Impact assessment of the COVID-19 outbreak on international tourism

Impact assessment of the COVID-19 outbreak on international tourism

Updated October 2020

International tourist arrivals declined 70% in January-August 2020 amid COVID-19

  • The world is facing an unprecedented global health, social and economic emergency as a result of the COVID-19 pandemic.
  • Travel and tourism is among the most affected sectors with a massive fall of international demand amid global travel restrictions including many borders fully closed, to contain the virus.
  • According to the latest issue of the UNWTO World Tourism Barometer, international tourist arrivals (overnight visitors) declined 70% in January-August 2020 over the same period of last year, amid global travel restrictions including many borders fully closed, to contain the ongoing COVID-19 pandemic.
  • This represents 700 million fewer international tourist arrivals compared to the same period in 2019, and translates into a loss of US$ 730 billion in export revenues from international tourism, more than 8 times the loss in 2009 under the impact of the global economic crisis.
  • International arrivals plunged 81% in July and 79% in August, traditionally the two busiest months of the year and the peak of the Northern Hemisphere summer season.
  • By regions, Asia and the Pacific, the first region to suffer the impact of the pandemic, saw a 79% decrease in arrivals in January-August 2020. Africa and the Middle East both recorded a 69% drop this eight-month period, while Europe saw a 68% decline and the Americas 65%.
  • This is by far the worst result in the historical series of international tourism since 1950 and puts an abrupt end to a 10-year period of sustained growth since the 2009 financial crisis.
  • Data on international tourism expenditure continues to reflect very weak demand for outbound travel, though in several large markets such as the United States, Germany and Italy there is a small uptick in spending in the months of July and August.
  • While demand for international travel remains subdued, domestic tourism is strengthening recovery in several large markets such as China and Russia.
  • Prospects for the remainder of 2020 remain weak amid increased number of cases, travel restrictions and low confidence.
  • Current trends point to a decline in international arrivals closer to 70% for the whole of 2020.
  • Considerable challenges remain ahead, starting with the unknown duration of the pandemic and travel restrictions, in a context of global economic recession. Countries around the world are implementing a wide range of measures to mitigate the impact of the COVID-19 outbreak and to stimulate the recovery of the tourism sector.

International Tourist Arrivals by Region

January-October 2020

International Tourist Arrivals by Region in January-October 2020

The UNWTO Confidence Index remains at record lows

The UNWTO Confidence Index remains at record lows. Most UNWTO Panel Experts expect a rebound in international tourism by the third quarter of 2021 and a return to pre-pandemic 2019 levels not before 2023

The UNWTO Panel of Experts consider travel restrictions as the main barrier weighing on the recovery of international tourism, along with slow virus containment and low consumer confidence.

According to Panel Experts from around the world, domestic demand would recover faster than international demand.

UNWTO Panel of Experts October Edition

Return to 2019 levels expected by 2023

UNWTO conducted a global survey among its UNWTO Panel of Tourism Experts on the impact of COVID-19 on tourism and the expected time of recovery. The survey was conducted during the first week of October 2020 and those are the results:

When do you expect a rebound in international tourism in your country?

A majority of experts sees a rebound in international tourism in 2021, in particular by the third quarter 2021, while around 20% expects it to occur only in 2022.

What are the main factors weighing on the recovery of international tourism?

Experts consider travel restrictions as the main barrier weighing on the recovery of international tourism, along with slow virus containment and low consumer confidence.

When do you expect international tourism to return to pre-pandemic 2019 levels in your country?

Most experts do not see a return to pre-pandemic 2019 levels happening before 2023.

Is domestic tourism driving the recovery in your destination?

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.  Respondents from Asia and the Pacific were the most positive regarding the contribution of domestic tourism to the recovery of destinations.

UNWTO Confidence Index and survey:

UNWTO conducts a Panel of Tourism Experts’ survey to track global tourism performance and business sentiment every four months. In the most recent survey, additional questions were made to the UNWTO Panel of Tourism Experts on the impact of COVID-19 on tourism and the expected time of recovery. The survey was conducted during the first week of October 2020 and follows a prior survey conducted in July.

To discover more interactive data on the recovery of tourism, visit the UNWTO Recovery Tracker

 

Travel Restrictions

According to UNWTO’s Report on COVID – 19 Related Travel Restrictions, as of 1 September, a total of 115 destinations (53% of all destinations worldwide) have eased travel restrictions, an increase of 28 since 19 July. Of these, two have lifted all restrictions, while the remaining 113 continue to have certain restrictive measures in place. 93 destinations (43% of all destinations worldwide) keep their borders completely closed for international tourism. This is a decrease of 22 destinations compared to 19 July 2020.

