The Effects of The Covid-19 Pandemic On The Travel Business Industry

The impact of the Covid-19 pandemic on the tourism industry has sparked a heated debate among industry professionals, state tourism departments and academia. The United Nations World Tourism Organization reports that the tourism industry is experiencing a global crisis, with the Covid-19 pandemic causing a drop in international tourist arrivals, with losses estimated at US$30-450 billion [19]. According to the United Nations World Tourism Organization (UNWTO), the crisis puts 100 million jobs at risk, many of which are micro and small and medium-sized enterprises that employ large numbers of women, making up 54 percent of the tourism workforce. The Covid-19 pandemic has hit many countries, and the tourism industry is facing a dire situation with businesses closing, people dying and people particularly concerned about social security.

The healthcare industry, health care industry, utilities and tourism are facing the worst financial setbacks due to the pandemic. Since the coronavirus pandemic, few industries have fallen as quickly as the travel industry.

Health crises are by no means new, but from an economic standpoint, the pandemic is having a more devastating impact than previous crises in recent history (Gosling, Scott and Michael). The current COVID-19 pandemic has resulted in global challenges, economic and health crises and has had spillover effects on global industries, including tourism and travel, which are major contributors to the service sector worldwide. The pandemic hit the global economy hard without affecting any sector.

By 2025, the coronavirus will cost the world between $16 trillion and $35 trillion. That’s how much McKinseys predicts it will cost to prevent another pandemic like COVID-19, which has led to what could be a $16 trillion global economic crisis. If the coronavirus pandemic continues for a few more months, the World Travel and Tourism Council, a business group representing major global travel companies, is forecasting a global loss of 75 million jobs and $2.1 trillion in revenue.

Our measure of the overall value of tourism is the share of GDP represented by tourism-related activities in the 5 years leading up to the COVID crisis, collected by the World Travel and Tourism Council and disseminated by the World Bank. Before the crisis, travel and tourism became one of the most important sectors of the global economy, accounting for 10% of global GDP and more than 320 million jobs worldwide. Before the COVID crisis, the average annual net income from international tourism (expenditure by foreign tourists in the country minus spending by local residents on tourism abroad) in many countries was about a quarter of GDP, peaking at about 50% of GDP, as in Aruba and the Maldives. While other sectors such as healthcare, education, public transportation, media and hospitality are starting to reopen after pandemic SOPs, the travel and tourism industry is still stagnant due to its vulnerability to the vagaries of COVID-19 .

COVID-19 has affected multiple service sectors, such as travel and hotels, transportation and restaurants. The James Beard Foundation’s industry advocacy group found that restaurants are laying off an average of 91 percent of their hourly workers and 70 percent of their workforce due to the coronavirus shutdown and the pandemic. Nearly 70 percent of business travelers are traveling less than expected due to rising COVID-19 cases, according to a new survey by Morning Consult and the American Hotel & Hospitality Association.

Infographic created by Clover Network – a pos systems company
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