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THE OUTBREAK OF SARS-COV-2 (COVID-19): IMPACT ON INTERNATIONAL TOURISM
Sunil Kakkar
Poddar Management and Technical Campus, Jaipur
Covid-19 is an infectious disease and it is spreading at uncontrollable pace worldwide. The global economy is affected by the outbreak of the pandemic as the world is on halt to safeguard the humanity. From the start of pandemic from Wuhan, China, Covid-19 has travelled a lot across all the international borders which forced the governments to shut down the countries for weeks. Along with other sectors, tourism appeared one of the highly affected sectors during Covid-19 as all the domestic borders within countries and internationals borders are sealed to secure human lives. This has posed an unimaginable threat to the tourist industry worldwide which may remain for months or years under the fear of the disease. Airline, railways, and hotels are the most affected and there is a huge loss of revenues in the sector. It is also expected that millions of people will lose their jobs worldwide during this time. This poses a threat for the world's economies. This paper studies and highlights the impact of coronavirus (Covid-19) on travel and tourism and also suggests some recovery measures.
Keywords: Covid-19, pandemic, tourism. Introduction: Covid-19
COVID-19 has been identified for the first in China, the Wuhan city in the month of December 2019. It is an infectious disease which cause respiratory problem (WHO 2020a; Huang, Wang, et al. 2020). The virus is infectious in nature and spreads quickly from a person to person during close contact, via coughing, sneezing, and talking.1 It may stay on the surface for long and it may infect the persons if they touch the contaminated place and then their face, mouth, nose, and eyes. 2
Fever, cough, fatigue, loss of smell and problems with breathing are the common symptoms (Hopkins and Kumar 2020). Some people observe Acute Respiratory Distress Syndrome (ARDS), followed by multiple organ failure (Murthy et al. 2020; Cas-cella et al. 2020; Bikdeli et al. 2020). Frequent hand washing, social distancing, quarantine, and covering coughs are the measures mostly recommended to prevent infection. 3 According to WHO, no antiviral treatment is available for COVID-19 (WHO 2020a). Emergency use of antiviral medicine remdesivir is authorized by United States for hospitalized lives with severe COVID-19 (FDA 2020). Most of the people who are affected by the virus experiences mild respiratory problems and do not require special medical treatment and recover soon. Old age persons and persons with some medical history face the possibility of serious illness.
The normal period between infection and rise of symptom ranges from one to fourteen days and is five days generally (WHO 2020b). Some people infected are not exJournal of Globalization Studies, Vol. 12 No. 1, May 2021145-158 DOI: 10.30884/jogs/2021.01.08
posed to any symptoms related to Covid-19 and are called as asymptomatic carriers. These are the most dangerous forms of carriers and transmission of disease is possible to a greater extent (Arons et al. 2020). As of April 06, 2020, transmission of disease from asymptomatic carriers ranges widely from 5 per cent to 80 per cent (Heneghan, Brassey, and Jefferson 2020).
Covid-19: Cases so Far
Since December 2019, the world has reported 15,56,65,214 confirmed cases so far with global deaths reached to 32,50,648 up to May 06, 2021 04:43 CEST, as confirmed by World Health Organisation (WHO 2020c).
It is predicted that the cases may cross 18 Cr worldwide by the end of December 2021. Countries worked hard to find the vaccine for the disease as the only light of hope for the world to stop the chain of Covid-19 and control the deaths. As of 05 May 2021, a total of 1,171,658,745 vaccine doses have been administered. Still the new variants of Covid-19 is giving continuous threat to the world economies as a whole.
Covid-19: Global Economic Slowdown
SARS-CoV-2 (Covid-19) pandemic has led to major economic and social disturbance worldwide (NYT 2020a). It is the one of the largest recession globally till time among all the pandemics declared so far (Gopinath 2020). The effect of pandemic is huge and it leads to cancellation of many events worldwide: sports, religious political and cultural events are widely affected (NYT 2020b). Initially, at the start of 2020, the pandemic led to the shortage in supply of almost all items of regular and daily use due to panic buying by the consumers around the globe (Scipioni 2020; Huang 2020). On a positive node, it leads to positive environmental effects as there is decrease in harmful pollutants and gases (Watts and Kommenda 2020). 4 For safety and health reasons most institutions, including schools, colleges, universities, temples, churches, gurudwaras, and masjids have been closed nationwide in almost all countries. This has significantly impacted education for students (UNESCO 2020).
