The future of the tourism industry remains uncertain, with the ongoing impact of the COVID-19 pandemic. International tourism is projected to experience an approximate 80% decline in 2020. However, domestic tourism is playing a role in mitigating some of the losses.

Governments have swiftly implemented impressive measures to revive the sector, safeguard employment and enterprises. Several nations are also actively crafting strategies to establish a more robust tourism economy after the pandemic. 

These strategies encompass devising plans to facilitate the sustainable recuperation of tourism, fostering the shift to digital platforms and more environmentally friendly practices, as well as reimagining the future of the tourism industry.

Sustainable tourism recovery

The tourism sector continues to suffer significantly due to the impact of the COVID-19 pandemic, and the future remains uncertain.

The OECD predicts a substantial 80% decline in international tourism during 2020. Locations heavily reliant on international, business, and event-based tourism are facing particular challenges, while coastal, regional, and rural areas are faring relatively better than urban centres.

Though positive news about vaccines has sparked hope for recovery, obstacles persist. The sector is expected to remain in a state of survival until well into 2021.

While domestic tourism has resumed and is helping mitigate the effects on employment and businesses in certain places, true recovery hinges on the return of international tourism. This necessitates global collaboration and evidence-backed solutions to safely lift travel restrictions.

Without ongoing governmental assistance, the viability of businesses within the tourism ecosystem is jeopardised. Despite commendable efforts by governments to mitigate the blow to tourism, minimise job losses, and foster recovery in the coming years, more comprehensive and coordinated action is required. 

Essential policy priorities include:

• Rebuilding traveller confidence.
• Assisting tourism enterprises in adapting and enduring.
• Encouraging domestic tourism and facilitating the secure revival of international tourism.
• Providing clear information to travellers and businesses, while reducing uncertainty as much as possible.
• Adapting response measures to maintain sector capacity and address support gaps.
• Enhancing cooperation within and between countries.
• Constructing a more resilient and sustainable tourism industry.

While short to medium-term flexible policy solutions are necessary for the tourism economy to coexist with the virus, it's crucial to look beyond this phase and take measures to learn from the crisis, which has exposed inadequacies in government and industry readiness and response capabilities. United action among governments and the private sector is imperative.

This crisis presents an opportunity to reimagine the future of tourism. The sector stands at a crossroads, and the strategies implemented today will shape the landscape of tourism tomorrow. Governments must consider the long-term repercussions of the crisis, harness digitalization, support the transition to low-carbon practices, and facilitate the structural changes required to cultivate a more robust, sustainable, and resilient tourism economy.

Tourism crisis: Uncertain future

The tourism industry, currently in the midst of a profound crisis, finds itself standing on uncertain ground, with the path to recovery and the shape of its future outcomes presenting a complex challenge.

• Pandemic's Impact on Tourism

The global tourism industry experienced severe repercussions due to the COVID-19 pandemic. Activities ground to a halt as containment measures were implemented, and the combination of travel restrictions and economic downturn has led to an extended recovery period. The inability to travel and the resulting economic challenges have cast uncertainty over the sector's rebound.

• Tourism Activities Disrupted

Tourism, as one of the earliest and hardest-hit sectors, came to a standstill globally as countries enforced containment measures to control the virus's spread. This disruption stemmed from the need to limit movement and interactions, drastically impacting tourism-related activities such as travel, accommodations, and entertainment.

• Challenges to Recovery

The path to recovery for the tourism sector faces substantial hurdles. Travel restrictions persist, hindering the industry's ability to regain its momentum. Additionally, the gradual deployment of vaccines, while a positive development, presents challenges. The slow pace of vaccination could result in intermittent disruptions to the sector's activities, prolonging the road to recovery.

• Impact on Business and Confidence

The series of disruptions caused by the pandemic eroded business and traveller confidence. The uncertainties stemming from the unprecedented challenges have made it difficult for enterprises to plan for the future. This uncertainty impacts the viability of businesses in the tourism sector, which are reliant on customer confidence and demand.

• Tourism Resilience Tested

While the tourism sector has shown resilience in previous crises, the scale and dual challenges of the current crisis—economic and health-related—have created an environment of uncertainty. Despite historical resilience, the unique nature of this crisis and the profound impact on both aspects present an unpredictable recovery trajectory.

