The Impact of Pandemic Covid-19 on Global Tourism Industry

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The Impact of Pandemic Covid-19 on Global Tourism Industry

The Impact of Pandemic Covid-19 on Global Tourism Industry

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The Impact of Pandemic Covid-19 on Global Tourism Industry

Introduction

Covid-19 is a global pandemic that has had a devastating effect on the tourism industry globally. Tourism is among the industries that has been hit the hardest by the structures that governments and international organizations have imposed thanks to the pandemic (Uğur & Akbıyık, 2020). Consequently, restrictions on travel and movements were imposed affecting both local and international tourism. Despite the recent developments and improvements in recovering normal operations across the globe, the pandemic is still taking a toll on every aspect of life and the global economy. Due to this economic crisis, the world witnessed a significant decrease in incomes of a significant percentage of the population (Uğur & Akbıyık, 2020). Firstly, the incomes of local residents who form the basis of local tourism was affected. Secondly, the tourist business owners experienced economic downturns and will have a hard time restoring their normal enterprise operations. As a result, they may attempt to inflate their prices for foreign tourists. This paper discusses and analyzes the impacts that the pandemic has had on the tourism industry on a global scale and provides some suggestions and recommendations that can help the issues encountered by the industry due to the pandemic.

The Travel and Tourism Industry

Within the past decade, the industry of tourism has seen a continuous growth and was considered to be among the fastest growing sectors globally (Horaira, 2021). The tourism industry witnessed a growth of 59% in global arrival of tourists from 2009 to 2019 that is about 880 million in 2009 to about 1.5 billion in 2019. Globally, the industry contributed about $9 trillion to the world GDP in the year 2019 which equaled to a 10.3% contribution. It should also be noted that one in ten jobs across the globe was in the tourism sector in 2019 which equaled 330 million jobs (Pashkus, Pashkus, & Asadulaev, 2021). But all of this changed when the pandemic hit in 2020 and the growth within the industry was halted. With hotels closed, airplanes on the ground, and the implementation of travel restrictions across the world, the tourism industry became the most affected sector in the world economy. The COVID-19 pandemic cut all the international arrivals in the first and second quarters of 2020. In one year of the pandemic’s outbreak, there was an unprecedented damage to the tourism sector globally (Pashkus, Pashkus, & Asadulaev, 2021). Urgent measures were therefore taken to prevent the rapid spread of the virus like social distancing, territorial blockade, school closures, working from home, among other measures.

According to a study conducted by (Harchandani & Shome, 2021), the damage that the COVID-19 pandemic caused is much higher compared to the previous pandemics. The precise estimate of the total loss cannot be conducted the virus is still spreading. The losses faced by the international tourism is through severe declines of global tourists, revenues, and number of closed destinations and interrupted businesses. The adverse effects of COVID-19 on the global tourism is analyzed through the aspects below:

Impact on Destination Performance

Thanks to the pandemic, travel restrictions were implemented in every destination across the globe. This perspective represented a major challenge on international travel because all the destinations across the world had to limit the number of tourists coming in in order to prevent the spread of the disease (Abbas et al., 2021). To combat the dangers of the virus, many countries prioritized community health and that is why travel was restricted entirely or partly between destinations. Still, the number of confirmed cases of COVID-19 are increasing as well as deaths related to the virus and that is why for a while, many countries chose to totally implement travel restrictions in order to solve this health crisis. Therefore, all tourism activities were suspended in all areas across the globe.

Number of COVID-19 infections in the top-ten tourist destinations across the globe (Source: Tung, 2021)

According to the statistics above, it shows how the pandemic was high and is affecting tourism in almost all the leading international travel markets. There are eight countries in the top-ten tourist destinations in 2019 that are in the list of twenty countries with the highest number of cases (Tung, 2021). In particular, the top-ten tourist destinations had about 61.8 million infections as of May, 2020 which was approximately 35.9% of the COVID-19 cases worldwide (Tung, 2021). Even though the latest statistics indicate that almost all destinations globally have now reduced the restrictions implemented on global tourism, the COVID-19 pandemic is still causing significant damages to the tourism sector not only in the top ten tourism markets, but in all tourism destinations across the globe.

Impact on international tourism revenue tourists

Since the outbreak of the pandemic, the international tourism system has been facing a risk of collapse as a result of a sharp decline in the number of both local and international tourists.

Figure 1: The decline rate of global tourists in sub regions in 2020 (Source: (Kaushal & Srivastava, 2021)

According to the statistics on the figure above, there was a decline in the number of global tourists in every territory and country across the globe (Kaushal & Srivastava, 2021). At the end of 2020, the Asia-Pacific region saw the highest decline with -80% relative to the same time period in the year 2019. Other counties also witnessed a sharp decrease; Middle-East (-75%), Europe (-70%), Americas (-70%), and Africa (-63%). On average, the number of international tourists decreased by approximately -73% relative to the same time period the previous year (Tung, 2021). This percentage is equivalent to over one billion visitors.

