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How Does Travel Business Suffer during a Pandemic Guide

21 July 2021

We don’t have to travel for what we do online. For example, we don’t even have to leave our house to play on GG Bet. But when we have to travel, whether, for work or vacation, we also have to consider external factors. In other words, a pandemic, for example, can affect all our travel plans, and the travel industry is naturally affected too. So how do pandemics, specifically COVID-19, affect the travel industry? Below we try to answer this question.

Covid Was Not the First Pandemic to Affect Tourism

Many factors affect tourists’ visits to a country. Some of these are shaped by the natural and physical conditions of the destination, while others are shaped by its political, social, and economic stability. Therefore, if the destination (or the trip itself) is not perceived as safe, this negatively affects tourism too. The most important factor affecting this perception is the crises experienced in the countries. Crises can occur due to many different factors, and pandemics and epidemics are among the causes of them. For example, SARS, Bird flu, Swine flu (H1N1), and Ebola outbreaks are known to negatively affect the tourism sector.

SARS, which emerged in 2002 and infected a total of 8,000 people, caused many countries (especially China and Hong Kong) to impose transportation restrictions. A businessman travelling from China carried the disease to Vietnam in February 2003, from where it spread all over the world. After the SARS epidemic, the number of foreigners coming to China decreased by 6.5% compared to the same period in 2002. Another place affected by the epidemic is Toronto, Canada. In April 2003, there was a 60% decrease in tourist expenditures compared to the same period of 2002.

MERS, originating from the Middle East, on the other hand, has affected the Arabian Peninsula in September 2012 as another coronavirus originating disease. In South Korea, another country where MERS was experienced, approximately 2.6 billion dollars of tourism income was lost. From June to September 2015, the loss in the number of tourists was about 37%. The most important reason for this is that tourists, who are afraid of the disease, cancelled their trips instead of delaying them.

Unlike these two examples, COVID-19 has become a global problem with a faster, wider, and more effective spread. COVID-19 was first moved to Europe and then to America after China, and the disease was declared a pandemic by WHO as of March 11, 2020.

COVID-19 and Its Impact on the Travel Industry

With a growth rate of 4-5%, the tourism sector alone meets 8% of the global GNP and 10% of employment. In addition, tourism affects more than 135 sectors with its high multiplier effect, contributes to the balance of payments by creating foreign currency inflows, and triggers many leading industries such as transportation, trade, construction, health, and finance. In other words, it has an important place in the economy of every country, and a situation that affects the tourism sector is felt in the entire economy. For example, LA hotels were hit dramatically in 2020 but reports from 2021 (Source: LA Times) said that they are back on 2019 levels well above national average. That’s the bounce back effect.

Although tourism is an important global economic sector, it is very vulnerable to crises in any country or region of the world. Because tourism demand has a structure that can be “postponed,” it is overly sensitive to security problems, economic crises, and health problems.

Tourism is also a “non-storable” product, so it cannot be stored for future sales like physical goods. Except for a few examples in the past, all global crises had regional effects and could only have a limited impact on the global tourism industry. However, this is not the case for COVID-19. Given its impact and speed, it is difficult to say that the global tourism industry has faced a crisis like COVID-19 before. According to a study published in Tourism Economics, the impact of COVID-19 is expected to be seven times more devastating than the 2008 financial crisis.

How Does the Travel Business Suffer during a Pandemic Summary

According to the statements made by the World Tourism and Travel Council (WTTC), it is stated that this epidemic may leave 100-120 million people worldwide unemployed in the tourism industry, which constitutes about 10% of the global GDP, and may cause a loss in travel and tourism GDP of up to 2.1 trillion dollars. In addition, the World Tourism Organization has stated that international tourist visits will be 20-30% less than expected in the coming years.

In a report published by Tourism Economics, it is stated that the impact of the epidemic on travels may continue for months, causing a decrease in global travels by about 39%, but a rapid recovery process will begin after 2021. In addition, a 23% decrease is expected in domestic travel.

Since tourism requires human mobility, it has been one of the first and most severely affected industries by COVID-19. At the same time, since tourism is not a compulsory consumption, it is expected to enter a longer-term recovery period after other industries recover and to regain its former dynamism after 2021.

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