• Domestic Tourism's Role

As international tourism faced limitations, domestic tourism emerged as a crucial pillar for short to medium-term recovery. While international travel remained constrained due to restrictions, domestic tourism experienced a resurgence, offering support to tourism destinations and businesses. However, successive waves of the virus have impeded the progress of domestic tourism's recovery.

• Uneven Domestic Tourism Recovery

Some countries, like Spain and the UK, projected a substantial decline of 45-50% in domestic tourism for the year. The recovery of domestic tourism has been hindered by ongoing domestic movement restrictions and evolving patterns of demand. The uncertain nature of the virus's impact on daily life has influenced how people approach leisure and travel, further affecting the uneven trajectory of recovery.

• Broad Economic and Societal Impact

The impact of the pandemic extends beyond the tourism sector, affecting individuals, regions, and enterprises. The tangible consequences ripple across economies, leading to the loss of jobs, closure of businesses, and disruptions in various sectors. Given tourism's substantial contribution to GDP, employment, and service exports, the wider economic and societal consequences are profound.

• Tourism's Pre-Pandemic Significance

Tourism played a pivotal role in economies worldwide, directly contributing to GDP, employment, and service exports. In certain nations, such as France, Greece, Iceland, Mexico, Portugal, and Spain, its economic significance was even more pronounced. The sudden halt in tourism activities disrupted not only these economic figures but also the broader economic health of these nations.

• Interlinked Sectors Impacted

Tourism's impact reverberates through interconnected sectors, emphasising the deep linkages between tourism and areas like food production, transportation, and business services. Around one-third of the value added generated by domestic economy-generated tourism is attributed to indirect impacts, highlighting the intricate web of connections that sustain tourism-related activities.

• Global GDP Losses Due to Crisis

According to UNCTAD analysis, the crisis could lead to substantial global GDP losses—up to 2.8% (USD 1.2 trillion)—if international tourist arrivals decrease by 66%. Countries such as Croatia, Portugal, Morocco, Greece, Ireland, and Spain are particularly vulnerable. These figures underscore the significant economic repercussions of the tourism standstill on both individual nations and the global economy.

Each of these aspects paints a comprehensive picture of the challenges and consequences that the tourism sector faces in the wake of the COVID-19 pandemic.

Tourism policy: Long-term implications

The increased awareness of climate change and the negative impacts of tourism is likely to elevate the significance of sustainability in travel decisions. Natural areas, local and regional destinations are anticipated to lead the recovery, with a potential reduction in environmental impact due to shorter travel distances.

• Domestic tourism is poised to benefit, as individuals opt for local getaways within their own country. Such tourists often exhibit price sensitivity and lower spending tendencies.

• The crisis has considerably shaken traveller confidence, resulting in prolonged reduced demand and tourism consumption even beyond the initial shock.

• Traveller behaviour will be moulded by the ongoing crisis and long-term consumer trends affecting travel. This might give rise to new market segments, emphasising safety protocols and contactless tourism experiences.

• Safety and hygiene now drive destination and activity choices. Individuals may prefer 'private solutions' that avoid large gatherings and prioritise private transport, which could impact the environment negatively.

• The tourism supply chain is expected to undergo structural changes. Not all businesses will endure the crisis, leading to reduced sector capacity, which could limit recovery.

• Skills scarcity in the tourism sector could intensify as job losses prompt workers to transition to other industries.

• Decreased investment will necessitate proactive policies to encourage and restore tourism sector investments, maintaining service quality and fostering sustainable recovery.

• Digitalization in tourism services will likely continue to advance, involving increased automation, contactless payments and experiences, virtual offerings, and real-time information.

• Tourism policy will require heightened responsiveness, with a long-term shift toward more adaptable systems capable of swiftly aligning with policy changes. Crisis management, safety, and health policies will demand particular attention.

Tourism policy: Lessons and way forward

The COVID-19 crisis has dealt a severe blow to the tourism economy, impacting livelihoods, communities, and businesses. As the pandemic's effects continue to unfold, the full extent of its consequences remains uncertain. Nevertheless, a return to the pre-crisis "business as usual" seems unlikely. 

