Impact of COVID-19 on International Tourism

By | April 2, 2020

If we consider the ongoing condition, it’s too early to estimate the full impact of the COVID-19 on international tourism. More than 175 countries have already reported cases of COVID- 19. Some have reported a handful of cases while some others have reported tens of thousands. What we don’t know is when will we see the end of this situation but what we know, that tourism would be the hardest hit of all economic sectors.

According to the latest assessment by UNWTO (World Tourism Organization), tourist arrivals could fall by 20%to 30% in 2020 based on the latest developments and this would translate into a loss of 300 to 450 US$ billion in international tourism receipts (exports) – almost one-third of the US$ 1.5 trillion generated globally in the worst-case scenario.

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A public health emergency was declared in the US on 21 January 2020 after it reported the first case of COVID-19 infection. More nCoV cases are coming up in US states. The outbreak has impacted the tourism industry massively as the US embassy issued a ban on traveling to China and also banned the entry of all individuals from China or those who have transited through China 14 days before entry into the US but excluded permanent residents and permanent visa holders. The US receives a large number of Chinese travelers in the form of tourists, who spend millions of dollars in the country. Furthermore, it has equipped airports with enhanced public health services to tackle the disease spread.

Impact on US Tourism

As per the estimates by Tourism Economics, an Oxford Economics Company, the US tourism industry is projected to lose $10.3bn due to travel bans and restrictions. Visitors from mainland China to the US has dropped by 16%. Tourism Economics is expecting a drop of visits by 28% to the US from China which would affect the US hotel industry, as Chinese visitors stay in hotels for an average of 15 nights. It is anticipated that losses will continue through 2024.

Impact on Europe Tourism

With travel likely to slump by a quarter this year, due to ongoing coronavirus crisis on the continent, Europe’s tourism industry is bracing itself for an economic impact. European Commissioner for Internal Markets Thierry Breton announced on 16 March 2020, “Without a steady stream of visitors from outside the bloc, the European tourism industry alone is estimated to foresee the financial loss of 1 billion euro per month. Many small and medium enterprises (SME)s) are at risk of losing their business and millions of jobs are at stake currently. To mitigate the socio-economic impact of the COVID-19 outbreak, the European Commission announced potential measures for tourism such as temporary state aid from national governments. The European Tourism Alliance suggested simplification of visa rules, waiver in traveler’s taxes and economic support to economically hit destinations.

Italy – Italy suffers an economic hit due to a lack of revenue generated from tourism due to the coronavirus outbreak.

Greece– Tourism which accounted for around a fifth of Greece’s economy is expected to suffer from the coronavirus impact hugely.

Spain, Portugal already feeling the impact of coronavirus with more than half of the hotels are closed.

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Impact on Tourism in Asia-Pacific 

Due to the outbreak of COVID-19, the tourism industry across the Asia-Pacific region has suffered greatly. Dramatic tourist arrival decreased in China, Vietnam, and Thailand. Indonesia projected a decline of tourist arrivals by 13.5%.

The outbreak of the coronavirus has disrupted the job market in the tourism sector in India. India which has gone into complete lockdown for 21 days, triggered fears of large-scale unemployment. As per the estimates by the National Sample Survey and Periodic Labor Force Surveys, nearly 136 million jobs are on the line. Tourism and hospitality would be one of the worst-hit sectors, as most of the countries pause travel plans due to the outbreak of COVID -19.

Confederation of Indian Industry estimates that 20 million jobs might be lost if the industry does not rebound by October. As people are practicing social distancing, restaurants already dropped by 35% which has further impacted Flexi workers such as suppliers of vegetables and other raw materials to the hotels, restaurant sanitation workers, waiters.

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