Impact assessment of the COVID-19 outbreak on international tourism

Impact assessment of the COVID-19 outbreak on international tourism

Updated December 2020

International tourism expected to decline over 70% in 2020, back to levels of 30 years ago

  • 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) fell by 72% in January-October 2020 over the same period last year, curbed by slow virus containment, low traveller confidence and important restrictions on travel still in place, due to the COVID-19 pandemic
  • The decline in the first ten months of the year represents 900 million fewer international tourist arrivals compared to the same period in 2019, and translates into a loss of US$ 935 billion in export revenues from international tourism, more than 10 times the loss in 2009 under the impact of the global economic crisis.
  • Asia and the Pacific saw an 82% decrease in arrivals in January-October 2020. The Middle East recorded a 73% decline, while Africa saw a 69% drop this ten-month period. International arrivals in both Europe and the Americas declined by 68%.
  • Data on international tourism expenditure continues to reflect very weak demand for outbound travel. However, some large markets such as the United States, Germany and France have shown some shy signs of recovery in the recent months.
  • While demand for international travel remains subdued, domestic tourism continues to grow in several large markets such as China and Russia, where domestic air travel demand has mostly returned to pre-COVID levels.
  • Based on current trends, UNWTO expects international arrivals to decline by 70% to 75% for the whole of 2020. This would mean that international tourism could have returned to levels of 30 years ago.
  • The estimated decline in internationals tourism in 2020 is equivalent to a loss of about 1 billion arrivals and US$ 1.1 trillion in international tourism receipts. This plunge in international tourism could result in an estimated economic loss of over US$ 2 trillion in global GDP, more than 2% of the world’s GDP in 2019.
  • Looking ahead, the announcement and the roll-out of a vaccine are expected to gradually increase consumer confidence and contribute to ease travel restrictions.
  • UNWTO’s extended scenarios for 2021-2024 point to a rebound in international tourism by the second half of 2021. Nonetheless, a return to 2019 levels in terms of international arrivals could take 2½ to 4 years.

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

 

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).
  • International travel came to a nearly complete halt in late March 2020 after the shutdown of most international borders, with arrivals plunging 97% in April, 96% in May and 91% in June. Results then edged up slightly to -80% in July and -77% in August after some destinations gradually reopened their borders during the Northern Hemisphere summer season, particularly in Europe. However, as coronavirus cases surged again in some parts of the world, many destinations reintroduced or stiffened travel restrictions, including compulsory quarantines or other measures, resulting in an 80% drop in arrivals in September and 83% in October.
  • By early December most of these restrictions had not been lifted, though some destinations had shifted from a policy of complete closure to targeted restrictions. Still, other large destinations and source markets as well such as China remained completely closed to international travel. The latest data indicate that the year 2020 will end with an overall decline of 70% to 75% in international tourist arrivals, putting results between Scenarios 2 and 3.
Extended scenarios for 2021-2024

 

Scenarios for 2021-2024

  • In the outlook beyond 2020, international arrivals are expected to rebound in 2021, based on the assumption of a gradual reversal of the pandemic, the roll out of a COVID-19 vaccine, significant improvement in traveller confidence and major lifting of travel restrictions by the middle of the year. The expected rebound is also a consequence of the large pent-up demand after months of closed borders and travel bans. The extended scenarios presented here are in terms of yearly totals, not growth.
  • The rebound is expected to continue in 2022 as travel conditions normalize and the pandemic is contained globally. However, international tourism could still take 2½ to 4 years to return to 2019 levels. The recovery times for each scenario are summarized below:
    • Scenario 1: recovery in 2½ years (mid-2023)
    • Scenario 2: recovery in 3 years (end of 2023)
    • Scenario 3: recovery in 4 years (end of 2024)
International tourist arrivals, 2000-2019 and scenarios for 2020 (% change)

 

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