With countries all over the world closing their borders in short succession, the COVID-19 pandemic triggered a collapse in the international travel industry, the likes of which had never been seen before. According to World Tourism Organization data, international arrivals tumbled by 73% globally in 2020, with 1 billion fewer vacationers travelling compared to 2019.
Prior to the pandemic, travel and tourism were among the most important income-generating sectors in the global economy, accounting for over 320 million jobs worldwide and 10% of global GDP. As COVID-19 spread, massive revenue losses had a devastating impact on tourism-dependent economies, jeopardizing between 100 and 120 million jobs in the sector globally.
Throughout 2021, this “travel shock” continued, with restrictions in international travel continuing to keep tourists away. Between January and May 2021, tourist arrivals were down by a further 65% compared with the same period in 2020. In early 2022, there’s still substantial uncertainty about the tourism industry’s recovery worldwide, thanks to the rapid spread of the Omicron variant.
Many smaller countries’ economies are heavily dependent on tourism.
Countries that rely heavily on international tourism tend to be smaller nations, with a GDP in the middle to high-income range. Many are small island economies, such as St. Lucia and Jamaica in the Caribbean, and Samoa and Fiji in the Pacific. Prior to the arrival of Covid-19, revenue from international tourism accounted for around one-quarter of these islands’ GDP, peaking at 50% of GDP in popular vacation destinations like the Maldives and Aruba.
In addition, several larger economies are heavily reliant on international tourism. In Thailand and the Dominican Republic, tourism accounts for 8% of the GDP. In Croatia, tourism revenues accounted for more than 15% of the nation’s GDP between 2015 and 2019.
Experts warn that these and other economies that rely heavily on tourism are likely to feel the impact of the pandemic for some time.
Irwin LaRocque is the Secretary General of the Caribbean Community. His predictions for economic recovery are somewhat pessimistic: he pointed out at a virtual event that he and the rest of the community could not find a way out of the tourism slump they had fallen into, at least not yet.
Countries the world over are scrambling to lure visitors back while simultaneously trying to avoid new outbreaks. Still, many industry experts share LaRocque’s outlook: they predict that global tourism receipts are unlikely to recover to anywhere near 2019 levels until 2023.
Tourism can fight poverty.
All over the world, the pandemic has crystallized the importance of tourism in fighting poverty.
In sub-Saharan Africa, the development of regional tourism has been a key driver in closing the gap between rich and poor, with tourism-reliant countries increasing their per capita GDP by around 2.4% between 1990 and 2019. This represents a significant increase in growth compared with non-tourism-dependent nations, according to data from the International Monetary Fund.
Despite the economic impact, there may be an opportunity to “build back better.”
Nevertheless, while the pandemic had devastating economic consequences for tourism and the countries that depend on it, many cite the crisis as a prime opportunity to retool the entire industry. It’s clear that there’s a real need for governments and private companies to rethink how tourism impacts local communities, natural resources, and ecosystems. For example, some industry experts contend that the slowdown provides an important opportunity to advance the transition to a carbon-neutral, more sustainable model of tourism.
In a report published in August 2020, the United Nations World Tourism Organization (UNWTO) highlighted the role played by tourism in advancing Sustainable Development Goals, emphasizing the sector’s relationship with cultural and environmental goals.
The UNWTO report also pointed to the need to reimagine global tourism to promote sustainability and ensure that the economic benefits of tourism are distributed fairly. To that end, the document included a roadmap to help governments rebuild their tourism industries, while placing people and environments at the center.
The recommendations encompassed five priority areas:
- Managing and mitigating the crisis: Governments and the private sector need to implement coordinated solutions to protect livelihoods and jobs; instill confidence through safety in all tourism operations; and promote inclusive socio-economic recovery.
- Boosting resilience and competitiveness: Governments must support the development of tourism and travel infrastructure and cultivate a supportive business environment for micro, small, and medium enterprises (MSMEs) operating at the local scale. Domestic and regional tourism should also be promoted.
- Digitizing the tourism ecosystem: Government-funded recovery packages can include provisions to maximize the use of technology in the tourism industry, encourage people to create new technology solutions, and promote digital skills training in the tourism workforce.
- Fostering sustainability: The tourism industry must take steps to become carbon-neutral in order to align with the Paris Agreement on Climate Change. Government investments in the tourism industry should foster sustainability—for example, through the creation of new protected areas, investments in green energy, and by requiring companies to give up unsustainable practices if they accept government financial aid.
- Forming partnerships: To achieve the Sustainable Development Goals, cooperation will be a must. Recovery plans should include governments, development partners, and international finance institutions working together.
David Geithner 