Threatening the lives and livelihood of everyone across the world, the novel coronavirus has affected the whole world. The impact has already started to surface in several sectors like education, agriculture, real estate, stocks and so on. Of them, the hospitality industry is threatened the most. Small and mega tourism businesses are facing numerous difficulties. By the end of 2019, the global tourism industry had seen a record year for travel, now just a few months later, it could take even years for the industry to recover from all the losses. Nepal, where tourism was emerging as a leading economic activity, has also been hit hard by the global crisis, and it will take years to recover.
The travel and tourism sector carries one in 10 of the world’s job. According to the World Travel and Tourism Council, the sector is estimated to lose 100 million jobs in 2020, overwhelmingly impacting countries in Asia. This will lead to a decline of 2.7 trillion dollars in the world’s travel and tourism GDP. It is estimated that the travel demand is unlikely to return to its normal pace until 2023.
Income is not distributed to communities that need the most as there are no travellers buying tourism products and local goods. International Air Transport Association (IATA) has projected that the passenger revenue for airlines was reduced by 314 billion dollars this year, which is a 55% drop as of 2019. As per flight24raddar.com, commercial flights are down to 63% in June compared to 2019. The aeroplanes are parked in hangars or are no longer in operation due to restrictions caused because of Covid-19.
By regions, Asia Pacific has been the first region to suffer the impact of the pandemic as it saw a 60% decrease in arrivals in January 2020. Europe recorded a second strongest decline with 58% fewer arrivals followed by the Middle East (52%), the Americas and Africa, both by 47%.
Covid-19 has a domino effect. It is smashing down the economy from the micro to the macro levels. Tourism and aviation industry has faced a great problem due to the global health crisis. One of the immediate problems that appeared is: people who were travelling or were about to travel got stuck on their destination and faced very difficult situations. Returning to their home country was also a long ordeal due to travel restrictions.
Almost all countries around the globe have experienced a fall in the tourism sector due to Covid-19. Let’s take one small developing country, Nepal, as an example. Though the country had planned to mark the year 2020 as the Visit Nepal Year, it was later called off due to the Covid-19 crisis.
According to the data published by UNWTO, Nepal received 603,000 tourists in 2010, 940,000 tourists in 2017, 1,173,000 tourists in 2018 and 1,197,000 tourists in 2019. That trend could not continue this year. As eight months of the year have been over, Nepal has suffered the international tourist arrival downfall by 48%. Some months did not record even a single foreign tourist arrival this year.
The number of tourists arriving in Nepal has a direct impact of the country’s economy. Nepal had earned USD 344 million in 2010, USD 639 million in 2017, USD 641 million in 2018 and USD 701 million in 2019. The increasing trend is sure to get a setback this year; the first quarter already saw a 27.7 per cent decline. Getting back to the old pace is fraught with challenges.
The Covid-19 pandemic is far more than a health crisis. The pandemic has already challenged the world’s economy and the healthcare system. The resurgence of tourism may take longer than expected. The extent of the impact will depend on Covid-19 progression and a particular country’s ability to cope. Thus, there is a profound need for all stakeholders to take a farsighted view and plan how tourism can prosper in near future.
Various countries and governments are making efforts to plan new forms of tourism and invest significantly in the sector as a means to boost their economy in the long-term. The government of Nepal also needs to have an efficient plan ready to roll out as soon as the rate of infection comes down.
Silwal is a tourism entrepreneur and teacher.