Economic cost of COVID-19 on tourism

Peschici, Italy

Rome [ENA] UNWTO, the specialized agency of the united Nations, recorded a massive drop in international travel demand over the period January-June 2020 which translated into a loss of 440 million international arrivals and about US$ 460 billion in export revenues from international tourism. This is around five times the loss in international tourism receipts recorded in 2009 amid the global economic and financial crisis.

Even with the gradual reopening of many destinations since the second half of May, the anticipated improvement in international tourism numbers during the peak summer season in the Northern Hemisphere did not occur. Europe was the second-hardest hit of all global regions, with a 66% decline in tourist arrivals in the first half of 2020. The Americas (-55%), Africa and the Middle East (both -57%) also suffered. However, Asia and the Pacific, the first region to feel the impact of COVID-19 on tourism, was the hardest hit, with a 72% fall in tourists for the six-month period. At the sub-regional level, North-East Asia (-83%) and Southern Mediterranean Europe (-72%) suffered the largest declines.

All world regions and sub-regions recorded declines of more than 50% in arrivals in January-June 2020. The contraction of international demand is also mirrored in double-digit declines in international tourism expenditure among large markets. Major outbound markets such as the United States and China continue to be at a standstill, though some markets such as France and Germany have shown some improvement in June. International tourist arrivals plunged 93% in June when compared to 2019 and show the severe impact COVID-19 has had on the sector. According to the new issue of the World Tourism Barometer from the United Nations specialized agency, international tourist arrivals dropped by 65% during the first half of the year.

This represents an unparalleled decrease, as countries around the world closed their borders and introduced travel restrictions in response to the pandemic. Over recent weeks, a growing number of destinations have started to open up again to international tourists. UNWTO reports that, as of early September, 53% of destinations had eased travel restrictions. Nevertheless, many governments remain cautious, and this latest report shows that the lockdowns introduced during the first half of the year have had a massive impact on international tourism. The sharp and sudden fall in arrivals has placed millions of jobs and businesses at risk.

Looking ahead, it seems likely that reduced travel demand and consumer confidence will continue to impact results for the rest of the year. Current trends through August point to a drop in demand closer to 70%, especially now as some destinations re-introduce restrictions on travel.