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Impact Of the Covid-19 Pandemic on Travel and Tourism Industry

Q5. “In the aftermath of the COVID-19 pandemic, critically evaluate the impact that the travel and tourism industry could have on the global economic recovery”.

From the kingdoms of classical times to the present day globalized economy, pandemics have afflicted all, leaving behind profound impacts on the society as well as the economy. Whether it was Great Bubonic plague or the SARS epidemic, pathogens have cruelly depredated human life, wealth, and happiness. Today, as the world reels under the panic ushered-in by the Coronavirus outbreak, declared a ‘global pandemic’ by the WHO, it becomes imperative to gauge the extent of its impacts on the global economy and deliberate upon the policy initiatives that should be taken at the moment to cushion the economy from its consequences. This public health emergency has already had grave repercussions on businesses and travel. China’s factory shutdowns have led to the sharpest plunge in Chinese production in the past three decades, thereby disrupting global supply chains. China’s exports of finished and unfinished goods have fallen by a staggering 17.5% in Jan-Feb 2020 thereby causing a massive slump in production activities world over (Chinazzi, 2020). As per a report of the UN Conference on Trade and Development, the slowdown in manufacturing in China due to COVID-19 could cause a $50bn disruption in international trade. Given that the world’s second-largest economy is China; a slowdown in the Chinese economy doesn’t augur well for the global economy either.

With “social distance” being the only way to portion out countries’ sparse healthcare facilities and financial resources among citizens while ensuring their survival, almost any industry that requires its consumers to step outside the safety of their homes and into the danger of human contact has taken a severe blow. The travel, tourism, hospitality, manufacturing (of non-essential commodities), restaurant and theatre industries have almost come to a standstill, while the education and retail industries are in an earnest attempt to stagger along through a shift to online delivery of education and products respectively. As various countries place travel restrictions, the global aviation industry and the hospitality sector would have to deal with a massive fall in their revenues. The International Air Transport Association has predicted a revenue loss of $63bn to $113bn for the aviation industry, in 2020-21. Consumers are barely spending on restaurants, travel, movies etcetera; which foretells a drastic drop in consumption expenditure, an important determiner of the Gross Domestic Product (Gössling, Scott, & Hall, 2020). The combined impact of such a decline in trade, investment expenditure, and consumption expenditure all over the world, along with increased spending on public health and declining revenues from public enterprises would severely slow down the global economy and widen the fiscal deficit, thereby aggravating the already existing economic crisis.

The long-drawn impact of COVID-19 on the world economy will depend on the decisions made in the face of the crisis- Will we be able to address the stark inequalities of the time, which will only worsen in the aftermath of the crisis? Will we choose the path of citizen empowerment or totalitarian surveillance which once legitimized by this emergency, may outlive it and become the order of the day? Will we now move to closed economies of nationalist isolation, or try to overcome this crisis through global cooperation and solidarity- the sharing of beneficial technologies, authentic information, and trained medical personnel to save thousands of lives and trillions in terms of economic value? At this moment, although various economies have slashed interest rates to near zero, we require a combination of growth enhancement measures, tax breaks, and generous cash handouts for the poor, special purpose loans to companies facing a liquidity crunch and an immediate enhancement of medical facilities to cater to the rising victims of the contagion.

Tourism Industry, which accounts for 10 per cent of global GDP – discovers itself in a peculiar state to aid put the global economy back on its feet, once the pandemic has passed, which is at the moment seems to be standstill due to coronavirus outbreak. The United Nations World Travel Organization (UNWTO) is meticulously analyzing the novel COVID-19 outbreak while working together with sundry other UN agencies to alleviate its impact. This kind of adverse impact on the tourism industry has never ever seen in the history before the COVID-19 outbreak, says Zurab Pololikashvili, UNWTO Secretary-General, in a meeting with Global Tourism Agencies held at UNWTO’s headquarter at Madrid. Questions like what mobility will look like when people will emerge from quarantine have been discussed over the meeting.

