Late last year, the world was shaken by the emergence of a deadly virus, namely the novel coronavirus (COVID-19). What was initially presumed to be a manageable endemic, confined only in its country of origin, soon began to spread globally at a frightening speed, killing millions in its path, and bringing about an international economic crisis.
The Effects of Covid-19 on the Tourism Industry
Amidst all of this, tourism has taken a hard hit. Generally considered a ‘non-essential’ sector, it has often been one of the first to be affected by any kind of economic adversity, whether it is caused by political unrest, natural disasters, terrorist attacks, or virus outbreaks. With COVID-19, the impact has been immense and immediate, as travel bans are imposed and people are urged to stay at home.
In March, international aviation came to a standstill. Borders were shut down. Tourist attractions and non-essential businesses were ordered to halt their operation. Major festivals and events – including the Olympics – were cancelled or postponed.
According to the United Nations World Tourism Organization (UNWTO), in the first quarter of 2020 alone, the world experienced a decrease of 67 million international tourist arrivals compared to the same period last year, resulting in a total loss of about USD 80 billion in export revenues from tourism. Based on a worst-case scenario, the UNWTO extrapolated that the number could amount to USD 1 trillion by the end of the year.1
This situation affects all levels within the industry, from giant airline companies to small business owners. Currently, up to 120 million direct jobs are at risk. As of August 2020, a total of 26 airlines have met an early demise due to COVID-19, including Virgin Australia, Air Mauritius, South African Airways, Air Italy, German Airways, Miami Air International, and South America’s two largest airlines: Chile’s LATAM and Colombia’s Avianca.2 Many others are on the verge of bankruptcy.
Today — close to a year since the first reported case in China — with the vaccine still nowhere in sight and the outlook remaining uncertain, it is hardly surprising that tourism businesses and workers are bracing themselves for the worst to come.
The question is, can tourism survive post-COVID?
How the Tourism Industry Reacted to Past Crises
Admittedly, this is by and large the worst record in the history of international tourism since 1950.3 However, based on past experiences with similar crises, such as SARS in 2003, H1N1 in 2009, MERS in 2015, the tourism industry has proven to be extremely resilient. The eagerness to travel was recovered quickly as soon as health scares were under control and confidence restored.
In the wake of SARS, which caused an estimated damage of USD 54 billion on the global economy, the travel market bounced back to levels similar to pre-pandemic within just 3 months after the crisis peak.4 In a similar fashion, following the Gulf War in 1991 and the Iraq War in the early 2000’s, tourism rebounded faster than expected.
The same can be said about the Global Financial Crisis (GFC) of 2007-2008. The economic recession had, in fact, kickstarted a new era of travel. As hotel chains and airline companies were forced to restructure their business models to adapt to the recovering market, the concept of budget travel gained popularity. Online booking sites were subsequently launched. Shared-accommodation rental company, namely Airbnb, was introduced. As a result, travel became cheaper and more accessible, thereby giving birth to a more frugal and independent traveller demographic.
The Rise of Digital Nomads
To many people, travel is no longer a luxury reserved for the rich. And to some, it may even have turned into a necessity. According to a research done by MBO Partners, there are currently 4.8 million ‘full-time travellers’ or ‘digital nomads’ around the world, with at least 17 million more aspiring to travel full-time.5
Digital nomads are essentially a community of independent workers who choose to adopt a location-independent, technology-enabled lifestyle that allows them to travel and work remotely from anywhere in the world. These individuals, having embraced a nomadic existence, are unlikely to give up on travel altogether post-COVID.
The current COVID-19 pandemic might have its own silver lining for the tourism industry. The need for physical distancing has forced many people to work from home. Digital solutions are developed to replace conventional ones. What used to take place in a meeting room can now be transmitted over a video conference call.
In addition, those who had lost employment due to the pandemic might also have resorted to finding online jobs. Consequently, people are beginning to realize that a large number of jobs can actually be done remotely. What this means for the tourism industry is that, there will be more digital nomads in the years to come – those preferring to work from frequently-changing locations instead of being confined to an office.
Right now, experts are also suggesting that there might be a phenomenon called ‘revenge travel’, a newly coined term to mean a sudden surge in tourism due to pent-up desires to escape the restrictive lifestyle brought upon by COVID-19. Like the virus itself, this trend first started in China, which was one of the first nations to have successfully kept the virus in check and eased quarantine orders.
In the past few months, Chinese tourists have shown increasing confidence in domestic travel. Airline passengers are now back to around 60 to 70 percent of pre-pandemic levels.6 Travel analysts have reason to believe that the Chinese travel behaviour may be able to provide clues as to how the rest of the world might respond to the lifting of travel ban in the future.