Tourism during Covid-19: The Worst Hit
Travelling and tourism has become one of the most affected sectors worldwide as countries have put all the domestic and international flights on hold looking towards the outbreak of coronavirus. There are travel bans in almost all the destinations across countries and travel attractions around the world are closed till further notice. Governments advised to open them once they analyze the effect of COVID-19 in their country and once they can control the disease. As all the domestic borders within countries as well as international borders are closed to stop the spread of COVID-19, tourism is affected a lot across the world. Almost all the countries worldwide have imposed travel restrictions. Airlines in almost all the destinations are cancelled with reduction in hotel occupancies. Due to cancellation of flights, Flybe, the British airline, is almost collapsed (BBC 2020). The cruise is being hit badly (Turner 2020), and railways are also closed worldwide in most of the destinations (Reuters 2020).
This has given an unimaginable threat to the tourism industry worldwide and may last for months or years in the situation of the fear of the disease. Tourism, travel and hospitality worldwide are affected the most and in the coming months will fight for sur-
vival. The outbreak of the disease has forced the tourist sector to work with no revenues during the period. This is creating havoc on world's economies.
Although, this is too early to predict the global loss in tourism as we are in the middle of the crisis and no one knows when it ends. However, the WTTC estimates that the tourism and travel sector stands to lose 100 million jobs and suffer a 50 per cent decline in global travel. The tourist business has suddenly recorded a zero in revenues and the stakeholders like hotels, restaurants, pubs and bars are near to survival. Many lost their jobs and may became bankrupt. The aviation industry is also affected a lot during Covid-19 and there is a fear of breakdown in the sector due to heavy expenses and zero returns.
Hopefully, tourism worldwide, in the new normal, will soon follow the new pattern and the business model of tourism industry will change and it requires a great deal of commitment for the health of the visitors and this is not only the responsibility of the industry itself, the governments should also take some bold steps to change the industry soon which includes the financial support as well. Tourism will have to transform.
According to UNWTO, due to SARS-CoV-2, a reduction in international tourism has been reported at nearly 22 per cent in the first quarter of 2020 and may increase up to 80-percent decline at the end of 2020 and will continue to fall till the recovery of the pandemic, as compared to year 2019 (UNWTO 2020b). As informed by United Nations World Tourist Organisation (UNWTO), tourist arrivals globally could decline by 20 per cent to 30 per cent in the year 2020 which nearly counts for a great loss from 290 to 440 million international tourists worldwide (UNWTO 2020c) (see Figure 1).
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Fig. 1. 2020 forecast - international tourist arrivals, world (millions)
Source: UNTWO (e) estimate.
It is also estimated that international tourism exports may face a loss of 300 to 450 US$ billion which is almost one third of the US $ 1.5 trillion generated globally, in the worst-case scenario (UNWTO 2020c) (see Figure 2).
20D3 SARS
1 210
1.C60
+=a uss biiiion
-1.4% (lea Hem«)
0
20M 2001 2002 2003 200-1 20C5 2006 2007 2033 2003 2010 201J 2012 2013 2014 2015 2016 2017 2013 2013 2020
№ («1
Fig. 2. 2020 forecast - international tourism receipts, world (us$ billion)
Source: UNTWO (e) estimate.
The overall loss for tourism counts for 5 years to 7 years of loss respectively in terms of number of tourists.
