How COVID-19 Will Impact the Travel Industry
As a result of COVID-19 hitting the whole world hard, many countries have imposed travel bans, quarantines, and other restrictions for their citizens. With over one million people infected and more than 50,000 dead across the globe, other countries have even ordered for global travel restrictions to foreign countries or barred their citizens from traveling abroad. The travel restrictions come along with decreased morale to travel, which have had a significant social and economic impact on the travel industry across the world. According to the United Nations World Tourism Organizations, the global tourist arrivals might drop by approximately 20 to 30 percent in 2020, which will result in a potential loss of up to 50 million.
The travel and tourism industry has a significant economic impact, accounting for about 10% of world GDP. The sector is an excellent source of income for many people. But as the coronavirus reaches everywhere, it’s likely that to have a massive economic toll. The Travel and Tourism Council has estimated that the pandemic could lead to a loss of more than 50 million jobs globally in the travel and tourism sector. While the middle and low-income countries are will be hit hard, Asia is feared to be the worst affected continent. With over 50 million jobs put at risk globally, the impact of the pandemic would depend on how it sticks around. However, as Asia is expected to be at the receiving end, more restrictions like that of the United States administration that bans travel to Europe may make things worse for the travel industry.
Things are even said to become worse if the current conditions prolong. At the moment, what is clear is how hard the airlines, tourism destinations, cruise lines, and hotels have been affected by COVID-19. For obvious reasons, it will take some time for businesses to get back to normal. However, according to the Lufthansa Innovation Hub newsletter, China resumed to air-traveling in six weeks after the Wuhan lockdown. This is after the Lufthansa Innovation Hub conducted data analysis on various travel categories, including online search and reservations, air travel, accommodations, tours, and other travel activities. As social distancing remains the critical measure to curb the spread of the virus, many people may adjust to a new way of doing things. In fact, many visitors may not book into large resorts or condominiums but instead will prefer private villas, houses, and cabins where they will feel safe.
Furthermore, even if the restrictions are lifted in other sectors, it’s a possibility that international flights may be under scrutiny, a factor that will cripple the travel industry further. Consequently, the impact COVID-19 on airlines is massive. Based on an expected global recession and travel restrictions, International Air Transport Association (IATA) warns that there may be an international air travel revenue fall up to $252 billion, which could account for 44% below the 2019 figures. On the other hand, the hotel sector is feeling the same heat. However, not all hotels have been affected by an equal measure. Larger hotels that hold many visitors and conventions are the most affected. Similarly, hotels and resorts in big cities and towns have also been hit in the same way, while those in small towns and private places being the least affected.
The cruise business has also experienced a swift. Cruise companies face a fierce battle to get off the ground. Cruises have become a target as they are said to be having infected passengers on board. For that matter, the Center for Disease Control and State Department issued a warning to the Americans not to use cruises for they were at high risk for spreading the virus. So far, according to some reports, cruise companies have lost up to $750million in terms of revenue amid of coronavirus. Similarly, some popular cruise companies have also dropped by 60 – 70 percent. There will likely be more restrictions on sailing, which will amount to more losses.