The tourism industry is the largest contributor to global Gross Domestic Product and one of the fastest growing economic sectors. Despite that, its set-up makes it an industry that is vulnerable to disruption. An enterprise that brings together linked sectors is always going to be hard hit by an event such as a global pandemic, and each link in the tourism chain has felt the impact. It’s difficult to imagine how an industry can recover from this set of blows, but it can… and it surely will.

How Covid-19 affected tourism

When Covid-19 hit, countries had no choice but to shut down. After all, a virus which has gone on to infect 219 million people and kill 4.5 million cannot go unchecked. With lockdowns came closed borders. The world shrank. In its first ten months, the pandemic cost the global tourism industry $935 billion, a major figure compared to its $8.19 trillion contribution to the world’s GDP in 2019.

On top of the obvious impacts on airlines, hospitality and tourism operators, there is a plethora of other factors — the loss of jobs and economic blow to countries that rely heavily on tourism being just two of them.

The international economy relies heavily on tourism. In 2019, the sector accounted for 300 million jobs in both developed and developing countries. In some small island developing states (SIDS), it is responsible for the majority of GDP, as well as being a natural entry point into employment. In the Dominican Republic, tourism provides 216,000 jobs, while, in Jamaica, if tourism were to stop entirely for 12 months, there would be a 44% decrease in employment.

Protecting lives and livelihoods is crucial, and governments have had to implement a range of support measures. The Jamaican Government, for example, has provided compassionate grants to those made unemployed during Covid-19, as well as grants for self-employed workers and temporary unemployment benefits. Other governments have subsidised loans, deferred VAT, improved access to credit facilities, strengthened training and skills development, and covered traineeship expenses. These measures highlight the foundations on which the tourism industry is being rebuilt.

What are the long lasting effects?

Having said that, will the negative effects of the pandemic be long-lasting? Some can be expected to be exactly that, but that may not necessarily be a bad thing. Travel restrictions are gradually being lifted, and measures have been put in place that will allow many of us to travel, such as digital health passports and rapid testing. As soon as UK quarantine rules were relaxed, holiday bookings saw a surge, with one airline reporting a 400% increase in bookings to amber-list destinations. Even the pessimistic amongst us could agree that this shows potential — the need for the market is still there, it has simply been fettered.

Traveler behaviour has undergone a major shift, but that is perhaps not a bad thing. The pandemic has shown many people the positive impact on the planet of less frequent travel. Satellite images released by NASA and the European Space Agency showed a dramatic reduction in nitrogen oxide emissions, while further findings showed that carbon dioxide emissions in China had reduced by 25%. These are both directly related to the burning of fossil fuels.

Faced with this new reality, there has been a shift in behaviour with the added weight of international uncertainty providing the impetus to focus on domestic tourism rather than international. In fact, Visit Britain forecasts a 51% increase in domestic tourism spending for 2021, with over half of UK residents expecting more or about the same number of UK breaks in the next six months compared to normal. It’s hard to see how any aspect of tourism could have benefitted from the pandemic, but domestic travel may be the one to watch.

Robust nature of tourism

The interlinked nature of the tourism sector is both a curse and a blessing — ‘together, we are stronger’ doesn’t work in a scenario that has simultaneously broken numerous components of an industry. Primary suppliers — the destination itself, transportation, hospitality, tour operators and agents, insurance, retail and entertainment; and secondary suppliers — for example, hotel catering suppliers, have linked risk, and breaks in the flow have resulted in massive disruption. As tourism picks up, workers are reinstated, and support plans reap the benefits, the tourism supply chain will again become one of the more robust in the world.

How Albion can help

With vaccines in place, the pandemic is hopefully now on track to becoming a tragic part of history. The tourism industry has had time to work towards re-linking that shattered chain through effective conversation. Albion can help businesses rebuild by working with them in a consultative manner. By helping to communicate their Covid-19 responses through to holistic recovery. Communication with every link in the supply chain is crucial and the international conversation requires more than just translation — it has to lay the “runway” for an improved future for one of the world’s most valuable industries. To find out how Albion can help your business, please get in touch.