Global tourism will suffer $2.1 trillion in losses due to the Covid-19 pandemic.

The Covid-19 pandemic brought travel and many service industries globally to a near standstill, causing significant losses in jobs and revenue for the entire economy, including the tourism industry.

Up until the beginning of April, the tourism industry in general, and the aviation industry in particular, has been facing a risky future due to the Covid-19 pandemic. On April 2nd, National Geographic published a detailed analysis of the impact of the Covid-19 pandemic on the global tourism industry by journalist and travel author Elizabeth Becker.

A major shock to the global economy.

The economy has historically faced many difficult times and major crises, but the achievements and remarkable development of the 4.0 era with technological advancements have helped bring people closer together in a flat world. Therefore, travel has become easier and more popular than ever before, with very affordable prices and convenient transportation. Experts estimate that the technological revolution has contributed to approximately 1 billion tourist trips per year.

But this powerful growth momentum was brought to a standstill by the Covid-19 pandemic without any warning, and it has left people around the world "standing still".

Accurately calculating the damage to the tourism industry is extremely difficult because the data is constantly changing as Covid-19 spreads. However, the World Tourism Council (WTTC) warns that if the pandemic continues for another few months, the global tourism industry could lose up to 75 million jobs and approximately $2.1 trillion in revenue.

WTTC CEO Gloria Guevara is urging governments to take measures to support the tourism industry, emphasizing that the losses are truly alarming as they severely impact millions of families worldwide.

Looking back, the global tourism industry has largely seemed to have built its financial strategies with a "trouble-free" future vision, thanks to open borders, high demand for tourism, and its position as an $8 trillion industry that consistently thrives regardless of market fluctuations. There was absolutely no contingency plan for the large-scale "freezing" we are experiencing now.

The US tourism industry is believed to be among the hardest hit, with an estimated 4.6 million jobs lost as of May, and this number could rise further if tensions persist. The number of unemployment benefit claims in the US has also been increasing weekly, reaching 6.6 million – double in just one week and the largest surge in 50 years to date.

“The impact of Covid-19 on tourism is six or seven times greater than the impact after the terrorist attacks of September 11, 2001,” stated Roger Dow, President and CEO of the U.S. Travel Association. The association is planning to boost both international and domestic tourism. Statistics show that this industry generates approximately $2.6 trillion in economic output and supports 15.8 million jobs in the U.S. annually.

Faced with the risk of such a budget deficit, the US Congress passed a $2 trillion stimulus package in the hope of rescuing the market. The focus of this stimulus package is to help the unemployed, while also supporting businesses large and small. But the question remains: Is this support package sufficient in the current recession, and what does it mean for tourists?

Initial recovery

Nevertheless, there are signs of a potential early recovery for the tourism industry in China, now that the pandemic is completely under control and travel restrictions are being lifted.

In the first week of March alone, hotel bookings in China surged by 40%, and peak daily flights increased by 230% compared to the previous month, despite some remaining travel restrictions. According to several surveys, the Chinese tourism industry plans to recover to 70% in the next six months, but primarily through domestic tourism, as China continues to strictly restrict foreign visitors to prevent a resurgence of the pandemic.

Earlier on March 30, Wolf Street reported on an updated assessment by the World Tourism Organization (UNWTO) regarding the impact of Covid-19, based on an optimistic view that global tourism would recover quickly in the next 3-4 months, despite suffering significant losses due to the Covid-19 pandemic.

My Tong