It’s no secret that the current global pandemic is wreaking havoc on the tourism industry worldwide. Most of the world’s developed nations are under some version or stage of lockdown. Being heavily dependent on tourism and the associated revenue is proving costly to several industries and holiday destinations.
While the necessity and impact of these shutdowns will be analyzed for years, right now the damage is very real. The $8 trillion tourism industry accounts for 10% of global GDP, and is set to shrink by 25% or more, losing up to 50 million jobs according to early estimates from the World Travel and Trade Council.
Unlike an economic shock which depresses travel for purely financial reasons, governments are now actively restricting or banning travel. And even if vacation travel was completely allowed most people have been sufficiently scared to avoid even the thought of traveling or being in the presence of large groups of people. This reluctance to travel may take months, and even years to dissipate.
Some travel will make a reasonable comeback, especially in the summer months. Domestic tourism, often by car or camper, and especially to quieter, natural destinations will be seen as an acceptable and low-risk way to travel. Several iconic holiday destinations however are set to continue to endure long term, even devastating drops in traffic. And with the prospect of a quick vaccine or treatment highly unlikely, these spots may take a long time to rebound.
The current collapse of the cruise industry is perhaps the most widely discussed travel industry story. The industry was actually booming with billions of dollars in new ships on order, anticipating that an ageing, wealthy population would drive sales for decades to come. That came crashing down in just a few weeks as infected cruise ships were turned away at their regular ports and forced to stay moored at sea while the coronavirus spread through the crew and guests, creating a PR nightmare.
Most cruise lines immediately cancelled all sailings, as bookings plummeted and cancellations grew. Unlike airlines, the cruise industry mainly operates outside of national jurisdictions to avoid taxes, and as such are ineligible for any government COVID bailout funds. Some big cruise lines may even go out of business. While some bargain hunters may look to these distressed floating resorts for travel deals, their regular clientele will be staying away for years and some may never return.
Las Vegas is unique in the United States for being a major city that is almost entirely dependent on tourism. As a result of coronavirus, conventions have been cancelled indefinitely and the Nevada Governor ordered all casinos closed for weeks until it is safe to reopen. Casinos are a big part of the Vegas culture but the lion’s share of revenue actually comes from hotel bookings, food and beverage and a wide range of shows and events.
It may be a long time before crowds are keen to spend hours indoors at shows, casinos, restaurants and conventions with thousands of other tourists from around the world (once foreign tourists are even allowed back into the US). For now, prospective Vegas tourists are staying at home and attending their conferences on Zoom, ordering in from restaurants, getting their entertainment from Netflix, and if they need a gambling fix they’ll search for the best Canadian casino online and play from home.
When they finally realized the severity of the new virus, China managed to enforce a highly effective lockdown to contain the spread of the virus, particularly at the source of the outbreak in the city of Wuhan. Cases and fatalities have since dropped to virtually nothing considering the size of the country. Despite this success, the media coverage of China as the source of the disease, and a growing animosity between China and several Western countries, notably Trump’s America, is having a chilling effect on travel to China, both for business and leisure.
Foreign visits to China, which had been growing for years, have collapsed and will stay low for the foreseeable future. The silver lining for China is the fact that Chinese tourists themselves, some of the biggest spenders on travel in the world, are feeling less welcome in the rest of the world and will be inclined to support domestic holiday destinations.
Australia and New Zealand
Most countries that chose to tackle the coronavirus pandemic implemented lockdowns, social distancing and other measures to try to reduce the disease to manageable levels to allow their health care systems to avoid getting overloaded. A few countries, notably New Zealand and Australia, believed they could, eradicate the disease completely, and to a large degree, for the short term anyways, they have managed just that.
Being a single country island makes it much easier to lock down your country from foreigners arriving sick and reinfecting local populations. To do this effectively there are very stringent screening and quarantine measures for visitors that will likely stay in place for a long time, as coronavirus appears set to stick around for a very long time. Even if tourists are willing to risk long, uncomfortable flights, the thought of overly strict screening and and lengthy quarantines may make other holiday destinations look preferable.
Festival Towns – Coachella, Glastonbury, Pamplona
There are countless towns and even cities that rely heavily on a single event or series of events to drive tourism and local revenue. For the 2020 season at least, nearly all of these music, theatre, film, art or tech festivals have been cancelled. World famous music festivals such as Coachella in the US and Glastonbury in the UK are on hold, and it’s still up in the air whether they’ll be back next year and, if they are, whether people will be keen to gather in tight, sweaty masses using common amenities for hours or days. For the festivals that target mostly young people, who are far less impacted or harmed by COVID-19, there may be an early return but media and government pressure may crush that hope.
Europe has, to many people’s surprise, been the hardest hit region in the world, particularly its biggest cities. Planned travel went down by 80–90% to most of these cities and is proving slow to recover. High population densities, lots of foreign visitors and crowded streets, plazas, markets and public transport are all factors leading to dramatic infection rates. Despite significant drops in numbers there will be a lingering reticence to visit the worse hit cities.
Lockdowns have been more aggressive in many of the European capital cities like Madrid, Paris, London, Berlin and Brussels than in small towns and rural areas. These cities will likely remain riskier places to visit for many months to come as cases ebb and flow. With many monuments, attractions, events, parks and even hotels shut down tourism will likely be under-performing for a long time.
Looking on the bright side
There has been a whole lot of data from the beginning of the outbreak that suggests for healthy people, even regardless of age, COVID-19 has a very low chance of causing a serious or life-threatening illness. This is even dramatically more true for healthy younger people, under 40 for example. And social distancing, meticulous hygiene and common sense have significantly reduced chances of getting it in the first place.
It may not be for everyone but the months to come may be very special opportunities to experience the world in a way you may never be able to again. First, look for one-in-a-lifetime bargains as airlines, hotels, cruise ships, car rental companies remain starved for paying customers. Second, you will be able to visit places that normally are suffering from over-tourism, and enjoy them without the crowds. Oh, and the pandemic has also reduced traffic, and pollution. If you can, it may be the perfect time to see the world!
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