Effects of COVID-19 on the Tourism & Travel Industry

Travel and tourism sectors remain one of the key employers in most countries across the globe, which facilitates searching for means of survival. Travel and tourism industries also link other industries and sectors; hence, they contribute significantly to nations’ economic survival. The manufacturing, energy, and agriculture sectors heavily rely on the travel and tourism industries for growth and development.

The outbreak and spread of the novel coronavirus, COVID-19 led to the disruption of the interconnectivity between the business sectors. The rate of demand for services and goods used in the travel and tourism industries dropped significantly after the coronavirus’s first case was announced. Furthermore, the reduction in travel and tourism rates dealt a heavy blow on unemployment since locally, and globally known tourism destinations were closed to curb the virus’s spread.

As of January 17, 2021, Kenya had recorded 99,162 confirmed cases of COVID-19. Measures to contain the outbreak, such as social distancing, ban on meetings over 100 people, night curfews and the early closing of bars are still in force.

According to the United Nations World Tourism Organization, UNWTO, international tourism declined over 70% in 2020, back to levels of 30 years ago. International tourist arrivals (overnight visitors) fell by 72% in January-October 2020 over the same period in 2019, curbed by slow virus containment, low traveler confidence and important restrictions on travel still in place, due to the COVID-19 pandemic.

The decline in the first ten months of 2020 represented 900 million fewer international tourist arrivals globally compared to the same period in 2019 and translates into a loss of US$ 935 billion in export revenues from international tourism, more than 10 times the loss in 2009 under the impact of the global economic crisis.

In the first half of 2020, 45 per cent of tourism businesses in Kenya estimated a revenue loss above KShs 2.5 million, as an effect of the coronavirus (COVID-19) pandemic. Roughly 23 per cent indicated losing from KShs 500 thousand to 1 million while approximately 15 per cent of businesses pointed a loss of revenue above KShs 500,000.

Tourism, both local and international, relies heavily on travel and transport. Individuals move from their places of residence to enjoy scenic views and interact with other people from different cultures. Tourism intensifies the urge to live since it allows individuals to change their environment; thus, it breaks the monotony that leads to boredom.

However, the coronavirus outbreak in Wuhan, China, in December 2019 and the related desire to stop high rates of spreading led to the halting of local and international travel. Mostly dependent on travel, tourism remains one of the economic sectors that received the hardest blow from the deadly virus. People from across the globe explicitly expressed their fears about the potential for contracting the virus, which, at the time, had neither a cure nor a vaccine. Despite the recent discovery of vaccines by some of the major research institutions such as Pfizer and BioNTech, the ravaging impacts of COVID-19 on tourism and travel will linger on people’s minds for a long time.

Loss of Employment

Employment has been severely impacted by a damaged economy. Most tourism employees have either been sent home on unpaid leave or retrenched. Employees of retail and service enterprises which are reliant on tourism income or the custom of tourism employees have lost revenue, resulting in further job losses. Private ranches reliant on tourism funding have had to reduce staff numbers and implement pay cuts to remaining employees.

For many, working remotely is not an option – either because it is not feasible for the type of job or because employees and companies do not have the technological infrastructure to make it possible. As a result, even in industries where demand is not severely constrained, the ability to work effectively, produce and earn has still been impaired.

Should you avoid travel internationally?

Travel can increase your chance of getting and spreading COVID-19. Postponing travel and staying home is the best way to protect yourself and others from COVID-19. To check travel recommendations for a certain destination, travelers are urged to follow entry requirements or restrictions at your destination which might include testing, quarantine, and providing contact information.

For travel to most of the destinations, travelers are urged to get tested with a viral test no more than 3 days before they travel internationally.

Looking Ahead: Forward-Looking Scenarios 2021 and beyond

A majority of experts see a rebound in international tourism in 2021, in particular by the third quarter of 2021, while around 20% expect it to occur only in 2022. They also consider travel restrictions as the main barrier weighing on the recovery of international tourism, along with slow virus containment and low consumer confidence.

Domestic tourism is driving the recovery of several destinations but in most cases only partially, as it is not compensating for the drop in international demand.

In the outlook beyond 2020, international arrivals are expected to rebound in 2021, based on the assumption of a gradual reversal of the pandemic, the roll-out of a COVID-19 vaccine, significant improvement in traveler confidence and major lifting of travel restrictions by the middle of the year. The expected rebound is also a consequence of the large pent-up demand after months of closed borders and travel bans.

The rebound is expected to continue in 2022 as travel conditions normalize and the pandemic is contained globally. However, international tourism could still take 2½ to 4 years to return to 2019 levels.

Opportunities still exist, however, with strategies put in place to monitor, contain and manage the infection across all the tourism-related institutions, facilities and across the board, all stakeholders and players in the sector must work together to realize the positive outcome that the world is looking forward to.

Kenya, which has tourism as one of its biggest revenue earners, will experience the effects of the pandemic in the tourism and hospitality sector for many years to come.