The decline in tourism and its resilience

As well as the loss of human life which, according to World Health Organization data at the end of the weekend – reported on Sunday 29 March – was over 30,000 (with 638,146 confirmed cases and 203 countries and territories affected), economic recovery remains one of the major concerns for future government policies. However, the virus is not just affecting the industrial sector, comprising factories and manufacturing, or the primary sector, involving food production and stocks, partly affected by the lack of seasonal workers to harvest agricultural products in the most developed economies. It is also impacting the services sector as well as the sector which we might refer to as recreation: travel, for example, in a word tourism, one of the most important economic activities on a global level.

According to the World Tourism Organization (UNWTO) – the undisputed authority on the subject – an expected decline of 20-30% in arrivals to tourist destinations could result in a loss of international revenues generated by the sector estimated at between $300 billion and $450 billion, nearly one third of the $1500 billion generated in 2019. An unprecedented deadweight loss: in 2009, following the global economic crisis, the arrival of international tourists fell by 4% and tourism proved to be one of the few sectors to recover faster. As for the Sars epidemic, the decline in 2003 was only 0.4%.

According to the World Travel & Tourism Council – the leading private organisation bringing together more than 200 CEOs and presidents of the world’s leading travel and tourism companies – in 2019, Travel & Tourism grew by 3.5%, outperforming growth of the global economy (2.5%) for the ninth consecutive year. Over the past five years, one in four new jobs was created by the sector, making Travel & Tourism a valuable partner of governments when it comes to employment. The latest annual WTTC research, in collaboration with Oxford Economics, shows that in 2019 the direct, indirect and induced impact of Travel & Tourism represented: more than 10% of global GDP; 330 million jobs (one in 10 jobs worldwide); and $948 billion in capital investment (4.3% of total investment).

If tourism is therefore one of the sectors most affected, with job losses that can be calculated in the scores of millions (about 80% of tourist companies are also made up of small and medium-sized enterprises), the sector may also be one of the main driving forces behind the recovery, as seen in the past. Indeed, the sector has paved the way for job creation and other opportunities for women, young people and rural communities, effectively acquiring the ability to make a major impact on several levels of society. The UNWTO underlines the resilience shown historically by tourism and its ability to recreate new jobs after crisis situations. This time, however, more than ever, international cooperation is needed, with the assurance that the sector – according to the UN body – is also at the heart of the recovery efforts of individual governments.


Sources:
WHO website: www.who.int
UNWTO website: www.unwho.org
WTTC website: www.wttc.org