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Section 6. Economics of recreation and tourism
https://doi.org/10.29013/EJEMS-21-2-55-58
Akimishvili Nino,
The Doctoral Student of Georgian Technical University
E-mail:maiko@mail.ru
THE COVID-19 PANDEMIC AND ITS IMPACT ON THE TOURISM INDUSTRY AND HOSPITALITY
Abstract. The article discusses the problem of the COVID-19 pandemic and its impact on the tourism industry. According to the author, the current situation has had a significant impact on all spheres of the world economy, including tourism. In support of his main provisions, the author cites the opinion of experts, according to which such a crisis in tourism has not been observed since the Second World War. The author examines the results of a 2020 World Tourism and Travel Council (WTTC) study, according to which the virus pandemic is cutting up to a million jobs in global tourism every day. In conclusion, the author sets out his recommendations.
Keywords: pandemic, tourism industry, negative impact.
In early 2020, all countries were swept by a pan- sis in tourism has not been observed since the Sec-demic of a new type ofvirus, COVID-19, announced by the World Health Organization. The virus, the first outbreak of which was recorded in Wuhan, China at the end of 2019, has spread to all countries and continents. The borders of the countries were closed, air and rail links were stopped, and a regime of general self-isolation was introduced in many cities. It is worth noting that this is not the first time humanity is faced with a pandemic, while earlier the arsenal of means for fighting viruses was much smaller. The fundamental difference between the current pandemic is the simultaneous emergence of the so-called "pandemic of fear" associated with the rapid development of information technology and the instantaneous dissemination of information in the modern world.
The current situation has had a significant impact on all areas of the world economy, including tourism. As experts almost unanimously point out, such a cri-
ond World War. According to a study by the World Tourism and Travel Council (WTTC) in spring 2020, the virus pandemic began to cut up to a million jobs in global tourism every day. In this regard, Germany was the worst hit European country, with nearly 1.6 million jobs at risk. In second place was Russia, in third - Italy and Great Britain. In addition, Brazil, France, Japan, Indonesia, and India were hard hit. According to the researchers, only the Middle East experienced the least destructive effect from the virus. Total losses for the industry due to the virus in 2020 amounted to $2.1 trillion.
The World Tourism Organization has prepared its recommendations to mitigate the socio-economic impact of the pandemic on tourism in various countries. The document was developed with the participation of the World Health Organization (WHO), International Civil Aviation Organization (ICAO), International Maritime Aviation (IMO), Airports
Council International (ACI), International Cruise Lines Association (CLIA), International Air Transport Association (IATA) and World Tourism and Travel Council (WTTC).
The recommendations are divided into three interrelated blocks:
1) Managing the crisis and mitigating its consequences (preserving jobs; supporting the liquidity of companies; revising taxes and fees related to the tourism industry; protecting consumer rights; increasing the digital skills of tourism business workers; including tourism in general strategies for saving the economies of various regions and states, creation of anti-crisis management mechanisms);
2) Stimulating the accelerated recovery of the tourism industry (stimulating investment in tourism; ensuring the preparation of tourists for travel, including with the existing level of risk of pandemics; creating new jobs; taking into account the environmental sustainability of tourist regions; understanding the market and prompt actions in the market of tourist services; increasing the role of marketing;
3) The creation of a special governing body to regulate the restoration of tourism);
4) Preparing for tomorrow (diversifying markets, products, and services, investing in market research and digital transformation systems; improving the efficiency of tourism management at all levels; ensuring preparedness for crisis situations; investing in human capital; moving to a zero-waste economy and adopting sustainable development).
At the end of March 2020, the Government of Georgia identified the sectors of the economy that will be the first to receive state support in connection with the pandemic, including tourism, hotel business, and sanatorium-resort activities. However, we believe that the placement of the so-called "State order", that is, the placement of infected or quarantined citizens, is not a measure that can ensure the normal recovery and subsequent development of this industry. We think that the following measures would be effective:
1. Providing these industries with a minimum of six months deferral ofpayments on taxes (excluding VAT), insurance contributions to state extra-budgetary funds,
2. Extending the deadlines for submitting tax returns and settlements by at least three months, and the deadlines for submitting a claim for payment of taxes, fees, and insurance premiums by at least six months,
3. Postponement of the start date of tax audits,
4. Simplification of the procedure for providing organizations with deferrals and installments for the payment of taxes and insurance premiums for a period of up to one year, depending on the volume of reduction in the taxpayer's income and without accruing interest on the amount of debt.
