Travel and Tourism in Covid: The Turbulent Road To Recovery

Travel and tourism, an industry that, before Covid-19, accounted for 10% of global GDP and over 320 million jobs worldwide, was hit hard by the pandemic over the past few years, sending reverberations throughout the job market, travel industry, and, ultimately, the global economy. The International Air Travel and Tourism Council has found that the revenues of firms in the airline industry have plunged by about 60% in comparison to those in pre-pandemic 2019. Looking ahead, the future does not seem too promising; in fact, IATTC has estimated that if the pandemic continues for several more months, it could result in a potential global loss of 75 million jobs and $2.1 trillion in revenue. Unfortunately, it seems that some of the most popular tourist destinations, a group that relies most heavily on the tourism industry, have also been those that have suffered the worst since the onset of the pandemic. For example, in March 2020, travel and tourism made up roughly 20% of Thailand’s GDP. However, with losses in excess of $37 million, Thailand has witnessed firsthand the pandemic’s negative effect on the tourism industry. The only three countries that experienced greater drops in the revenue made from the tourism industry have been the United States, Spain, and France.

According to the Economics Observatory, tourism restrictions, commercial flights, hotel occupancy, and jobs are all factors to consider when assessing the pandemic’s impact on the travel sector. When it comes to tourism restrictions, since March 2020, a total of 217 countries have imposed some form of travel restrictions. Although many governments have recently reversed their efforts to ease restrictions on travel, one in three destinations worldwide still remain completely closed to international tourism, with restrictive travel regulations prevailing in most parts of Asia and the Pacific, and Europe. 

A direct impact of travel restrictions is the levels at which commercial flights are being used. Specifically, By the end of 2020, commercial flights were down 41.7% compared with 2019, having plunged by 74% back in April 2020. And although flight traffic has continued to follow seasonal trends, commercial flights have remained well below 2019 levels for the past year according to FlightRadar24. Along with commercial flights, hotels have been hit hard by these drastic reductions in travel as the proportion of people staying in hotels fell dramatically across all regions in March and April 2020. Interestingly enough, Europe’s hotel occupancy rate is the lowest on a rolling seven-day average, with only 14% of available rooms occupied. The Middle East currently has the highest occupancy level (58.9%), followed by China (49.8%) and the United States (40.1%).

According to the World Travel and Tourism Council, one in four of the world’s new jobs over the past five years were generated by the tourism industry. Globally, the total jobs lost during the pandemic amount to 142.6 million in 2020 alone, down approximately 40% compared with the previous year. The European Commission’s Joint Research Centre (2020) confirmed that between 6.6 and 11.7 million tourism-related jobs were at risk of a reduction in working hours or lay-offs in 2020, representing ‘between 3.2% and 5.6% of the total active population in the European Union’. Because of its interconnectedness with the broader economy, the tourism sector risks being among one of the last to recover, with consequences going beyond the industry itself.

Fortunately, even after a year of steep losses, the tourism sector is now showing signs of recovery—even as the Covid-19 omicron variant’s development has prompted several nations to restrict their borders once again. As nationwide lockdowns eased and countries pulled back border restrictions, increased vaccination rates, pent-up demand, and stockpiled money helped boost global tourist demand through 2021. Travel recovery has remained uneven across regions, according to an analysis by travel news and research firm Skift. “What we have found is that there is a very strong correlation between the number of new Covid cases and travel’s recovery,” said Wouter Geerts, senior research analyst at Skift.

North American countries such as the U.S. and Mexico have remained “more open” and that helped their tourism industries, said the analyst. In contrast, “zero Covid” strategies across Asia have suppressed travel until recently, Geerts said, referring to the approach where countries impose mass lockdowns, extensive testing and strict restrictions even if only a few cases are detected.

Airlines reported net losses in 2020, and that trend is expected to continue into this year, according to estimates by the International Air Transport Association. But those losses will likely shrink this year, the aviation trade association said in a report released in October. Global revenue passenger kilometers (RPK) are expected to increase this year, but only to around 40% of pre-Covid levels, said IATA. Fitch Ratings lowered its global RPK forecasts for 2021 and 2022, citing a slower than expected rebound in international traffic and constrained business travel. The agency warned that operating conditions for airlines will remain volatile with the emergence of omicron.

However, some suggest that to truly reach pre-Covid levels of travel and tourism in today’s climate much more will have to be accomplished on the global scale when it comes to a unified vaccination plan. We know vaccines can significantly reduce the likelihood of infection and transmission, and it is a testament to global science that we have developed vaccines and administered about 5 billion doses so quickly. Nevertheless, Blair, Bell, and Agus from the New York Times claim that without recognition of these vaccines across borders and the ability of people to prove their vaccinated status, this progress will not result in easier travel and therefore an increase in profits for the travel industry.

A seamless, worldwide, data-driven system might potentially do this by recognizing immunizations for travel, tracking their changing efficacy, and certifying a person’s vaccination and possible booster status. The information indicating one’s vaccination status (i.e a QR code, or Vaccination Card) should be something accessible and transferable around the world and some theorize that the Group of 20 can become the gatekeepers of these standards to assure they work globally while protecting people’s privacy.

An overreliance on domestically approved vaccines would leave the world grounded. Of the vaccines recognized by the W.H.O. as effective, just four are approved in Britain and the European Union and three are conditionally or fully approved in the United States. There needs to be more of a unilateral agreement to not only clear up confusion but to help put forth clearer legislation to assist airline and travel industries during these upcoming months. Establishing a consistent and workable travel policy is essential for a safe and expeditious global economic recovery.

Establishing and executing a more clear and coherent plan is what we need in order to push the travel industry a little further in the right direction to jumpstart this much-needed growth. Once this plan is in place, the modest recovery that we are currently witnessing may accelerate and maintain its momentum well throughout the difficult period of these new emerging Covid-19 variants. Although it is awful to see these impacts play out in nations and on employment, there is still hope for the future; nevertheless, we can only get this massive task done with a unilateral approach and international collaboration to get this industry back on its feet.

_{Written by Jodany Fanord}

^{Edited by Alyssa Fan and Natalie Martin}