Such dynamics can also be seen in the United States – the new epicentre of the deadly virus. Tourism rate has shown a significant increase, although most people are still opting to drive instead of fly. According to a survey conducted on 2,500 U.S. travellers, the crisis had only intensified the craving to travel. Those in the hardest-hit states were the most eager to travel in the following four months, the key reasons being a yearning for a change of scenery and wanting to see distant loved ones.7
In fact, people miss travelling so much that they are willing to take ‘flights to nowhere’. In recent months, several airlines have been running flights that land in the same place they depart from, and tickets were sold out in minutes. Most of these flights operate at full capacity, further confirming the premise that people’s itch to travel has not and will not be dampened by the pandemic. It is therefore reasonable to think that tourism will pick up as soon as travel bans are lifted.
What the World is Doing to Help the Tourism Industry
In the meantime, many governments worldwide are taking tourism-specific measures to aid recovery – offering stimulus packages, waiving taxes, encouraging investment, redesigning public spaces, and training travel professionals to follow best practices in the interest of employee and customer health.
Closer to home, the Malaysian government has been granting tax exemptions, rental rebates, discounts on utility bills, moratoriums, and wage-subsidy programmes for tourism-related companies.8 These incentives are hoped to help curb unemployment and ensure business survival in the immediate term.
On top of that, like many other countries, Malaysia is turning to domestic tourism, or ‘staycations’, to provide a buffer against the losses. In the attempt to lure hesitant travellers, the government is offering up to RM1000 of personal income tax relief for domestic tourism, as well as digital vouchers of up to RM100 per person for domestic flights, rail travel, and accommodation.9
At the same time, companies are also doing their part to sustain tourism, that is by encouraging consumers to purchase now for future travels and offering credits or vouchers in place of cash refunds for cancelled bookings. Likewise, businesses such as aviation and cruise companies are working hard to restore travellers’ confidence and stimulate demand.
All around the world, countries are moving to relax travel restrictions in phases. People are gradually returning to their normal routines. Several countries, such as Australia and New Zealand – where the virus is relatively under control – are considering the creation of travel ‘bubbles’ or ‘corridors’, which are exclusive alliances between two or more countries that have had considerable success in combatting the virus. This partnership allows citizens of the respective countries to travel within the bubble without restriction. Travel bubbles can be the first step towards reopening international travel, while limiting the risks for travellers and the countries being visited.
Obviously, there will be long-term changes in travel behaviour, with a more stringent approach to hygiene and a greater emphasis on contactless transactions. In order to make it work, governments will have to work closely with the private sector in implementing new standard operating procedures to ensure safe travel.
Without a doubt, the COVID-19 pandemic is one of the worst disasters to have befallen the travel industry. However, history and research both indicate that the industry will definitely make complete recovery, possibly turning out better than before, owing to the concerted efforts taken by all involved parties. While it is still unclear when tourism activities will fully resume, and some countries may take longer than others, there is no question that tourism will survive post-COVID.
This essay won first prize in The Language House Essay Competition 2020 (Senior Category).
1 & 3. United Nations World Travel Organization. (2020, May). Impact assessment of the COVID-19 outbreak on international tourism. UNWTO. https://www.unwto.org/impact-assessment-of-the-covid-19-outbreak-on-international-tourism
2. The 2020 airline bankruptcy list is open. (2020, August 21). Allplane. https://allplane.tv/blog/2020/1/17/airlines-that-stopped-flying-in-2020
4. Stacey, J. (2020, June 2). Tourism Policy Responses to the Coronavirus (COVID-19). OECD. https://www.oecd.org/coronavirus/policy-responses/tourism-policy-responses-to-the-coronavirus-covid-19-6466aa20/
5. Digital Nomads: Who they are and why are they growing? (n.d.). MBO Partners. https://www.mbopartners.com/state-of-independence/research-trends-digital-nomads/
6 & 7. Shadel, J. D. (2020, July 29). “Revenge Travel” Could Spark Tourism After the Covid-19 Pandemic. The Washington Post. https://www.washingtonpost.com/travel/2020/07/29/revenge-travel-is-phenomenon-that-could-bring-back-tourism-with-bang/
8 & 9. Lee, P. F., Tan, K. L., Phuah, K.T., & Chin, M. Y. (2020, June 12). The Impact of Covid-19 on Tourism Industry in Malaysia. Taylor & Francis. https://www.tandfonline.com/doi/full/10.1080/13683500.2020.1777951