Tourism on its knees
Countries around the globe are slowly removing restrictions and reopening its economies. But the damage has been done already.
Governemt restrictions in most countries, targetet to reduce the spread of coronavirus have kept millions of people at their homes and therefore stopped almost everything, including tourism.
Quarrantine measures affected everyone, from small businesses to large corporations.
World’s largest touroperator TUI, announced on Wednesday that most likely they will reduce their personnell by 8.000, and even the largest airlines like Lufthansa, have seeked for government financial assistance to survive.
More than 100 million jobs in jeopardy
According to World Travel & Tourism Council (WTCC), travel and tourism industry contribute by 10% to the world’s average GDP, and 1 out of 10 jobs in the world are in tourism. One third of all jobs, or to be more precise 100 million jobs related with tourism and 2,7 trillion dollars in overall GDP might be affected due to current crisis.
Countries whose economies depend mostly on tourism (like Croatia) will suffer the heaviest impact of the current crisis. While the predicted 25% loss of income might completely destroy GDP among small countries like Maldives and Seychelles, Croatian economy might survive if the situation doesn’t get worse in the Fall.
Regarding the fact that Europe holds half of the world’s tourist arrivals, the European travel market is estimated to be losing 1 billion of Euros each month, which is a terrifying impact for 27 million employees in European’s travel and tourism industry.
“the crisis in tourism is much deeper than we could have tought two months ago”, said Isabel Oliver, Spain’s State Sercretary for tourism.
Although everyone involved with tourism desperately needs international travellers who would eventually bring some kind of economic relief, reopening of the borders brings the risk of spreading another round of coronavirus.
How will tourism restart look like?
Regardless of its significance for world’s economy, the restart of tourism wil be especially complicated and slow. The return of travel first requires reduction of current health restrictions on the borders, international cooperation and most importantly – tourists.
It is still unknown how many people will travel this year, considering the fact that many lost their jobs, or have already used their vacation days during quarrantine.
European Comission announced this Wednesday a package of guidelines with a goal to help EU countries restarting tourism, but also confessed that travelling will not go without risk while virus is still in circulation.
Some proposals are to remove restrictions between countries in which the epidemic situation is under control, using the tracking system applications and applying new voucher systems to protect travel agecies to multiple cancellations.
John Holland-Kaye, director of London’s Heathrow told CNN that “the critical issue is to build trust between countries that is safe to reopen borders without the risk of a new infection and build the confidence of the general public that is safe to fly”
Airports obviously hold the key, but airlines are already downsizing their businesses, reducing their fleets and cutting thousands of jobs, expecting that people will fly less than before.
British Airways announced last week that it does not expect a return to 2019 figures before 2023. Princess Cruises, a subsidiary of Carnival Corporation, has cancelled almost all of its summer voyages, explaining their decision with limited flight offerings and the closure o many atractive ports. It’s competitor Norwegian had to raise more than $2 billion in capital markets in order to survive. Airports and hotels are trying to attract guests with health check-ups and improved cleaning protovcols, creating new costs at a time when the sector’s finances are already shaken by travel collapse
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