Looking ahead: Forward-looking scenarios 2020

  • UNWTO published three scenarios in May 2020 indicating declines of 58% to 78% in international tourist arrivals in 2020, based on the gradual opening of national borders and lifting of travel restrictions on different dates (The scenarios are not forecasts and should not be interpreted as such).
  • Considering that international tourist arrivals declined an estimated 85% in July and 80% in August 2020 based on currently available information and the slow and irregular lifting of travel restrictions, international tourism results are currently between Scenarios 1 (-58%) and 2 (-70%).
  • International travel came to a near complete halt after the shutdown of most international borders in late March, with arrivals plunging 97% in April and 96% in May, according to data reported by destinations. The curve seems to have bottomed out during those months before edging up slightly to -93% in June and an estimated -85% in July.
  • Scenario 1 now seems unlikely despite the lifting of travel restrictions in some countries in June and July, as this was mostly limited to Europe and proved to be short-lived. In July and August several European destinations reintroduced quarantines and other measures in response to growing cases of Covid-19. By mid-September these restrictions had not been lifted in the most part, and major international tourist destinations in other parts of the world such as China and the United States remained closed.
Estimated impact

 

Extended scenarios for 2021-2024

  • In the outlook beyond 2020, the above scenarios were extended into the future based on the latest information on tourism trends and travel conditions, economic forecasts and historical data on previous crises.
  • International arrivals are expected to bounce back from different lows depending on different year-end levels defined by the 2020 scenarios. The extended scenarios are presented in terms of yearly totals, not growth.
  • International tourism could recover the levels of 2019 in a period of 2½ to 4 years based on a variety of factors including 1) the rate of improvement of traveler confidence, mostly dependent on perceived safety and the evolution of the pandemic, 2) the gradual elimination of travel restrictions and 3) the prevailing economic conditions.
  • These recovery periods exceed in most part those seen in previous crises, both globally (11 to 19 months) and for the specific regions most hardly hit (1 to 3½ years). As described in the May 2020 UNWTO World Tourism Barometer, it took eleven months for international arrivals to regain pre-crisis levels after the SARS epidemic of 2003, 14 months after the September 11th attacks of 2001, and 19 months after the global economic crisis of 2009. In the most impacted regions it took 1 to 3½ years for arrivals to climb back to the levels before the respective crises.
  • All scenarios for 2021-2024 point to a strong rebound in the year 2021 based on the assumption of a reversal of the evolution of the pandemic, significant improvement in traveler confidence and major lifting of travel restrictions by the middle of the year. The expected rebound is a consequence of the large pent-up demand following the unprecedented global lockdown and months of closed borders and travel bans.
Extended scenarios for 2021-2024

 

Arrivals could drop 58% to 78% depending on pace of normalization

International tourist arrivals, 2000-2019 and scenarios for 2020 (% change)

International tourist arrivals, 2000-2019 and scenarios for 2020 (% change)

Largest blow to tourism ever could slash 1 billion arrivals

International tourist arrivals, 2000-2019 and scenarios for 2020 (millions)

International tourist arrivals, 2000-2019 and scenarios for 2020 (millions)

International tourism receipts could plunge by US$ 1 trillion

International tourism receipts, 2000-2019 and scenarios for 2020 (U$ billion)

International tourism receipts, 2000-2019 and scenarios for 2020 (U$ billion)

Summary of Potential Impacts in 2020

850 million to 1.1 billion fewer international tourist arrivals

US$ 910 billion to US$ 1.2 trillion loss in export revenues from tourism

100 to 120 million direct tourism jobs at risk

Employment in accommodation and food services is at high risk, more than half workers are women

Workers in sector most at risk

Workers in sector most at risk

 

Key Considerations

  • Pandemic

    how long the pandemic will last and when a treatment or vaccine will become available?

  • Lifting of travel restrictions and lockdown measures

    when will countries start easing restrictions and how?
    how will social distancing rules impact supply?

  • Consumer & Business confidence

    how long it will take consumers to reassume travel?
    how will travel behavior change?

  • Economic impact

    how deep and how long will the global recession be?
    what will be consumers’ discretionary spending decisions?

  • Governments Measures

    how do government measures support tourism?

STRENGHTS

  • Proven resilience of tourism in past crises
  • Domestic tourism can be a buffer
  • Adaptation capacity: safety and hygiene protocols, trips closer to home, value for money, responsible consumer behavior 
  • Government support to the sector

WEAKNESSES

  • Segments potentially affected are also high spenders: international, long haul, business travel and events
  • Major disruption in airline industry with airline failures and concentration  
  • Lack of references in previous downturns
  • Perception of travel as a risk 
  • Low levels of demand when restarting tourism due to social distancing
INTERNAL FACTORS

OPPORTUNITIES

  • Re-think business model
  • Innovation and digitalization
  • Sustainability and sustainable-oriented segments (rural, nature, health)
  • De-escalation phases initiated by several countries toward the ‘new normal‘
  • Progress in adaptation plans in destinations & companies

THREATS

  • Economic environment: world recession, rising unemployment and jobs at risk, closure of business mainly SMEs, disposable income, uncertainty weighing on consumer and business confidence
  • Uncertain length of pandemic (including resurgence) and vaccine unavailability
  • Extent of lockdowns and travel restrictions
  • Unknown form of the "new normal"
EXTERNAL FACTORS
POSITIVE NEGATIVE