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The world tourism industry in deep crisis

by magictr
July 29, 2020
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The world tourism industry in deep crisis
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Le tourisme mondial en crise profonde

Photo: Gabriel Bouys Agence France-Presse
Passengers stand in line at the airport Barajas Adolfo Suarez Madrid, the city where is located the headquarters of the world tourism Organization.

The world tourism industry is in a deep crisis. The losses caused by the pandemic are now growing in number by three those experienced during the great recession of 2008-2009. And it is now not back to the level of activity pre-pandemic prior to 2024 in the aviation sector.

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In his latest edition of the Barometer, global tourism, the UNWTO figure is 98% the decrease in the number of international tourists in may due to the closure near complete markets. The Barometer also shows a decline of 56% year-on-year tourist arrivals between January and may, says the world tourism Organization, which number 300 million, with the drop of tourists and at 320 billion US $the decline in international tourist receipts relating to it, is ” more than three times the loss of the global economic crisis of 2009 “.

The specialized organization of the united Nations speaks of a shy restart, limited by the resurgence of cases of COVID-19 at several locations in the world. She noted ” a gradual change and careful of the tendency, particularly in the Northern hemisphere and, in particular, following the opening of the borders beyond the Schengen area of the european Union on 1 July. But the fall in its confidence index remains at record levels, both for the evaluation of the period January-April, 2020 as to the outlook for may-August.

98%

It is the decline in the number of international tourists in may, according to the world tourism Organization.

The brakes to a recovery, or the risks to the downside remain high, the UNWTO referring to the travel restrictions and border closures still in place in most of the destinations, the safety concerns associated with travel, the resurgence of the pandemic and the risk of new blockages, curfews or quarantines. In addition to the United States and China to neutral, these countries being the main sources of international tourists. “Recent data clearly show the importance of reviving tourism as soon as it is safe to do so. The dramatic drop in international tourism threatens millions of livelihoods, including in developing countries, ” insists the Organization.

In its estimates of may, the UNWTO predicted a fall of 60 to 80 % of the number of international tourists for the year 2020, with revenue losses of up to a total of 910 to 1200 billion, and the “endangering of 100 to 120 million direct jobs in tourism,” said Agence France-Presse.

Air traffic in berne

The air transport, a major component of the tourism industry, has been hit hard by the crisis. In its updated forecast on Tuesday, the international air transport Association (IATA, in English) regrowth of a year, to 2024, its target return at the level of activities in the pre-pandemic.

Starting from a low point touched in April, the recovery in passenger traffic is growing more slowly than expected. This traffic, as measured in kilometers-paying passengers, still remained down by 86.5 % compared with the same period of the previous year, barely better than the plunge of 91 % measured in may. “This has been driven by the rising demand on the domestic markets, particularly in China,” said IATA.

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By segment, the demand of domestic traffic has declined from 67.6 per cent in June compared to June 2019, after a decline of 78.4 % in may, forcing a decrease of 55.9% of the capacity. For its part, the international traffic in June decreased by 96.8% and has only slightly improved compared to a reduction of 98,3 % in may, year-over-year. The capacity was down 93.2% on these roads.

Although the developed economies outside of the United States have largely managed to contain the spread of the virus, further outbreaks occurred here and there. In addition, there is little sign of containment of the virus in the United States and in a number of major emerging economies, claiming in the aggregate approximately 40 % of the global market of air transport, says the IATA.

Pent-up demand

The Association, which brings together 290 airlines claiming 82 % of the air traffic world, evokes the existence of a pent-up demand for visits to friends and relatives and leisure travel. The airlines must, however, deal with a new situation involving business travel.

“It is expected that the budgets of the travel business are very limited as the companies continue to be subject to financial pressures […] In addition, although the historical growth of GDP and the air transport have been strongly correlated, the surveys suggest that this link has weakened, in particular as regards business travel, because the video conferencing seems to have made significant inroads as a substitute for in-person meetings. “

In these latest projections, the IATA expects a demand decrease of 54 % in 2020, resulting in a reduction of half of the revenues of the airlines, is of 419 billion US$, and total losses of 84,3 billion.

Shortfall

The UN issued at the beginning of July of scenarios, showing a shortfall ranging from 1200 to 3300 billion for the tourism and related sectors such as hotels, restaurants and suppliers of products and services — arising out of the restrictions related to the COVID-19. The united Nations Conference for trade and development, recalled when tourism accounted for about 300 million jobs in the world in 2019.

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