International Tourism May Not Recover Until 2022

Tourism in Southeast Asia has been hit particularly hard by the COVID-19 pandemic with international arrivals down by 74% in the first 8 months of the year. The figures for May to August were even worse for the region where there were declines of 98%.

That is according to a press release issued by the World Tourism Organization (UNWTO) on 27th October.

The World Tourism Organization is a United Nations Specialized Agency.

The fall compares to the worldwide drop of 70% and is attributed to the area to be the first to be impacted by COVID. UNWTO expects the global fall in International Arrivals for the whole of 2020 to also be at 70%.

Globally the figures demonstrate 700 million fewer international arrivals compared to the same period in 2019 and equates to a loss of US$730 billion (approx £565 billion) of income. UNWTO state that this is 8 times the loss experienced following the global 2009 economic and financial crisis.

UNWTO Secretary-General Zurab Pololikashvili warned that “This unprecedented decline is having dramatic social and economic consequences, and puts millions of jobs and businesses at risk.. This underlines the urgent need to safely restart tourism, in a timely and coordinated manner”.

Recovery

UNWTO has a panel of experts who have examined international tourism and its recovery from the pandemic.

The majority of the panel predicted a rebound in international tourism by the 3rd quarter or 2021. However around 20% of the panel felt that recovery would not be seen until 2022.

Travel restrictions, many of which are changing at short or even no notice, are seen as the main barrier to recovery alongside the continuing prevalence of COVID throughout the world and low consumer confidence.

The lack of an international coordinated response to ensure protocols and restrictions were consistent as also been linked as an important obstacle for recovery alongside a deteriorating economic environment.

CNN Business reported on 27th October that it is likely that airlines financial difficulties may take years to recover from the effects of the pandemic. They reported that Philip Baggaley, Chief Credit Analyst for Airlines at Standard & Poors had stated that it took five years for airlines to recover passenger traffic following the recession in 2009.

There is also much debate on whether business travel will recover. Many companies have discovered that much of their business can be conducted online and they can make large savings by not sending executives on expensive business trips. There will always be times when face-to-face meetings are required but these are likely to be lower in number than pre-pandemic.

Many airlines depend on business travellers to make flights financially viable. Any significant reduction in business travel is likely to result in increased prices for leisure travellers. Airlines may need to look at other areas to increase premium travel including an expansion of premium economy seats and cabins on long-haul flights to increase economy revenue.

The International Air Transport Association (IATA) Director General Alexandre de Juniac said in a statement that “there is little indication the first half of 2021 will be significantly better [for air traffic], so long as borders remain closed and/or arrival quarantines remain in place.”

He continued by saying “Even if we maximize our cost cutting, we still won’t have a financially sustainable industry in 2021.” He has warned that as many as 1.3 million jobs were at risk in the aviation industry, with millions more affected in associated industries.

Demand

Hotel occupancy rates for Southeast Asia are currently at 36% of capacity, up from the lowest levels in April at 24%. Much of this increase is down to domestic tourism as local restrictions are lifted rather than a return of foreign tourists.

More worrying for a future recovery is the lack of future bookings and hotel searches indicating that people are either not yet ready to travel or do not have the confidence that they will be able to.

Hotel bookings in the region are down 62% compared to 2019 and hotel searches are down 55%. These figures are skewed by a strong start to the year and latest monthly figures show a fall of 70% in bookings and 61% in searches.

Easing Restrictions

On 10th September UNWTO reported that 53% of countries worldwide had started to ease travel restrictions that were introduced in response to the pandemic.

UNWTO Secretary-General Zurab Pololikashvili said: “Coordinated leadership and enhanced cooperation between governments means tourism is slowly but steadily restarting in many parts of the world. Starting to ease restrictions on travel opens also the doors for tourism’s social and economic benefits to return. While we  must remain vigilant and cautious, we are concerned about those destinations with ongoing full travel restrictions, especially where tourism is a lifeline and economic and social development are under threat.”

However 43% of all worldwide destinations continue to have their borders closed to tourism, 27 countries have had their borders closed for at least 30 weeks.

Restrictions in Southeast Asia have remained mostly in place although we have seen the start of international tourism in some countries.

Southeast Asia Restrictions

Singapore has introduced a number of travel arrangements and corridors while Thailand has opened its doors to a few, select, tourists.

Vietnam remains completely closed to tourists and Malaysia have said that their borders are likely to remain closed for the remainder of 2020.

Read more in South East Asia Travel Update.

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Published by flyingdogtravel

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