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1 JSSM Volume 17 Number 8 August 2022 FINAL 1 

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This is the impact of COVID-19 on the travel sector

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COVID-19

A full recovery of the global tourism sector isn't expected until 2024. Image: UNSPLASH/Eva Darron

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International arrivals have only increased by 4% in the second year of the pandemic. Image: Statista

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This is the impact of COVID-19 on the travel sector

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COVID-19 A full recovery of the global tourism sector isn't expected until 2024. Image: UNSPLASH/Eva Darron Stay up to date: COVID-19 Follow International arrivals have only increased by 4% in the second year of the pandemic. Image: Statista Don't miss any update on this topic Create a free account and access your personalized content collection with our latest publications and analyses.

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Impact assessment of the COVID-19 outbreak on international tourism

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International tourism recovered 63% of pre-pandemic levels in 2022, with Europe and the Middle East in the lead

International tourism saw stronger than expected results in 2022, backed by large pent-up demand and the lifting or relaxation of travel restrictions in a large number of countries.

Over 900 million tourists travelled internationally in 2022, double those in 2021 though still 37% fewer than in 2019.

International tourism recovered 63% of pre-pandemic levels, in line with UNWTO's scenarios published in May 2022.

Europe, the world's largest destination region, recorded 585 million arrivals in 2022 to reach nearly 80% of pre-pandemic levels (-21% over 2019). The Middle East enjoyed the strongest relative increase across regions in 2022 with arrivals climbing to 83% of pre-pandemic numbers (-17% versus 2019).

Africa and the Americas both recovered about 65% of its pre-pandemic visitors, while Asia and the Pacific reached only 23%, due to stronger pandemic-related restrictions.

By subregions, Western Europe (87%) and the Caribbean (84%) came closest to their pre-pandemic levels.

The year 2022 saw a strong rebound in tourism spending, resulting in the recovery of pre-pandemic levels in income across many destinations.

Looking ahead, international tourism is set to consolidate its recovery in 2023, backed by pent-up demand, particularly from Asia and the Pacific as destinations and markets open up.

The UNWTO Panel of Experts survey indicates that 72% of respondents expect better performance in 2023. However, most experts (65%) also believe international tourism will not return to 2019 levels until 2024 or later.

Based on UNWTO's scenarios for 2023, international tourist arrivals could reach 80% to 95% of pre-pandemic levels this year, with Europe and the Middle East expected to reach those levels. However, important risks remain ahead, especially economic and geopolitical.

Tourists are expected to increasingly seek value for money and travel close to home in response to the challenging economic environment.

UNWTO panel of experts, highlights survey January 2023

The survey conducted in January 2023 shows a slight uptick in the UNWTO Confidence Index for the period September-December 2022, reflecting improved confidence levels in the last months of the year. On a scale of 0 to 200, the UNWTO Panel of Tourism Experts rated the period September-December 2022 with a score of 123, above the expectations expressed in the September survey ahead of that 4-month period (111).

Expectations for the period January-April 2023 indicate cautious optimism, with still large pent-up demand though in a context of uncertainty and volatility. Some 51% of

Respondents expect better (38%) or much better (13%) performance, while almost half see equal performance (26%) or worse (20%). The UNWTO Confidence Index shows a slight improvement (119) in January-April 2023 compared to prospects expressed for the previous period of September-December (111).

The challenging economic environment including high inflation and the spike in oil prices, as well as the fears of a global recession, continues to be the main factor weighing on the recovery of tourism.

Furthermore, continued uncertainty derived from the Russian aggression against Ukraine and other mounting geopolitical tensions, health challenges related to COVID-19, as well as workforce shortages also represent downside risks.

The UNWTO Panel of Experts survey indicates that 72% of respondents expect better performance in 2023. However, most experts (65%) also believe international tourism will not return to 2019 levels until 2024 or later.

