For over six months now, the travel and tourism industry has been struggling to sustain their businesses amid global lockdowns and travel restrictions. For many countries that depended heavily on the economic benefits of travel and tourism, the financial losses have been staggering. Tourism made up nearly 10 percent of the global GDP in 2019, worth nearly $9 trillion. These numbers have plummeted in 2020 with tourism reaching a near standstill in the first half of the year. International tourist arrivals are projected to plunge by 60 to 80 percent in 2020. Tourism spending is not likely to return to pre-crisis levels until 2024, millions of jobs remain at risk.
But as we enter the second half of the year and the world continues to find more efficient ways to handle the pandemic, tourism has slowly begun to rebound. These baby steps may not bring massive gains right away but they are a hopeful beginning for what’s to come. While travellers still remain anxious, many people are setting out on short vacations to break away from the monotony of over six months of isolation in some form or the other.
Countries are reopening and travellers are eager to explore safe tourism
Latest research by GlobalData shows that there has been an uptick in the third quarter of 2020 in earnings transcript sentiment scores. Hotels’ sentimental growth has been influenced by increased occupancy rates and airlines are seeing more passengers enthusiastic about travelling by air.
“There has been a surprisingly early sentiment rebound in the [travel and tourism] sector, which has taken a hit due to the COVID-19 pandemic,” said Rinaldo Pereira, senior business fundamentals analyst for GlobalData. “Companies in this space have been supported by government relief packages, but questions arise on the [travel and tourism] sector’s future stability despite as COVID-19 will likely cause disruptions well into 2021. Travel and tourism companies will need to enhance digital infrastructure further as the use of contactless services become the only option in the new normal.”
As tourism slowly rebounds, many travellers are interested in staycations and travelling domestically. This has encouraged hotels and travel companies to envision a new form of travel that is limited in its scope but is still an important space for revenue generation. Countries are expecting tourism to rebound most significantly in the domestic space. China is hopeful about increased domestic travel over the upcoming Golden Week holiday. After a major slump for months, the country is seeing sold-out flights and travel platforms have reported a surge in hotel bookings.
Saudi Arabia is also looking forward to a quick rebound in tourism. The government is preparing to open its borders to foreign tourists in January and is working to facilitate a smooth resumption of global travel. Tourism Minister Ahmed Al-Khateeb discussed this in an interview saying: “If countries today open their borders, we will be fit to run fast, and this is the plan. We believe people want to travel and they will continue to travel, but we need countries to coordinate their actions.” Several other countries across the world have been opening up their borders to domestic and international travellers. While there have been significant obstacles during the initial reopening of tourism in many countries, things are now slowly falling into place.
This is not to say that the threat of the pandemic has disappeared. The coronavirus pandemic is still a global crisis, one that will take time to completely be eradicated. It is imperative for countries to be stringent in their safety measures when they open up their borders for tourists and make sure there is protocol in place to handle challenges. Being careless during these difficult times will only exacerbate the spread of the virus and further slow down reopening.
Governments must support the tourism industry as it attempts to rebuild itself
It is crucial for governments across the world to step up and assist key stakeholders in the tourism industry. Government-backed equity funds could be used to send out private capital that will help tourism-related SMEs survive. As the demand for tourism returns, it is important for travelers and tourism-sector employees to feel safe. Governments must help implement safety protocols suggested by the international organizations such as the International Air Transport Association (IATA), and the World Travel & Tourism Council (WTTC). These guidelines will help the tourism industry function in a more efficient manner and build confidence among travellers and employees. Communication between governments and travel operators is essential to handling the increasing demand. Government must also take this opportunity to provide data infrastructure and capabilities to the tourism sector, while investigating new and innovative operating models. For example, Singapore made major investments in its data and analytics stack over the past decade through the Singapore Tourism Analytics Network (STAN). This offered tourism players visitor arrival statistics, passenger profiling, spending data, revenue data, and extensive customer-experience surveys. This information will prove invaluable during the pandemic. Other governments must look to emulate similar models of functioning to bolster the tourism industry.
The tourism industry has a long way to go in terms of achieving the kind of success it has seen in past years, however the fact that the demand for tourism has returned is an achievement in itself. A ray of hope has managed to shine through a time when the whole world is grappling with leading a new kind of life.