Impact on Employment in the Tourism Industry

The tourism industry is regarded as a leading sector in the economy of many countries. The tourism sector generates not only revenue for the economy but it also employs a significant number of people (Tung, 2021). The International Labor Organization provides that international tourism provided over 319 million both directly and indirectly which accounts for approximately 10% of the international workforce. Because the tourism industry was the hardest hit sector amid the pandemic, approximately 144 million employees working in the tourism sector encountered a major reversal on income and some lost their jobs (Tung, 2021). For instance, 45% of the population in Portuguese island of Madeira lost their jobs and 41,500 people lost their jobs in Hungary. In addition, after lockdowns were enacted in the Caribbean region, approximately 300,000 people were rendered jobless in the tourism sector of Jamaica (Altuntas & Gok, 021).

The adverse effects of the pandemic on employment on the tourism sector is evident. Because of the losses suffered by the industry, it may take a number of years or even decades to regain the growth enjoyed between 2009 and 2019 and recapture the opportunities that were missed (Rahman et al. 2021). Due to the territorial blockade policies imposed in destinations, if specific countries fail to put efforts, it would be extremely hard to overcome the problems that the global tourism industry is facing today. This situation is serious and urgent because there are approximately 120 million tourism employees that can lose their jobs due to this pandemic. This is about 35% of the total number of employees in the tourism sector globally (Rahman et al. 2021). This risk is very huge for both the international tourism sector and the host countries’ social issues.

Impact on Tourism Transportation

The global air travel demand had sharply decreased in the year 2020 relative to 2019. The International Air Transport Association (IATA) stated that the data showed an unmatched decrease of about 75% in the number of flights globally as compared to the previous year (Singh, ET AL., 2021). This indicates an adverse impact of the pandemic on the international tourism sector. Generally, aviation is the number one choice of travelling means globally. But even so, cruise-based tourism has seen a rapid growth in recent years (Rahman et al. 2021). Consequently, this form of tourism has led to an increase in revenue due to the increased number of tourists over the years. But after the pandemic hit, the large- yacht travels were suspended to contain the spread of the coronavirus. This form of tourism was nearly stopping its operations because of the risk of the virus spreading across the world. In addition, bus transport companies also saw an unmatched decline in tourism transportation demands. The instant decline in both domestic and international tourism demands was a shocking for local transport companies that focuses on the transportation of tourists locally (Rahman et al. 2021). Some solutions have been proposed in order to recover the global tourism transportation like the coronavirus vaccine passport but the outbreak of the pandemic in some regions tends to slow these plans.

Impact on the Tourism Industry’s Supply Chain

On normal conditions, units in the supply chain of tourism like airline companies, travel firms, excursion points, and accommodation service providers will smoothly liaise with each other to serve visitors and share profits and revenues (Pham et al., 2021). But after the strong drop in the number of both domestic and foreign tourists, a good financial flow is affected. Moreover, informal businesses within the industry were also affected due to the pandemic. The supply chain units have tried to keep deposit money and prioritized settling their issues. Evidently, the pandemic has led to cracks and disruptions in the global tourism system’s supply chain. Most facilities like hotels, restaurants, entertainment spots, and local tourism destinations are either closed because of sharply reduced wattage or blockade policies (Pham et al., 2021). These situations have resulted in disruptions of the industry’s supply chain and recovering from these disruptions can take a lot of time. If the pandemic prolongs and the decline of international visitors continues over the years, the tourism supply chain units will continue to face issues such as bankruptcies and can also be broken seriously.

Suggestions and Recommendations

The pandemic’s outbreak has obviously led to countries taking unprecedented solutions and has caused tremendous damages to the tourism industry globally. This serious crisis has not ended and the rate of recovery cannot be predicted (Tung, 2021). Even though the coronavirus vaccine campaigns continue to be performed across many countries worldwide, the COVID-19 outbreak is still a very serious issue. This therefore means that international tourism needs not only effective solutions but also huge cooperation from every country globally (Pashkus, Pashkus, & Asadulaev, 2021). Thus, it is necessary that the tourism industry develops effective strategies to develop and reinforce their brand and the countries’ territories in order to influence the attractiveness of the cities for the tourists despite the pandemic. Furthermore, it is necessary to take multiple state regulation’s measures and the industry’s support to avoid overpricing and unreasonable requirements for international tourists. These measures will help avoid subsequent crises in the global tourism industry possibly transform the trends of global tourism in favor of their territories.

Conclusion

The pandemic has had serious effects on the global tourism sector and has caused multiple social and economic losses. Measures put in place to combat this pandemic like closure of national borders, lockdown of economies, mandatory testing especially for travelers, and quarantine has changed the industry’s functioning significantly (Pashkus, Pashkus, & Asadulaev, 2021). The recurrent nature of the pandemic’s wave every now and then has forced the international authorities to continuously modify the regulations that concern sanitary restrictions and security measures which aggravates further the adverse effects of the pandemic on the industry of tourism. As demonstrated in the discussion above, every form of tourism activity has been harmed thanks to the pandemic. Although local tourism has not been affected as much as the international tourism, it has also suffered losses. But from previous experiences with other pandemics, there is hope that international tourism will eventually overcome this difficult situation successfully and a growth period will start (Bouarar, Mouloudj, & Mouloudj, 2020). Furthermore, the crisis brought by the pandemic can be regarded as an opportunity for the restructure of international tourism with regards to the new growth period. Experts have introduced policy implications to help in the process of recovery within the industry. The roll out of the corona virus vaccine also boosts hopes for the industry’s recovery despite the constant challenges experienced. In most regions, the global tourism industry is expected to survive and local tourism in many countries across the world has resumed operations and business and jobs have been restored in some destinations.

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