UNWTO outlook 2023: prospects for international tourism

Based on UNWTO's scenarios for 2023, international tourist arrivals could reach 80% to 95% of pre-pandemic levels this year, with Europe and the Middle East expected to reach those levels.

After a strong rebound in 2022, international tourism could climb close to pre-pandemic levels in 2023 driven by strong pent-up demand and the reestablishment of travel flows in most parts of the world, including the re-opening of several destinations and source markets in Asia, particularly China.

The complete recovery remains subject to certain risks like a potential economic slowdown amid high inflation and rapid interest hikes, which have increased financial costs and debt levels.

Higher food and energy prices result in lower purchasing power and weaker consumer confidence, which could weigh on travel demand in 2023, specially in terms of spending. Travellers may increasingly seek value for money and take trips closer to home in response to the challenging economic environment. The Russian offensive in Ukraine and geopolitical tensions in North-East Asia could also disrupt the normalization of travel.

Tourism Data

Panel Evaluation and Prospects

What are the main factors weighing on the recovery of international tourism?

When do you expect international tourism to return to pre-pandemic 2019 levels in your country?

Tourism: One of the Hardest Hit Sectors Amid the COVID-19 Pandemic

The pandemic caused an unprecedented disruption to tourism, with a massive fall of international demand amid widespread lockdowns and travel restrictions put in place by countries in order to contain the spread of the virus.

This resulted in huge economic and social impacts, placing over 100 million direct tourism jobs at risk, especially in micro, small and medium sized enterprises (MSMEs) which represent 80% of the sector and employ a high share of women and young people.

International travel plunged by 72% in 2020, the worst year on record for tourism, resulting in 1.1 billion fewer international tourists worldwide (overnight visitors), putting the number of travellers back to levels of 30 years ago.

International tourism experienced a 5% increase in 2021, 22 million more international tourist arrivals (overnight visitors) compared to 2020 (427 million versus 405 million). However, international arrivals were still 71% below the pre-pandemic year of 2019.

International tourism rebounded moderately during the second half of 2021. The uplift in demand was driven by increased traveler confidence amid rapid progress on vaccinations and the easing of entry restrictions in many destinations. However, the pace of recovery remained slow and uneven across world regions due to varying degrees of mobility restrictions, vaccination rates and traveler confidence.

Europe and the Americas recorded the strongest results in 2021 compared to 2020 (+19% and +17% respectively), but still both 63% below pre-pandemic levels.

Unprecedented Impact from COVID-19

2019*

2020

2021**

International tourist arrivals
(overnight visitors)

1.5 billion

406 million

429 million

Export revenues from international tourism
(international tourism receipts + passenger transport)

USD 1.7 trillion

USD 651 billion

USD 728 billion

Tourism Direct Gross Domestic Product (TDGDP)

USD 3.5 trillion

USD 1.7 trillion

USD 2.2 trillion

Source: UNWTO, * Pre-pandemic year, ** Preliminary results

International tourist arrivals

2020
-72% vs 2019
-1.1 billion

2021
-71% vs 2019
-1 billion

+6% vs 2020
+24 million

Export revenues from international tourism

-US$ 1.1 trillion 2020

2021 -US$ 1.0 trillion

2020 -US$ 1.8 trillion

2021 -US$ 1.4 trillion

The coronavirus pandemic caused a 72% decline in international tourist arrivals in 2020 and 71% in 2021, compared to 2019. This represents a loss of 2.1 billion international arrivals in both years combined.

As a result, export revenues from international tourism plunged 63% in 2020 and 61% in 2021 (real terms) which amounts to a combined loss of US$ 2.1 trillion in this two-year period.

Changes in Consumer Trends

Short-lived trends or here to stay?

Closer

Domestic tourism has shown positive signs in many markets since people
tend to travel closer. Travelers go for 'staycations' or vacations close to home.

More responsible

Sustainability, authenticity and localhood: travelers believe in the importance of creating a positive impact on local communities, increasingly searching for authenticity.

