THE tourism industry in the world was a major contributor to the global economy — before the Covid-19 pandemic. According to BBC, global tourism accounts for 10 percent of the world’s gross domestic product (GDP) and employs over 100 million people.
United Nations Secretary-General Antonio Guterres said, “Tourism brings progress. As one of the biggest sectors in the global economy, it has great power to bridge cultures, generate new opportunities and promote sustainable development.”
Unfortunately, tourism is one of the sectors hardest hit during the Covid-19 pandemic.
Tourism during the pandemic
The following data from UNWTO, UN Tourism and other sources tell the sad state of tourism during the pandemic.
The pandemic “caused a 72 percent decline in international tourist arrivals in 2020 and 71 percent in 2021, compared to 2019. This represents a loss of 2.1 billion international arrivals in both years combined.”
Export revenues from international tourism “plunged 63 percent in 2020 and 61 percent in 2021 in real terms, accounting for a combined loss of $2.1 trillion.”
To prevent the spread of the coronavirus, countries immediately implemented widespread lockdowns and travel restrictions. All over the world, this caused an unprecedented disruption in tourism and placed the livelihood of 100 million people at risk, the majority of whom are women and the young. 2020 was the worst year for tourism, as there were 1.1 billion fewer international tourists worldwide.
In 2021, massive vaccinations in many parts of the world eased travel restrictions in many tourist destinations. This somehow buoyed up traveler confidence, and international tourism rebounded moderately by the second half of 2021. Europe and the Americas improved tourist arrivals by 19 percent and 17 percent, respectively, but these were still 63 percent below the 2019 levels.
The year 2022 saw stronger-than-expected results as more countries relaxed travel restrictions. There were 900 million tourists — twice the number in 2021 — but they were still 37 percent fewer than in pre-pandemic 2019. Europe accounted for 65 percent of tourist arrivals, but the Middle East recorded the strongest relative increase, with arrivals climbing to 83 percent of pre-pandemic levels. Africa and the Americas recovered 65 percent of pre-pandemic visitor levels, but Asia and the Pacific (APAC) recovered only 23 percent, as the latter continued to have stronger travel restrictions, perhaps owing to lower vaccination progress.
The 2022 survey of the United Nations World Tourism Organization (UNWTO) Panel of Experts reported that 72 percent of respondents expected better performance in 2023, but 65 percent said that international tourism will not return to pre-pandemic levels until 2024 or later. Europe and the Middle East are expected to lead in the recovery. Experts, however, believe that risks remain. Economic and geopolitical developments will affect international tourism’s recovery, and “tourists are expected to increasingly seek value for money and travel close to home in response to the challenging environment.”
Cautious optimism
In January 2023, the UNWTO survey reported that 51 percent of respondents expect better (38 percent) or much better (13 percent) performance of international tourism, while 46 percent see equal (26 percent) or worse (20 percent) performance in the first four months of 2023. This shows a slight uptick in the confidence level of tourism experts compared with the September 2022 survey.
The reasons for the cautious optimism are high inflation, spike in oil prices, fears of global recession, the Russian invasion of Ukraine, mounting geopolitical tensions elsewhere in the world, and continuing health challenges.
In its January 19, 2024 post on the UN Tourism website, UNWTO reported that “international tourism ended 2023 at 88 percent of pre-pandemic levels, with an estimated 1.3 billion international arrivals. The unleashing of remaining pent-up demand, increased air connectivity, and a stronger recovery of Asian markets and destinations are expected to underpin a full recovery by the end of 2024.”
Based on the tourism industry’s 2023 performance, experts say that international tourism is on its way to a recovery in 2024 or slightly beyond.
Tourist arrivals in the Middle East in 2023 were 22 percent above 2019 levels. Other notable regions include Europe (the most visited region), with 94 percent of pre-pandemic levels, followed by Africa (96 percent) and the US (90 percent). APAC arrivals reached 65 percent; South Asia, 87 percent; and North-East Asia, 55 percent of 2019 levels.
UNWTO Secretary-General Zurab Pololikashvili is confident that “the rebound is already having a significant impact on economies, jobs, growth and opportunities for communities everywhere. These numbers also recall the critical task of progressing sustainability and inclusion in tourism development.”
Impact of recovery
The UNWTO estimates that “international tourism receipts reached US$1.4 trillion in 2023, or 93 percent of 2019 level, while total export revenues (including passenger transport) reached US$1.6 trillion or 95 percent of 2019 level. Tourism direct gross domestic product (TDGDP) is at US$3.3 trillion or 3 percent of global GDP.”
Two other indicators showed positive results in 2023 — international air capacity and passenger demand recovered 90 percent of pre-pandemic levels (per IATA), while global occupancy rates of accommodation establishments reached 65 percent versus 62 percent in 2022, based on STR (Smith Travel Research) data.
2024 prospects
The UNWTO forecasts a 2 percent growth in 2024 over 2019 levels, “subject to the pace of recovery in Asia and to the evolution of existing economic and geopolitical downside risks.” Roughly 67 percent of tourism professionals expect better or much better prospects for international tourism in 2024 compared to 2023, mainly due to the following:
– Reopening of several source markets and destinations across Asia
– Acceleration of outbound and inbound tourism in China due to visa-free travel for citizens of France, Germany, Italy, the Netherlands, Spain and Malaysia
– Visa and travel facilitation measures in the Middle East and Africa, similar to the Schengen visa
– Romania and Bulgaria joining the Schengen area, and Paris hosting the 2024 Olympics
– Europe, the Americas, and the Middle East will continue to lead other sources and destinations.
The UNWTO realizes that “economic and geopolitical headwinds continue to pose significant challenges to the sustained recovery of international tourism … Persisting inflation, high interest rates, volatile oil prices, and disruptions to trade can continue to impact transport and accommodations costs in 2024.”
Here is my personal take on the prospects of tourism now and in the near future. Uncertainty and disruptions due to continuing geopolitical conflicts in some regions will continue to weigh on traveler confidence and affect international tourism. Shortages in trained tourism and hospitality staff remain a critical business and human resources issue, especially in light of increasing tourism activities all over the world.
Particularly in countries like the Philippines, it is absolutely necessary that tourist destinations must have the hard and soft infrastructures to support tourist convenience and mobility; logical, systematic and seamless integration of all tourism-related services in a one-stop shop anywhere, anytime in any tourist destination. These and other small stuff like internet connectivity, uninterrupted energy supply, courteous staff, and a safe and tourist-friendly environment can help boost a country’s tourism sector.
Ernie Cecilia is the chairman of the Human Capital Committee and the Publications Committee of the American Chamber of Commerce of the Philippines (AmCham); chairman of the Employers Confederation of the Philippines’ (ECOP’s) TWG on Labor Policy and Social Issues; and past president of the People Management Association of the Philippines (PMAP). He can be reached at erniececilia@gmail.com.
