The State of Travel Post-Coronavirus

February 3, 2021 CATALYST Team

An empty ticketing hall at Kansai International Airport in Osaka, Japan, during the COVID-19 pandemic. Patrick Vierthaler. CC BY-NC 2.0

As the COVID-19 pandemic continues around the world, the hope that a vaccine will bring an end to the ongoing crisis comes with optimism that the road to economic recovery is near. Yet, economic recovery will likely be a slow burn, and travel is no exception.

Travel is one of the hardest-hit industries by the pandemic as border closures and trip cancellations equate to empty airports and travel destinations. According to the United Nations World Tourism Organization (UNWTO), tourism is the third-largest export category in the world, accounting for 7% of global trade. For some countries, tourism is the main driver of economic activity, accounting for a high proportion of the national gross domestic product. The British Virgin Islands is the place most reliant on tourism in the world, with travel and tourism accounting for 92% of GDP in 2018. Among Organization for Economic Cooperation and Development (OECD) countries, travel is still a major contributor to national GDP. Spain relies the most on tourism among OECD countries, accounting for almost 12% of total GDP in 2018.

“The COVID-19 pandemic will only worsen conditions for those in the travel industry”

2020 was a disastrous year for the travel industry, which reported record losses as the coronavirus spread around the world. According to a December 2020 UNWTO report, last year saw a 72% decrease in international tourist arrivals from January to October, representing a loss of 900 million international tourist arrivals compared to the same time in 2019. The Asia-Pacific region, the first to report coronavirus infections, was the hardest hit with an 82% decrease in international arrivals. According to the same report, the decline in international tourism could result in a loss of $2 trillion in global GDP, or 2% of the world total.

The pandemic’s toll on the travel industry goes beyond just loss to revenue and profit. Behind the numbers lies the human cost of COVID-19, one that will potentially disrupt the livelihoods of millions of people around the world who were already facing marginalization before 2020. As with other inequalities, such as growing income disparity, the COVID-19 pandemic will only worsen conditions for those in the travel industry who are already being left behind in the global economy. The UNWTO estimates that the COVID-19 pandemic puts over 100 million jobs in the tourism industry at risk. Women make up the majority of the industry’s workforce, so do many children who are not accounted for in the formal economy. This means that women and children are the ones bearing the most losses from the coronavirus’s effect on the travel industry, potentially worsening preexisting gender and economic disparities in the tourism industry’s workforce.

The path to economic recovery is a long road ahead, but one that is foreseeable with the rollout of several coronavirus vaccines worldwide. Some positive estimates show that travel and tourism revenue can rebound to 85% of 2019 revenue by the end of 2021, and return to pre-pandemic levels by 2023. However, some sectors of the travel industry will likely recover before others, with domestic travel expected to recover faster than international travel. Countries that rely more on international air travel, both inbound and outbound, are likely to have slower recoveries compared to countries where domestic travel is higher.

The full brunt of the COVID-19 pandemic on the travel industry is still being felt across the world. The post-pandemic reality of travel is not entirely known. Yet, even with the potential for recovery, the pandemic is going to change the state of travel for years to come. With it, travelers may have to wait longer than expected for a full return to normal next time they get feelings of wanderlust.