Restrictions in Travel
Restrictions in travel is common among all the countries during the Covid-19 pandemic, many have set guidelines; passengers being quarantined, complete bans on the entry, hard travel restrictions (NYT 2020c). Many countries have put restrictions on their own citizens and advised not to travel in affected countries (Smartraveller 2020). People around the globe have also shown zero willingness for travel in any part of their country or worldwide. This has led to a negative impact on tourism which is economically hit (Fredman 2020). Governments worldwide have shown their concern to stop the spread of coronavirus by putting restrictions on travel and to control them effectively (Nsikan, Akpan 2020).
According to UNWTO, international travellings have never been restricted in such an extreme manner. The pandemic has enforced restrictions on all the travel destinations worldwide. The latest data shows that 100 per cent of tourists and other destinations in the current scenario have complete restrictions. Out of these, more than 83 per cent restrictions are related to COVID-19 and no destinations has lifted them so far, up to April 20, 2020 (UNWTO 2020a).
The Crisis due to Covid-19 has affected global travel and for the very first time, all countries globally have imposed travel restrictions completely including full closure in many destinations (see Figure 3).
S-
Fig. 3. Travel Restrictions as of April 2020
Source: Data Compiled by UNTWO as of April 20, 2020.
The latest analysis shows that 217 destinations have been restricted so far: 45 per cent destinations have closed their borders for tourists completely or partially; 30 per cent destinations have suspended their international flights - totally or partially; 18 per cent destinations have restrictions on travel for passengers from selected countries of origin; 7 per cent destinations are applying safety measures like quarantine or self-isolation of passengers for 14 days (see Figure 4) (UNWTO 2020a).
Fig. 4. Category of travel restrictions by destinations with Covid-19 travel restrictions
Source: Data Compiled by UNTWO as of April 20, 2020.
Reduction and Cancellation in Flights
During the Covid-19 crisis, commercial flights are reduced to minimum worldwide. Worldwide commercial flights which include flights for passengers, charter and cargo
jffir 217 t
I destinations j I
■ Total or partial closing of borders ■ Destination-specific travel restriction
■ Suspension of ftighls- all or partial Different measures
flights and some business jet flights are now down almost by 73 per cent by April 2020 compared to 2019. Commercial flights in April 2020 showed an average of 29,439 per day as compared to 111,799 flights in 2019 (Petchenik 2020). This huge decline may result in financial problems or bankruptcy for airline industry. Many governments worldwide have announced financial support to strengthen the airline sector and thus, to boost the travel and tourism.
Fig. 5. Reduced Commercial Flights
Source: https://www.flightradar24.com/data/statistics; May 09, 2020.
As represented in Figure 6, IATA - International Air Transport Association, assessed the impact of Covid-19 as of April 17, 2020, which shows growth expectations, shown by the most solid line in the figure, of RPKs based on revised economic growth. In quarter 3, limited opening of flights is expected and this recovery continues in quarter 4 but RPKs globally are expected to have almost 50 per cent recovery of their decline initially by this time. It is also estimated that RPKs decline is 48 per cent in year after year terms and revenues collected from passengers are expected to be $314 billion
lower in 2020 in compari manage this huge loss of
son to year 2019. Major concern of airline industry will be to evenues this year to meet the minimum costs (IATA 2020).
Fig. 6. Global RPK quarterly profile, % change year-on-year
Source: IATA Economics, Oxford Economics.
In March of 2020, we witnessed almost 10 per cent of all flights cancelled in comparison to year 2019. By the end of April 2020, more than 85 per cent of flights were cancelled worldwide except essentials (Aislelabs 2020).
Downfall in Hotel Industry
After Airline, hotels were mostly affected by the spread of COVID-19. As countries are locked for safety reasons and to break the chain of COVID-19, visits to national and international destinations are cancelled. According to STR, an analytics firm in tourism and hospitality, hotel rates fell down at large in March, 2020 (STR N.d.) (see Figure 7).
Fig. 7. Showing Hotel Revenue Details in March 2020
Source: STR; Revenue per available room, Average Daily Rate.
Fig. 8. Hotel Occupancy Rates
Source: Data Provided by STR; Projected.
