The Global Tourism Industry Should Brace For Losses Of Up To US$2.7 Trillion And Over 100 Million Jobs

By: KwNow - U of W News
| Published 05/22/2020


Global Tourism Is In For A Rough Ride With $2.7 Trillion In Losses And 100 Million Jobs

Governments, industry, and travelers must rethink the future of tourism

The global tourism industry should brace for losses of up to US$2.7 trillion and over 100 million jobs losses in 2020 according to the World Travel and Tourism Council.

The pandemic has highlighted many unsustainable aspects of global tourism and this crisis provides an opportunity for governments, industry, and travelers to rethink the future of tourism.

Daniel Scott is an expert in international tourism and has recently published new findings on the future of the industry. He answers questions below.

What will happen to international tourism in 2020 and beyond?

COVID-19 and our collective response has been catastrophic for an industry built on travel and people getting together. Never before has the global tourism economy been paralyzed so severely and so rapidly. At the end of April over 95% of the world was living under partial or full international and domestic travel restrictions, major events were cancelled worldwide, and hotel occupancy rates plummeted.

In the longer-term travel will be back, but the pandemic will transform tourism. Flying will not be the same for years, and perhaps is forever changed. New cleaning standards are emerging at hotels, cruise ships and attractions. Our collective forced experience with work from home and virtual meetings will alter the nature of work and business travel. Traveler anxiety will continue for some time and multi-generational family trips are likely to be on hold.

Will COVID-19 affect countries equally?

Domestic tourism will lead the recovery and with bilateral international travel ‘bubbles’ and ‘corridors’ emerging in places like New Zealand, Australia and Europe, other countries will be left behind.

Tourism dependent countries like those in the Caribbean will see their economies setback for years. We’re already seeing acts of desperation. For instance, Sicily is offering to pay for 50 per cent of flight and accommodations to bring people back.

Is there any good news for tourism?

Covid-19 will cast a long shadow on tourism, but we’re already seeing signs of a revival of domestic tourism in major markets and Canada’s governments need to prepare for this by helping businesses and destination communities get ready for a large increase in domestic tourists. Staycations will keep thousands of our tourism businesses alive in a pre-vaccine era and governments need to support this reduction in our international travel deficit with clear guidance for businesses and travellers, new ‘stay safe’ cleaning standards and consideration of safe ‘tourism zones’.

Aside from the massive downsides will there be significant opportunities in redefining how the tourist trade will behave in servicing the travelling public, with perhaps safety leading the way in this paradigm shift?

Yes, indeed. Like the post 9-11 transformation on security we will see a post-Covid transformation of health at airports, in accommodations and attractions. We are already seeing new airport screening processes and hotel cleaning/hygiene standards and marketing emerging, and we’ll continue to see innovation as tourism in its diverse forms begins to reopen. Airbnb emerged as a response to the economic crisis of 2008/09 and we should expect similar innovation to occur from the pandemic. Changes to the cruise industry, buffet restaurants and all-inclusive resorts, and low-cost air carriers will be part of a next normal in the industry.

Richer nations will no doubt have an easier time than developing nations. How will poorer nations keep up?

This is a vital question and the focus of the research we are continuing to do. Progress on the UN sustainable development goals in many countries with tourism reliant economies will be set back, potentially for years if the early projections on air travel recovery and traveller anxiety are accurate.

Will airlines need to rethink their services, their pricing, seating arrangements?

There is a major debate in Europe over physical distancing and leaving the middle seats empty in a pre-vaccine era. Doing so destroys the low-cost carrier business model and some have declared they will not fly if forced to do so. IATA estimated the average price of fares would go up 40-60% and the virtually no airline is profitable with a 66% load factor.

Might Domestic tourism be the winner here?

Certainly in the pre-vaccine era. Traveller intension surveys in the US, Europe and China all show travellers will be initially focused on travel by car and travel restrictions and mandatory 14 day quarantines (at destination and upon return) will keep travellers in their own country in most cases for the next several months. There are early discussions of bilateral travel ‘bubbles and corridors’ that may open up some international travel in regions like Europe over the summer and fall travel season. With the massive case numbers in the US, its not likely something we will see in North America this summer or the fall when a second wave is expected by health experts. So the government of Canada needs to support tourism destinations and businesses to focus on domestic tourism and staycations, which has a benefit of reducing our international travel deficit and keeping Canadians safe.

Travel & Tourism is the backbone of the global economy. Without it, global economies will struggle to recover in any meaningful way and hundreds of millions of people will suffer enormous financial and mental damage for years to come.”

Scale of the Crisis - WTTC Analysis

Travel & Tourism contributes 10.3% of Global GDP, is responsible for generating one in four of the world’s new jobs, and for nine successive years, has outpaced the growth of the global economy.

About Daniel Scott

Daniel Scott is an expert in international tourism. He is a Professor, University Research Chair and Director, Master of Climate Change Program. His current research program focuses on the human dimensions of global environmental change, climate and society, and sustainable tourism.