Chances are you don’t have many summer vacation plans for 2020, and even if you do, they probably won’t look anything like past excursions to far-off lands.
When and where people will be able to travel again—if they feel comfortable doing so—is unclear, but countries that depend on tourism are devising strategies to welcome foreign visitors amidst the coronavirus pandemic. Luring guests may not be easy and providing arrangements that protect both tourists and locals will be a logistical feat.
These efforts come as the trillion-dollar international tourism industry is poised for its worst performance since 1950, according to a United Nations World Tourism Organization report. Tourist trips globally could drop this year 58% to 78% compared with 2019 and destinations could lose up to $1 trillion in tourism income—ending a decade of continuous growth. Figures for the first quarter of the year show that tourism is on track for the organization’s ominous scenarios, with trips down 57% in the month of March alone and a total of $80 billion in income already lost.
Tourism’s Collapse
Destinations will see a drop in tourism arrivals and income after years of growth
Estimates and
scenario-based data
Income
(nominal)
Arrivals
1.5B
$1.5T
1.0
1.0
0.5
0.5
0.0
0.0
2003
SARS
epidemic
2009
Great
Recession
2020 scenarios
Coronavirus
pandemic
2003
2009
2020 scenarios
+$50B
(–1.4%)*
–$88B
(–5.4%)*
–$910B to –$1,170B
(–62% to –79%)
–3M
(–0.4%)
from the
year before
–37M
(–4%)
–850M to –1,140M
(–58% to –78%)
Note: UNWTO’s three scenarios for 2020 model the impact of a possible removal of travel bans and restrictions at national borders in July, September and December. *Percent change in income from the year before is adjusted for inflation, except for 2020. Per UNWTO calculations, a 4.5% drop in nominal values in 2015 translates to a 3.6% growth after adjusting for inflation.
Source: United Nations World Tourism Organization
Epic Tourism Decline
Saint Lucia, where income from inbound international travel represents more than half of gross domestic product, is among the first countries in the Caribbean to announce a plan to reopen. In the first phase, U.S. tourists will be allowed to visit the island-state beginning June 4, and 1,500 hotel rooms are being prepared to comply with a Covid-19 certification process. The abrupt halt of tourism in the Caribbean, where many of the island nations haven’t fully recovered from hurricanes Irma and Maria in 2017, will result in the region’s deepest recession in more than a half-century, the International Monetary Fund estimates.
In the European Union, a ban on all travelers outside the Schengen Zone, which includes 30 European countries, is set to expire June 15. Most member-states are planning to relax lockdown measures and reinstate travel within the block. Still, the GDP of their most tourism-reliant countries—Greece, Portugal, Cyprus, Malta and Croatia—is forecast to plunge between 5.8% and 9.7% in 2020.
Most Vulnerable 👆
Dependency on tourism income varies across economies
- Tourism receipts as a share of GDP
- 0-5%
- 6-15
- 16-30
- 31-50
- More than 50%
Note: Only countries with data for the most recent year available (2018) are shown.
Source: UNWTO
Greece reopened organized beaches earlier this month and will allow direct international flights from 19 countries starting June 15 without a testing or quarantine requirement. In Croatia restrictions regarding business and leisure travel have been relaxed and the border will reopen May 29 for travelers from four countries. And in Cyprus tourists from 19 countries will be allowed to enter starting June 9 on the condition they test negative three days before visiting, as hotels and restaurants are among the businesses that will reopen between June and July.
Other popular destinations in the EU—home to nine of the 20 most-visited countries globally in 2018—want to reopen for tourists, too. Italy—among the countries in Europe hardest-hit by the virus—is lifting an unofficial border closure on June 3 for tourists from the Schengen Zone and scrapping a 14-day quarantine requirement. Spain is considering reopening its border to Schengen passengers in early July, while a two-week isolation for all visitors is due to end in May.
Easing travel restrictions in the U.S. will depend on the health protocols of partner countries and whether or not they will allow Americans to visit, according to Reuters. In China—where foreign airlines are permitted to a limited flight schedule only—another outbreak of the virus prompted the government to reintroduce a lockdown for some 108 million people in the northeast. And in the U.K., a mandatory 14-day quarantine for all arrivals, including returning British holidaymakers, will be implemented from June 8. The move may deal a blow to the U.K. tourism industry as well as to the prospects of some European countries where Britons make up a crucial share of all visitors.
Allowing tourists from nearby countries that have managed to contain the virus is another way to reboot the industry; Australia and New Zealand in the Pacific, Estonia, Latvia and Lithuania in Europe, and China and South Korea in Asia have introduced such so-called ‘travel corridors’.
Globally, the travel and tourism sectors generated 330 million direct and indirect jobs in 2019, according to the World Travel and Tourism Council. However, their recent research suggests the industry is on track to lose more than 100 million jobs because of the pandemic, with 75% of them likely to come from G20 economies. Already 25 million jobs were lost in one month as of late April, WTTC research shows.
Airlines and hotels were the first to experience the economic impact of the pandemic. Scheduled flights globally plunged in April 61% compared with 2019, to 1.6 million, according to figures from OAG. Airlines worldwide are estimated to lose this year $314 billion in passenger revenue this year, a 55% drop compared with 2019, according to the International Air Transport Association, and as of early May airlines in Europe, the U.S. and Asia have secured more than $85 billion in state aid.
Confirmed reservations for April through September declined an average of 37% for each week of March and April compared with a year ago, according to a survey of hotels and resorts from Duetto. In recent earnings announcements, Marriott International and Hilton Worldwide both reported a 90% drop in revenue per available room in April.
Even after travelers feel comfortable booking trips again, the virus’s impact on tourism is likely to last. According to WTTC, the ‘new normal’ in travel will comprise additional standards and protocols in airports and hotels: tests before flying and upon arrival; contact tracing; improved hygiene and cleaning procedures on-board and during stays; and increased use of contactless check-ins and payments.
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