The tourism industry was one of the world’s greatest and fastest growing markets of the 21st century; until it met a tsunami of governments, locking down their countries because of a virus: COVID-19. This move led to significant uncertainty and chaotic conditions in many industries. But the tourism sector has experienced the sharpest falling revenues. Then came 2022. After two years of lockdowns, nearly all governments re-opened their countries. A wave of revenge tourism flooded our planet. Ok! Everything is back to normal now, many may think. This couldn’t be more wrong. The lockdowns did kickstart the greatest recession since the 1920s. And since Food and Shelter comes first, vacation will now have to wait again … for better days.
Before getting to some demoralizing numbers and an even more grim outlook for 2023, let’s start this article with a close relative of COVID-19:
The SARS epidemic in 2003 was also triggered by a form of a coronavirus Made in China. It is epidemiologically comparable. Between end of 2002 and Summer 2003, approx. 8,000 people were infected with SARS, almost two-thirds of them in China and one-fifth in HongKong. Higher numbers of illnesses and deaths were also reported in Taiwan, Singapore, and Canada. Compared to COVID-19, the overall low number of infected people, the effects of SARS on global tourism were limited. However, regional effects were easily noticeable. Tourists avoided South East Asia for quite a while.
Now, the indirect effects of COVID-19 will be significantly higher than with SARS. Governments worldwide have taken drastic measures to control the epidemic. Some countries have been immediately sealed off in Spring 2020, and more and more strict isolation rules have since been implemented with no end in sight. Any form of a gathering of people is avoided. Many public and private institutions, including schools, restaurants, hotels, sports stadiums, convention centers, have been temporarily closed or run on very limited capacities.
Even worse for global tourism: Other than in 2002/2003, China now plays a more significant role in this industry. Before Corona, Chinese tourists did spend the equivalent of 277 billion US Dollars abroad per year. That was 21% of global travel spending according to UNWTO. But current travel restrictions due to the pandemic, did entirely cut off Chinese tourists. Their international mobility ceased to exist.
For some countries like Maldives, Italy and Thailand, tourism used to be a top economic factor. While Italy – missing Chinas tourists – still saw a mild influx of tourists from inside the European Union, Thailand lost both the Europeans and the Chinese. In Thailand, tourism revenue accounted for approx. 11% of the GDP in 2019. By mid December 2020, this is all gone to zero. Tourism was Thailand’s #1 factor to spread wealth. Over the course of 2020, it became the most critical risk factor of the pandemic spreading and was therefore completely abandoned.
This vicious circle becomes particularly evident when we again refer to the SARS epidemic. Starting in southern China, SARS was carried on to Hong Kong and further to Canada, Singapore, Taiwan, and some other countries. After a relatively short time, 8,000 people were infected with SARS in over 30 countries. The WHO issued travel warnings to a variety of Asian and American regions to curb the spread of the disease, but more than 800 people died. The economic consequences of the epidemic were fatal. The SARS epidemic caused sharp falls in the tourism GDP of numerous Asian countries. In China the GDP fell by 25%, in Vietnam by 15%, and in Hong Kong and Singapore by more than 40%. The recovery process for the travel industry in these countries mentioned was complicated and lengthy.
Numbers for 2020
Due to restrictions imposed in March and April, when the coronavirus started spreading rapidly, international travel came to a halt in April and May. International tourist arrivals trailed last year’s total by almost 60 percent through the first five months of 2020. And we only speak about the first five months. Three of them still saw business close to normal. The tourism industry is predicted to close 2020 with an 80% fallout.
Depending on when travel restrictions will be fully lifted, the WTO expects international tourism spending to drop between $910 billion and $1.2 trillion this year, which would set the global tourism industry back by roughly 20 years.
December 12, 2020. Airlines eager to fill their seats, still look at empty planes, emptied by the coronavirus crisis. Tourism remains grounded. Business travel did implode too. Most companies have slashed spending on corporate travel, leaving airlines without another crucial source of revenue. Business traffic remains at least 85% down on pre-crisis levels.