Get away

Nature, Rural Tourism and Road Trips have emerged as popular travel choices due to travel limitations and the quest for open-air experiences.

Longer stays & higher spending

2021 has seen a significant increase in spending per trip and longer stays

Related links

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Impact assessment of the COVID-19 outbreak on international tourism

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International tourism saw stronger than expected results in 2022, backed by large pent-up demand and the lifting or relaxation of travel restrictions in a large number of countries. Over 900 million tourists travelled internationally in 2022, double those in 2021 though still 37% fewer than in 2019.

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1:  Rebuilding small and medium businesses in tourism industry in post covid World

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Introductory members : Group members introdution, uni and background (? 1 mins)

Introduction : ?

First key highlights: ? world scenario post covid... a glimpse of timeline..etc

Second key highlights : ? what are the main issues facing by tourism industry.. which is mostly impacted?

Third key highlights : what are the strategies and actions in reviving the tourism industry?

Case Study : ? Malaysia - hotel/ tour guides. attractions.. how do we resolve ?

Case study : China - what are the main issues and how do the government strategise?

Comparative analysis : best practices ?

Conluding remarks.

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First key highlights: ? world scenario post covid... a glimpse of timeline..etc
After COVID-19 broke out, tourism industry pressed pause button for a long time, especially international travel. As the most populous country with a huge market for domestic tourism, during the pandemic, domestic tourism of China was heavily impacted by those changing pandemic prevention policies from different levels of governments, let alone international travels. After the pandemic, China shut down the border nearly 3 years until its reopen on 8th, January 2023. Now China resumed outbound group tours to the first batch of 20 countries including Malaysia, and some groups have already arrived in popular destinations such as Thailand and Indonesia recently. However, inbound tourism is still uncertain since the visa for tourism is not available. Hopefully the procedure will restart in the near future.

Second key highlights : ? what are the main issues facing by tourism industry. which is mostly impacted?

1. The main issues facing tourism industry include unreadiness of destinations. During the 3-year pandemic, many tourism employees have changed their career such as tour guides, drivers, hotel staff, scenic spot employee, etc., and plenty travel companies especially small and medium businesses went bankruptcy. The consequence is that when tourists suddenly rush into a popular destination, there are not enough human resources to receive them.

2. Another issue is the unfriendly policies. Some countries still have strict requirements for inbound tourists such as vaccine certificate, nucleic acid test, quarantine at home or in hotels, etc. These policies are a sort of constrains to attract more inbound tourists.

Third key highlights : what are the strategies and actions in reviving the tourism industry?

1. In 2019, in terms of the number of outbound tourists and the amount of consumption in destination countries, China ranked first in the world. Hence, soon after the reopen of borders, many countries took actions to attract Chinese tourists such as posting welcoming notes on social media by embassies in China, greeting Chinese groups at the airport by senior government officials, allowing tourists to pay by Chinese currency etc.

2. Within China, some provinces/cities cut down entrance tickets of scenic spots, proposed varieties of activities to attract more tourists during the New Year, etc.

Case Study : ? Malaysia - hotel/ tour guides. attractions.. how do we resolve ?

Case study : China - what are the main issues and how do the government strategise?

1. China is still facing the shortage of international air flights compared to the number of flights before the pandemic. Since this February, more airlines resume direct return flights to China including United Airlines, British Airlines, Thai Airways, and many Chinese airlines. The convenient air travel absolutely can boost the international tourism.

2. Another issue facing China is that inbound tourism is still paused, and policies to welcome international tourists are not ready. Besides, it is a long way to resume the confidence of potential tourists to travel to China after the pandemic.

Comparative analysis : best practices ?

1. Simplify the procedure of visa application, even can reduce the application fee within a certain period.

2. Provide professional trainings on frontline staff such as the tour guide, driver, hotel receptionist, etc, so as to provide standardized service to tourists after the long pause of work.