We would recommend to the National Travel Agency of Georgia to develop a number of post-crisis measures aimed at the fastest possible recovery of the tourism industry, including:
1) Subsidizing costs in order to reduce the cost of a tourism product to make it more affordable for mass tourism after the end of the pandemic,
2) Subsidizing social tourism - organized trips of socially unprotected groups (schoolchildren, students, pensioners),
3) Partial subsidizing of air travel for groups to tourist regions that are inaccessible due to the high cost of the flight,
4) Support for entrepreneurial initiatives to create tourism products, tourism infrastructure facilities, etc. to create additional jobs and increase tourist flow.
With all the negative consequences of the current crisis, it is important to note the following important point: the modern tourism industry has long been on the eve of great changes. The situation resulting from the virus pandemic is likely to only accelerate the impending transformation. So, for example, trends of more active implementation of virtual and augmented reality technologies, as well as the experience economy, will become relevant. The tools to meet the needs of tourists will change. At the same
time, it is important to understand that their needs themselves will remain the same.
Perhaps the tourism market will recover relatively quickly after the pandemic, as people will need positive emotions. Although, of course, it is impossible to give an accurate forecast, especially in the context of projected changes in exchange rates. In addition, it is likely that the approach to life, in general, may change - ways of online remote communication will become commonplace. The segment of digital projects in tourism is becoming more active, which will help the formation of deferred demand and will work when all restrictions on tourist travel are removed.
Indeed, in recent years, the importance of using electronic information systems and platforms in the tourist services market has only increased. The digitalization trend in tourism implies a gradual reorientation of all market participants to the online sphere with a corresponding reorientation of financial flows and the creation of prerequisites for increasing the profitability of the tourism industry. In this regard, at present, the development and promotion of digital products for both traditional and new tourist destinations seem to be a promising direction. For example, the European Tourism Commission (ETC) posted information about a planned digital campaign to promote creative European cities in Belgium, Germany, and Poland in May 2020, and the World Tourism Organization, together with a Spanish university, launched a distance learning program in tourism.
We would recommend the National Travel Agency of Georgia to follow global trends and create a tourism development strategy right now, which would include a wide range of solutions aimed at the development of digital technologies in Georgian tourism, including:
- Introduction and development of multilingual information services for tourists;
- Development and implementation of an electronic tourist card of the guest and a similar mobile application in the cities of Georgia;
- Providing a transparent electronic system for assessing the quality of the offered tourist services;
- Providing an opportunity to get acquainted with cultural and natural attractions, museum expositions, tourist routes online;
- Creation and development of augmented reality services for navigating cities and display objects;
- Development of an open data system in the field of tourism;
- Creation of an electronic platform for the involvement of self-employed persons in tourism activities;
- Development of multimedia applications for display objects, audio, and video guide services with the ability to integrate with GPS navigation, using QR codes to generate requests.
Along with the intensification of the use of digital technologies in tourism, one more trend should be noted, which is expected for the first time after the pandemic subsides. It is likely that we will observe something like a virus phobia among tourists, when people simply will not be ready for mass travel, carefully balancing their needs and possible risks. For Georgia, this may mean an increase in the popularity of ecological tourism.
Ecological tourism involves tourists visiting relatively untouched territories by anthropogenic impact, it is aimed at increasing the ecological culture of tourists and creating conditions for the local community to benefit from environmental protection. According to the World Tourism Organization, the share of eco-tours in world tourism today is about 10%. The objects of ecological tourism can be not only natural landscapes but also cultural attractions. There are three main types of ecological tourism: scientific, educational, and recreational, depending on what purpose the tourists pursue. Unlike other types of tourism, ecological tourism requires a minimum amount of infrastructure, which from an economic point of view can be quite profitable.
The World Tourism Organization identifies ecological tourism as one of the priority areas for the
development of tourism in Georgia, which is due to the special natural conditions of our country.
Conclusion
The current crisis in tourism, resulting from the virus pandemic, is unprecedented in terms of expected losses and consequences. The forecasts for the subsequent recovery are very different. Most often, experts call the third quarter of 2021 and later dates when they express their assumptions about when the tourist market will begin to recover. Some experts assume that the way out of the crisis will take several years and we fully agree with this forecast.
In our opinion, by the time the pandemic ends and the borders between countries open, a huge pent-up demand will accumulate in the tourism industry. Domestic tourism is expected to be the first to recover. However, most likely, the purchasing power
of the population will decrease, so the demand for budget tours in their own countries will increase. As for inbound tourism, it may take much longer to recover. In this regard, it makes sense for the players of the tourist market to concentrate their efforts in the segment of domestic travel, studying and promoting potentially promising directions and developing new offers. Along with this, due to the fear of large crowds of people, mass tourism is likely to become more and more individual, the popularity of ecological tourism will increase, which previously had great potential for development in our country.
The crisis will end sooner or later, and the tourism industry will begin to recover. The tourism industry must come together to work together to develop effective responses to global threats that it may face again in the future.
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