According to STR, only 38 per cent occupancy in hotels is estimated during 2020 due to coronavirus pandemic. As of May 6, almost 70 per cent of hotels were having no occupancy and there is a complete shutdown of thousands of hotels worldwide. This rapid increase in downfall will deal with a loss of $2.8 billion every week globally and closure of hotels. As for the present revenue trends and occupancy rates, there accounts a loss of up to $400 million in room revenue per day. Based on the present situation in
hotel industry, and estimates for future in the same, there will be a loss of nearly 3.9 million jobs. With less than 35 per cent occupancy in hotels, they may close their operations and this will affect almost 33,000 businesses attached to the hotel industry (AHLA N.d.a).
Job Loss during COVID-19
As per World Travel and Tourism Council (WTTC), 10.3 % is marked as the global GDP by tourism sector but the sudden break in the sector due to pandemic will face almost 100 million job losses in 2020. This will reduce the global GDP to its lowest by the end of 2020. The tourism and travel industry face nearly 100 million loss in jobs due to the Covid-19 pandemic (WTTC 2020).
According to Gloria Guevara, WTTC president and CEO, in a short span of time in 2020, 25 million job losses are reported world-wide in the sector of tourism. WTTC analysis also shows a great economic loss to the global economy, up to $2.7 trillion GDP, from $2.1 trillion a month ago and has alerted G20 Tourism ministers for this loss (Ibid.).
Table 1
Scale of the Crisis WTTC Analysis
Potential Total Job losses Total GDP Loss
(millions) (US$billion)
Asia -63.4 -1,041.0
Europe -13.0 -708.5
Africa -7.6 -52.8
Americas -14.1 -790.9
North America -8.2 -680.7
Latin America -4.7 -83.8
Caribbean -1.2 -26.4
Middle East -2.6 -96.2
World -100.8 -2,689.4
US$ billion figures are based on 2019 prices and exchange rates.
Source: World Travel and Tourism Council.
According to American Hotel and Lodging Association (AHLA), the negative impact of the pandemic is even much worse than that of the 9/11 attack and financial crisis of 2008 together (Julio Musto... 2020). The hotel industry supports almost 8 million jobs in total, but due to drastic decline in occupancy rates, there will be massive job losses for individuals across industry (AHLA N.d.b 2020).
International Scenario in 2020 Tourism
As per UNWTO, tourism scenarios worldwide have been changed since the outbreak of COVID-19. Currently UNWTO estimates a fall of nearly 78 per cent in the sector for the current year depending on the border closure worldwide due to the pandemic. UN-WTO reported three possible scenarios. The first scenario is based on gradual removal of restrictions in travel in early July 2020 which talks about -58 per cent; the second scenario is based on gradual removal of restrictions in travel in early September 2020 which talks about -70 per cent; and third scenario talks about gradual removal of re-
strictions in travel in early December 2020 which talks about -78 per cent. Figure 9 represents the scenarios.
-ion
Fig. 9. International Tourists Arrivals in 2020: 3 scenarios (YoY monthly change, %)
• Actual data through March includes estimates for countries which have not yet reported data.
Source: UNWTO.
Note: The scenarios presented in this graph are not forecasts. They represent alternative monthly change in arrivals based on the gradual opening of national borders and lifting of travel restrictions on different dates, still subject to high uncertainty.
Recovery in Tourism: The Priorities
Countries must set priorities for a speedy recovery in tourism. A wide variety of steps are required to give strength to the industry which includes protection of jobs, providing liquidity, high level of safety and security to reduce risks, working of private and public sector organisations together for better efficiency, reopening of borders with responsible actions for public health, harmonious travel relations at global level, involvement of technology and job security with advanced training, and innovation and sustainability as the new normal where setting up new opportunities is a critical need. Some of the key points are:
• Tourism requires supported schemes for micro, small and middle level enterprises, entrepreneurs and self-employed professionals. It also requires financial support, stability and liquidity. Social benefit schemes are of need for the sector with a high level of support for workers in the era of new normal.
• Supply Chain from the first point of touch to the end user needs safety and hygiene protocols to focus on public's health and safety during their travel journey. Safety measures are to be communicated well to the travellers for and at destinations to build their confidence.