Policymakers must extract lessons from this crisis to construct a more robust and resilient tourism economy for the future. Although specific outcomes remain uncertain, several initial insights can be identified:

• Government Response and Integrated Policies

The COVID-19 crisis prompted governments to collaborate cohesively, highlighting the significance of integrated policies to facilitate recovery within the tourism sector. Swift and targeted support for vulnerable tourism businesses, workers, and travellers has emerged as a pivotal strategy. This ongoing support acknowledges the unique challenges faced by the tourism industry and emphasises the need for collective efforts to ensure a well-coordinated response. 

• Multilateral Collaboration and Support

The revival of the tourism sector hinges on robust multilateral collaboration and substantial support. The pandemic's global impact necessitates collaborative efforts across borders to restore travel, instil confidence among travellers and businesses, stimulate demand, and hasten the recovery process. The establishment of effective international coordination systems becomes imperative to ensure coordinated responses in the face of future shocks. 

• Sector-Specific Assistance

The unique challenges faced by the tourism sector demand dedicated support strategies. Governments need to provide targeted assistance to address the extended demand constraints experienced by certain sectors, as well as the vulnerabilities of destinations and small businesses. The pandemic's impact has highlighted the critical role of the tourism industry not only in economic terms but also in sustaining livelihoods.

• Long-Term Preparedness and Sustainable Recovery

Support measures should extend beyond immediate relief and focus on preparing businesses and destinations for future demands. This forward-looking approach involves ensuring the sustainability of businesses post-support and aligning assistance with the long-term implications of the crisis.

• Policy Clarity and Communication

Transparent communication and clear policy frameworks play a pivotal role in reigniting the tourism sector. The uncertainty stemming from the crisis has eroded business and traveller confidence, necessitating well-structured information policies. Governments must communicate clearly when altering travel restrictions and containment strategies in response to evolving virus situations. Providing epidemiological criteria and rationale behind decisions helps build trust and understanding among stakeholders.

• Data-Driven Decision Making

The crisis has highlighted the necessity of reliable data for informed policy and business decisions. Robust data collection, research, and analysis are vital in rapidly changing situations. Timely, comparable, and detailed data serve as a foundation for evaluating the effectiveness of support programs, tracking recovery trajectories, and assessing the resilience of the tourism sector. Data-driven insights are essential for safely easing travel restrictions and orchestrating the restoration of the international tourism ecosystem.

• Scientifically Grounded Solutions

Navigating the complex terrain of the pandemic's impact on tourism requires solutions grounded in scientific understanding. As the sector seeks to ease travel restrictions and restore normalcy, evidence-based decisions are crucial. Such an approach is essential to address the uncertainty of the tourism economy's future trajectory.

FAQS

FAQs on Foreign Tourist Arrivals in 2023

• What is the projected number of foreign tourist arrivals for 2023?

 The forecast for foreign tourist arrivals in 2023 is set at 15 million.

• How does this projection compare to pre-pandemic levels?

Although the projection indicates a strong rebound, it is important to note that the anticipated 15 million foreign tourist arrivals in 2023 remains below the pre-pandemic level of over 10 million arrivals per year.

• What factors are contributing to this anticipated rebound?

The rebound in foreign tourist arrivals is likely influenced by improved conditions and increased travel confidence as the pandemic situation evolves. Various destinations and travel-related businesses have been actively working to attract visitors and restore traveller trust.

• Are there any specific regions or countries driving this rebound?

The projection does not provide region or country-specific details, but it suggests an overall positive trend in foreign tourist arrivals.

• How significant is this rebound for the tourism industry?

The rebound signifies a positive trajectory for the tourism industry, indicating that travellers are gradually regaining confidence and interest in international travel. However, the figures should be interpreted in the context of the overall impact of the pandemic on tourism.

• What challenges might the tourism industry still face despite this rebound?

While the rebound is a positive sign, the tourism industry might still face challenges related to ongoing travel restrictions, changing consumer behaviours, and uncertainties surrounding the pandemic's trajectory. Recovery to pre-pandemic levels might take time due to these factors.

• Is the projected rebound sustainable in the long term?

The sustainability of the rebound depends on various factors, including the global health situation, government policies, and economic conditions. A sustained recovery may require continued efforts to ensure traveller safety, promote destinations, and adapt to changing travel preferences.