by WTTC. If one were to take these figures as the benchmark, the losses facing the European tourist hubs would be devastating.

This projection by Statista places India at a lower rung of the economic loss chart. Impact of travel and tourism industry in India was seen at 6.8% of GDP, ranking India at 12th position. While the economic and job loss is estimated to be considerably lower for India, in comparison with Spain, Italy and US, the pandemic will completely displace the industry from its impressive growth trajectory (from pre-pandemic times).

As the curbs are lessened and the world resumes international traveling, leisure traveling at least internationally would not gain much traction before a cure or vaccine is invented. Business travel would restart to some extent, but the numbers would be negligible in comparison to pre-pandemic period.

Although WTTC is encouraging governments globally, to make traveling more seamless and safe, it also advocates a shift in business tactics for the industry. WTTC urges industry players to shift focus from international tourism to local and domestic tourism. All over the world people have been confined to their homes for long enough and express willingness to travel closer to home, provided health safety protocols are followed.

Isolated instances from China and Europe show that experiential outing options that also club retailers have witnessed increasing footfall from local people. The need of the hour is innovation and dynamism. Like any other industry in the Covid-hit world, travel and tourism cannot keep operating as per the previous norms.

The industry must understand the sentiments and needs of the people and respond swiftly with packages and options that attract consumers nearest to home. Once the consumers are confident that safety norms are strictly followed, they will gradually start coming out.


Statista – Click here to visit page

WTTC report – click here to read

Disclaimer: The views expressed in this article are those of the author and do not necessarily reflect the views of the Economic Times – ET Edge Insights, its management, or its members

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