• Public-Private collaborative measures are required for a smooth opening of the sector. It helps to build trust among travellers. It invests in better and shared data systems.
• Tourism requires great deal of responsibility now and countries need to maintain this at the top of their priority for public health. Technology plays an important role here to give a smooth, safe and touchless travel experience.
• Protocols related to health in tourism should be harmonized globally. Visitors' tracing apps and work towards their international interoperability is needed.
• Creating jobs in the sector is urgent now along with advanced training opportunities.
• New normal requires a level of ecosystem which should provide more start-up opportunities, innovations in businesses, digital transformation, brilliant data-based management and monitoring systems and building a more sustainable and responsible tourism.
Expectatios of Recovery by the Year 2021
According to UNWTO, domestic travel demand will recover fast in comparison to international travel demand. Travel and tourism is expected to recover only by 2021. In Africa and the Middle East, tourism and travel is expected to recover only in late 2020. Americas are hardly to recover in 2020 while Europe and Asia have a mixed blend of expectations and may start recovering in 2020. Figures 10 and 11 represent the recovery expectations.
Fig. 10. When do you expect tourism demand in your destination will start to recover?
Source: UNWTO.
100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%
I
¡¡I
I I I I I
Africa
Americas
Asia and the Pacific
Europe Middle East
■ By May-June ■ By July-September □ By October-December "By 2021
Fig. 11. When do you expect international demand for your destination will start to recover?
Note: Read the topmost area of histogram as 'by 2021.' Source: UNWTO.
Conclusion
Covid-19 is declared as pandemic after its outbreak in China. This has reported a global lockdown to stop its spread in the mass. Tourism is one of the sectors which have been greatly affected during this period and its survival seems to be the most difficult in 2020. This has reported huge decline in the connected sectors like airlines, hotels, restaurants, and others with a great loss of jobs worldwide and economic breakdown.
Tourism needs to be redefined to a great extent. A new normal with extra protective measures may help the industry to take its new form soon but this may take not less than a year. On the other side, due to financial slowdown, airlines need to provide pocket-friendly fares to the visitors travelling for work or leisure activities with high level of in-travel protective measures. Hotels need to look for extra preventive measures with low room fares. The sector must focus on sanitization and hygiene as their topmost priority so as to decide the future of tourism. This should be done not by the mentioned sectors but by the governments that should play an active role to boost economy through tourism. The financial support is an essential to reimagine the sector. Governments should lose the control on fuel taxes and taxes over hotel industry and also focus upon hygiene and sanitization of cities and tourists destinations at large. Health facilities must be improved in all the countries where it is not in a good state. Recovery of the sector is expected in 2021 with creation of jobs in the sector, with increased financial liquidity, risk preventive measures, technological strength, responsible governments, harmonized protocols, better supply chain activities, public-private partnership, innovations and startup opportunities.
At last, the world must be ready so that the level of scientific research was high and no such pandemic should harm the humanity to such a great extent.
NOTES
1 How COVID-19 Spreads. Centers for Disease Control and Prevention (CDC). (2020, April 2). Q & A on coronaviruses (COVID-19). World Health Organization (WHO). URL: Question and answers hub (who.int). Archived from the original on 20 January 2020. Retrieved March 11, 2020.
2 Ibid.
3 Advice for public. World Health Organization (WHO). URL: who.int. Archived from the original on 26 January 2020 (retrieved February 25, 2020). Guidance on social distancing for everyone in the UK. GOV.UK. URL: [Withdrawn] COVID-19: guidance on social distancing and for vulnerable people - GOV.UK (www.gov.uk). Archived from the original on 24 March 2020 (retrieved March 25, 2020).
4 Analysis: Coronavirus temporarily reduced China's CO2 emissions by a quarter. Carbon Brief. (2020, February 19). URL: Analysis: Coronavirus temporarily reduced China's CO2 emissions by a quarter (carbonbrief.org). Retrieved April 8, 2020.
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