The travel industry is one of the largest in the world in terms of monetary value with reports on the loss caused by the virus already reaching several billion USD. No one would have predicted that the COVID-19 virus would bring this booming industry to its knees in 2020, the loss is not only reflected in monetary value but also a drastic loss of jobs some of which may never be gotten back. The world has been hit by this pandemic at a time when it was ill-prepared to tackle this virus efficiently and because of its more of transmission over a million people all over the world have been infected with the death toll exceeding tens of thousands. This is an assessment of the impact of the Coronavirus (COVID-19) on international travel and tourism and it is important to note that the realities of this pandemic are evolving at a pace where projections and data analysis may not truly reflect future situations.
Implications of COVID-19 for the Travel Industry Worldwide
The unique nature of the transmission of the COVID-19 virus has made countries come up with travel restrictions and lockdowns. The economic implications of this for the travel industry is massive with records showing that international travel is at an all-time low, with the imminent global recession experts and economists all over the world warn of the severe impact it would have on various sectors. They all claim the travel sector should brace itself as foreign tourism around the globe is coming to a halt with most countries banning international flights.
Records from Statista show that countries known for tourism from all over the world such as Italy, Spain and France are expected to register a significant decline of tourists due to concerns about the spread of the deadly virus and this has greatly affected those countries as a portion of their GDP is generated from tourism to those countries annually, it goes without saying that airline operators who convey these tourists to and from their chosen destinations will be greatly affected. Some operators, like Air France-KLM Group (AFRAF), Air Canada (TSE: AC), Delta Airlines (NYSE: DAL), put measures in place like the 41-51% reduction of available seats on air crafts but even with measures like this,there continues to be a great reduction in the number of international travellers. The international passenger capacity fell to 33% by March and fell even further to 83% by April, travel sectors in European and Asian/Pacific region are those expected to be hit hard by this pandemic followed by travel sectors in North America and the Middle East.
The currency exchange market is one that has been integrated with the international travel and tourism ecosystem, at the start of the spread into Europe and the Americas there was a large fall in stock market prices with lots of companies seeing a great decline in stock holdings. The losses recorded translates to a decline in revenue generated from the business that deals in catering to the needs of the teeming travelers from all over the globe. This leads to a ripple effect that has seen disposable income of the general public drop from previous heights in 2019. If we use modest projections business is looking bleak as things may not return to the way they were and the pandemic may not end anytime soon leading some experts to predict that the travel sector of most countries will still feel the effects of this global pandemic long after the crisis has been resolved. They call for intervention from the government and other financial agencies to lend support and create policies that help reduce the effects of the coming storm.
This global pandemic has frightening implications can we factor the use of the revenue gotten from the travel sector and how it affects other sectors. There has been a dramatic reduction in consumers’ expenditure for travel due to containment measures i.e expenditures on clothing, art and recreation, hotels, restaurants, and household equipment has been significantly low due to low tourist travel. Airline operators and airports may lose over $76 billion for the full year while international tourism may be seeing a $300-450 billion loss (UNWTO). The impact of COVID-19 virus did not just affect passenger planes it also caused a 19% reduction in air cargo throughput, there has been a 9% reduction in freighter cargo from March 2019.
Fighting COVID-19
International health bodies all over the globe have come together to try and contain the virus with large amounts of revenue being poured into the procurement of medical equipment to aid the battle against this virus,with quarantine and lockdown measures still in place to slow the spread of the virus, most countries are intensifying efforts to manufacture a viable vaccine that would put an end to the crisis we are currently facing so that we may focus on building the travel sector to the height it once was.