The huge travel hole – international arrival declines translate into USD730 billion loss in export revenues, more than eight times levels experienced on back of 2009 global financial crisis

29 October, 2020

Restrictions on travel introduced in response to the COVID-19 pandemic continue to hit global tourism hard, with the latest data from the World Tourism Organization (UNWTO) showing a -70% fall in international arrivals for the first eight months of 2020.

According to the newest UNWTO World Tourism Barometer, a monitor of short-term tourism trends, international arrivals plunged -81% in Jul-2020 and -79% in Aug-2020, traditionally the two busiest months of the year and the peak of the Northern Hemisphere summer season.

The drop until Aug-2020 represents 700 million fewer arrivals compared to the same period in 2019 and translates into a loss of USD 730 billion in export revenues from international tourism. This is more than eight times the loss experienced on the back of the 2009 global economic and financial crisis.

“This unprecedented decline is having dramatic social and economic consequences, and puts millions of jobs and businesses at risk,” warns UNWTO secretary general Zurab Pololikashvili. “This underlines the urgent need to safely restart tourism, in a timely and coordinated manner”.

All world regions recorded large declines in arrivals in the first eight months of the year. Asia and the Pacific, the first region to suffer from the impact of COVID-19, saw a -79% decrease in arrivals, followed by Africa and the Middle East (both - 69%), Europe (-68%) and the Americas (-65%).

Following its gradual reopening of international borders, Europe recorded comparatively smaller declines in July and August (-72% and -69%, respectively). The recovery was short-lived however, as travel restrictions and advisories were reintroduced amid an increase in contagions. On the other side of the spectrum, Asia and the Pacific recorded the largest declines with -96% in both months, reflecting the closure of borders in China and other major destinations in the region.

Demand for travel remains largely subdued due to the ongoing uncertainty about the pandemic and low confidence. Data on international tourism expenditure continues to “reflect very weak demand for outbound travel,” says UNWTO, though it does identify that in several large markets such as the United States, Germany and Italy there was a small uptick in spending in the months of Jul-2020 and Aug-2020.

While demand for international travel remains subdued, demand for domestic tourism continues to recover in several large markets, it acknowledges. In China, some 637 million domestic trips (about 80% the level of 2019) were recorded during the eight-day Golden Week holiday which began at the start of Oct-2020 and spent around USD69.5 billion according to data from the Ministry of Culture and Tourism of China, notes UNWTO. In Russia, domestic seat capacity fully recovered to levels of 2019 and grew +9% in Aug-2020, reflecting strong appetite for domestic travel, it adds.

Prospects remain weak amid increased number of cases, travel restrictions and low confidence and based on latest trends. “The outlook is still highly uncertain and volatile as new cases of COVID-19 continue to be reported worldwide, UNWTO says in the latest World Tourism Barometer. It forecasts an estimated -75% decrease in international arrivals for Sep-2020 with a drop of close to -70% is projected for the whole of 2020.

Confidence in global tourism continued to hit record lows in the period May-2020 to Aug-2020, according to the latest UNWTO Confidence Index survey. On a scale of 0 to 200, the UNWTO panel of tourism experts rated the period with a score of just 22. An overwhelming majority (93%) of respondents evaluated the period as much worse (69%) or worse (24%) than expected.

Expectations also remain weak for the period Sep-2020 through Dec-2020. UNWTO experts rated prospects with a score of 34, reflecting no major change in confidence levels for the final four months of the year.

The panel of experts foresees a rebound in international tourism in 2021, mostly in the third quarter of the year. However, around 20% of experts suggest the rebound could occur only in 2022. Most experts do not see a return to pre-pandemic 2019 levels happening before 2023.

By regions, the largest share of experts pointing to a return to 2019 levels in 2023 or later are in Europe (74%) the Americas (71%) and Asia and the Pacific (66%). In Africa and the Middle East this share is 60% and 50% respectively. Half of respondents from the Middle East and 40% from Africa expect the recovery to 2019 levels to take place by 2022.

Travel restrictions are seen as the main barrier standing in the way of the recovery of international tourism, along with slow virus containment and low consumer confidence. The lack of coordinated response among countries to ensure harmonised protocols and coordinated restrictions, as well as the deteriorating economic environment were also identified by experts as important obstacles for recovery.