InCred Wealth September 27, 2020

How COVID-19 changed the contour of the Travel & Tourism industry?

For a traveller in general and the ‘Tourism’ industry in particular, the year 2020 began on a sombre note. The beauty of seeing places to connect with our inner-self came to a standstill, as the world rapidly descended into lockdown due to COVID-19. The ‘Travel & Tourism’ sector bore the major brunt of this chaos since the beginning of 2020 as COVID-19 went out of control and companies associated with it started laying off in big numbers to mitigate losses.

The sudden closure of borders, both domestic and international, to halt the spread of pandemic affected a large number of airlines and hospitality players and tour operators have had to cancel long-awaited holidays, leaving world tourism at an all-time low.

Shrinking economy

In 2019, as per www.esta.com, the global Travel & Tourism industry contributed $8.9 trillion to the world’s GDP, but the current pandemic has resulted in a total revenue loss of $195 billion to the tourism industry worldwide in just the first four months of 2020.

As per the United Nations Conference on Trade & Development (UNCTAD) policy brief, the tourism industry which is the world’s third-largest export sector (after fuels and chemicals) has suffered a major blow and 100 million direct jobs are at risk. UNCTAD estimates losses in the most pessimistic scenario, a 12-month break in international tourism, to be as high as $3.3 trillion or 4.2% of global GDP.

In 2019 tourism accounted for 7% of global trade and the report projects that export revenues from tourism, which support one in 10 jobs globally, could fall by $910 billion to $1.2 trillion in 2020. For small island developing states (SIDS), where tourism accounts for as much as 80% exports, the impact of the pandemic is devastating and has resulted in massive erosion of overall GDP.

Tourism is a critical sector of the international economy and is an important source of income and employment for developed and developing countries. The global contraction in this industry could have devastating economic consequences as some developing countries are highly dependent on tourism and all efforts should be made to mitigate the losses.

Hope at the end of the tunnel

However, all is still not lost as this catastrophic time is an opportunity to redraw the plans and reinvent with a renewed focus. In fact, the focus should be on developing a more sustainable tourism model, including a cooperative that will capitalize on economies of scale, use disruptive technologies and promote food security. Also, respective governments can offer appropriate social protection to cushion against any severe shock, including the COVID-19 pandemic.

It’s also important to align the effort of sustaining livelihoods dependent on tourism to the Sustainable Development Goals (SDGs) to ensure a more resilient, inclusive, carbon-neutral, and resource-efficient future. An approach to revive tourism should be earnestly taken with these things in mind:

Sustainability oriented green growth
Thrust on digital transformation
Creating livelihoods with minimal socio-economic impact
Spur competition and create multiple growth avenues

The way ahead for the Travel & Tourism industry and almost every other industry is to learn from this pandemic and devise smart strategies to protect the lives and livelihoods of millions around the world in the times to come.

Last but not the least, as thoughtful individuals, we can also contribute to the revival of the tourism sector in our own way by using this time to support travel bloggers, submitting pending travel reviews, choosing safe nearby local destinations for weekend stays and preparing our wish list of travel destinations and dream vacations in the hope to travel soon safely.

December 04, 2024

How COVID-19 changed the contour of the Travel & Tourism industry?