There is not an industry in the world today, that has gone unscathed by the COVID 19 crisis, but travel and tourism’s tumultuous decline touch a raw nerve in us, and somehow brings the reality closer to home, than we want to admit. With most countries following the domino effect of worldwide lockdowns and border closures, has dealt a further blow to an average tourists’ aspirations.
Most island nations depend on visitors from overseas, but large economies worldwide will also see drastic spending declines when the coronavirus stops traveling. The UN World Tourism Organization counted 1.4 billion international tourist arrivals in 2018, and, well before this crisis, had predicted 1.8 billion arrivals by 2030.
In 2018, the global economy was funded by travel and tourism for $8.9 trillion and accounted for 10.4% of the overall economy. The World Tourism Forum Institute reports that 319 million jobs are generated around the world by travel and tourism. With virtually all travel halted, recovery will take its course.
Travel will bounce back eventually – it has to be back, far too many jobs directly or indirectly rely on this industry, which employs more than 10% of the global workforce, as per one study published by Skift in 2016. Its from small time daily wage force, to farmers who supply hotels with produce, to drivers who ferry tourists, and tour guides and street hawkers, and souvenir shops and beyond, millions of people rely on business generated by travelers. But the way we travel will undergo a dramatic transformation.
With governments locking their borders and people staying home around the world to help avoid the spread of the coronavirus, many businesses struggle to survive. In the United States and the United Kingdom, at least 3 national carriers have filed for bankruptcy. U.S. carriers have agreed as part of the US Government stimulus program to stave off defaults by accepting $58 billion in loans and payroll grants. In the cruise industry too, the pandemic triggered bankruptcies and the image of cruises for hassle-free travel was definitely hit.
Which countries stand to lose the most? World’s 20 biggest economies, Thailand and the Philippines rely on tourism for more than a fifth of their GDP. Also Spain and Italy, which are heavily dependent on the industry, are two of the most affected coronavirus-affected countries. South Korea, which relies on tourism, treats its outbreak the most effectively.
Tourism in the USA is going to be essentially at a disadvantage due to the scale of the economy in absolute numbers. In most cases of coronavirus, six of the top ten countries in the world are also ranked among the top ten countries by tourism revenues, which indicate a good link between the rate of travel and infection spread.
However, the most serious economic destruction will likely be seen in the small island nations that staked their entire economies on overseas visitors visiting their beaches and resorts. 15 of the 20 most GDP-dependent countries on travel and tourism are small island nations. Iceland, with a deeper decline in its economy after the financial crisis of 2008, will again lose, with travel and tourism responsible for more than a third of its GDP.
Finally, barely a month into the crisis, many are fondly remembering and recalling the good old days of freedom to travel with deep nostalgia. It is now upto each individual government, how they make tourism the cornerstone of their ‘recovery’ strategy, as ONLY this industry can serve as a quick balm to heal mentally, recreates immediate FDI for the economy, and restore that human emotion to reconnect face to face.
”Sumaira IsaacsCEO, Global Tourism Forum