‘The COVID-19 pandemic, a global crisis like no other in modern history, has led to a sudden stop in travel and a collapse in economic activity worldwide. A major economic driver, tourism accounts for more than 10 percent of the global economy and in many countries a large share of exports and foreign exchange earnings. The industry is also highly interconnected; multiple sectors are dependent on its performance. The pandemic has had severe repercussions on the complex global tourism supply chain, putting millions of tourism jobs at risk. Informal and migrant workers, particularly women and youth, have suffered disproportionately from diminished employment opportunities and lack of access to social safety nets, leading to increased poverty and slowing progress toward the UN Sustainable Development Goals.’ – Excerpt from a recent report by the International Monetary Fund ‘Tourism in the Post-Pandemic World: Economic Challenges and Opportunities for Asia-Pacific and the Western Hemisphere’
In an article ‘Wish you were here’, Adam Behsudi traced the rise of tourism over the last 70 years, and that how the pandemic virtually caused nose-dive of the sector. In this regard, he pointed out ‘Before COVID-19, travel and tourism had become one of the most important sectors in the world economy, accounting for 10 percent of global GDP and more than 320 million jobs worldwide.
In 1950, at the dawn of the jet age, just 25 million people took foreign trips. By 2019, that number had reached 1.5 billion, and the travel and tourism sector had grown to almost too-big-to-fail proportions for many economies.
The global pandemic, the first of its scale in a new era of interconnectedness, has put 100 million jobs at risk, many in micro, small, and medium-sized enterprises that employ a high share of women, who represent 54 percent of the tourism workforce, according to the United Nations World Tourism Organization (UNWTO).’
The pandemic has had a particularly high negative impact on economic growth of countries that are highly dependent on tourism, for instance, many countries in Latin America, and the Caribbean. Published in August last year, Eric Parrado in an article ‘Latin America’s triple sudden stop’ had pointed out ‘Travel restrictions have also affected international businesses and tourism. According to the Latin American and Caribbean Air Transport Association, airlines operating in the region carried just 1.08 million passengers in April, down from 35.3 million the previous year. Tourism, which accounts for one in ten jobs and an average of 18 percent of GDP in the smaller LAC [Latin American and Caribbean] countries, is also in a slump. It is still unclear when the sector will be able to reclaim its vital role in the region.’ Similarly, in the same article, Adam Behsudi highlighted ‘Tourism-dependent countries will likely feel the negative impacts of the crisis for much longer than other economies. Contact-intensive services key to the tourism and travel sectors are disproportionately affected by the pandemic and will continue to struggle until people feel safe to travel en masse again.’
‘Global cooperation and guidelines on health and safety protocols, and secure platforms that unify a consortium of individuals, governments, and the travel industry in sharing information would provide tourists with good practice guides and information on travel requirements– such as a negative viral test and health insurance coverage’
As things panned out, the same IMF Report, published a few days ago ‘This departmental paper focuses on tourism-dependent countries (TDCs), where the contribution of tourism and related sectors was above 10 percent of GDP during 2016–18 and accounting for a large share of export revenues. Tourism also contributes significantly to employment, with above 300 million globally, … The COVID-19 pandemic has had an enormous impact worldwide on the travel and tourism industry. The widespread containment and mitigation measures to slow the spread of the virus have severely affected travel and tourism. Although countries are slowly moving toward a phased relaxation of measures, the risk of sudden policy changes around air travel, visas, and quarantine requirements remain elevated, together with long-lasting confidence effects, especially among the older and more affluent travellers. The large economic and social costs of the pandemic will likely result in permanent scarring effects on TDCs—ushering in a post-pandemic “new normal.”’
In terms of specific impact of the pandemic on tourism industry globally, the same Report pointed out ‘According to preliminary data published by the United Nations World Tourism Organization (WTO), strict containment measures imposed to prevent and slow the spread of COVID-19 have already caused a fall of 70 percent in international tourist arrivals in the first eight months of 2020, with an 80 percent drop in August, compared to the same period in 2019. UNWTO (2020) also suggests that a drop in tourist arrivals of 78 percent in 2020 would translate into a loss in visitor spending of $1.2 trillion, placing more than 100 million direct tourism jobs at risk…’
Hence, it is important that countries whose economies are overly dependent on the tourism sector, going forward should look to diversify, so that shocks like the current pandemic do not impact in such a manner. In this regard, the same Report pointed out ‘Countries will need to rethink the tourism model, while creating opportunities for diversification within and beyond the industry, through policy support and structural reforms. No one-size-fits-all solution can rejuvenate the tourism sector in every country. The new normal for international tourism will certainly differ from country to country—and even within a country. … Beyond the initial response designed to mitigate the immediate impact of the pandemic, the focus needs to be on developing long-term policy solutions to heal the scars of COVID-19 and create the new normal for the tourism industry by strengthening healthcare systems, shifting to sustainable tourism models, investing in new technologies, and diversifying within and away from the tourism industry to avoid dependence on a single sector of the economy. … Global cooperation and guidelines on health and safety protocols, and secure platforms that unify a consortium of individuals, governments, and the travel industry in sharing information would provide tourists with good practice guides and information on travel requirements – such as a negative viral test and health insurance coverage.’