Travel and Tourism is the industry which takes into the employment of one in 10 members of the workforce globally and also boasts credentials for resilience in the course of 2008-2009 financial crises and the 2003 SARS outbreak, which showcases that the industry will again bloom and substantially contribute towards the future global economy recovery. The travel and tourism sector is expecting to provide more employment to the people in order to bounce back and to escalate economic growth that will surely aid the entire communities and countries to recover from COVID-19 outbreak, says Zurab Pololiksashvili. The key to ensuring that the tourism can amply contribute to a broader economic and social recovery is the political and financial commitments, thus UNWTO calls for monetary and parliamentary aid for the travel sector and for the sectors to be incorporated in wider strategies and actions for recovery.

For the time being, we have to find the limits of our endurance and be poised, the UNWTO chief said. By not going out and being at home while spending more time with our families, we can travel tomorrow which in return will again support jobs, commemorate cultures and encourage a global friendship amongst countries. To put that in perspective, international tourist arrivals were dropped by 4 per cent in 2009 due to the impact of the global financial crisis on the travel and tourism industry whilst the 2003 SARS pandemic led to a drop of just 0.4 per cent. Rightly estimated by The World Travel and Tourism Council (WTTC), up to 75 million jobs associated with tourism are exposed to danger with the Asia Pacific locations predicted to be hit hardest with up to 49 million jobs are at immediate risk. Moreover, in response to the COVID-19 pandemic, 96 per cent of all the destinations worldwide have put tourism prohibitions. Around 90 destinations have shut their boundaries to travellers in whole or in part, while a further 44 are shut to their travellers depending on their country of origin.

In consideration of the foregoing, given the uncertainties of how the crisis will proceed, UNWTO stresses that predictions should be handled with attentiveness and that contemporaneous projections may well require to be amended. The UN organization based in Montreal announced this week at the International Organization (ICAO) that, according to preliminary projections, the novel COVID-19 epidemic would witness airline passenger count fall by 503 million to 607 million in the first quarter of 2020 vis-a-vis to the original predictions for the year. ICAO has also fostered national governments to ensure that the flights aimed for repatriation on their foreign nationals and other qualified persons are effectively allowed for entry, departure, and transit. The Coronavirus outbreak is a major challenge not just for the tour and travel sector but also for the entire world, Zurab Pololiksashvili a little while told in an interview conducted by UN News. He said “I think the economy should recover swiftly, but …. Because this is not a casual economic recession, but an epidemic recession. So, I think the recovery should be very quick and I am still optimistic”.

The crux is, even though the virus may not have as devastating an impact in terms of human lives claimed as compared to its predecessors like the Black Death, the steps to contain it will cause a massive economic slowdown and the longer the ‘shutdown period’ remains, worse would be the impact of this pandemonium on the global economy. However, in the short term, with discretionary spending witnessing a steep decline the world over, recessionary trends seem imminent. With the excessive uncertainty surrounding all sectors of around 198 affected economies, it is almost impossible to accurately forecast the GDP decline due to this crisis. However, according to Harvard Business Review, the most likely scenario is that of a V-shaped recovery where growth eventually rebounds- as was the case after the previous pandemic- induced recessions of SARS, Hong Kong Flu, and Spanish Flu. With that said, Humanity has gone through tougher challenges before- wars, famines, catastrophes, etc. However, global solidarity in the face of adversities has helped it bounce back with greater vitality. What lies ahead is still uncertain, but collaborative steps at the international level are quintessential to allay the fears of mankind and inject it with the courage required to overcome these hard times. As the saying goes “Just because the economy is down doesn’t mean you put your-spirits down as well!”

Q2: Critically evaluate the ten most important issues facing the global travel and tourism industry in 2021

The travel and tourism industry developed international influence via a simple process known as Globalisation. As such, they both share a relationship and are dependent on each other. Although Globalisation has resulted in lowered prices and increased trade, there are many negative effects of Globalisation on the travel and tourism industry as well. The competition has become such that there are cheaper competitors for business owners. Countries that are in the developing phase face the hardest impact of such cheaper competitions that exist in different countries and markets (Alsarayreh, 2018). The goods that require more capital intensive techniques are imported at lesser prices from outside. This means if a country manufactures a particular capital-intensive good, then there are high chances that it will lose the market share as traders will import it at an affordable price. Hence, the biggest advantage of less-developed countries is their cheap workforce.

Consumer awareness has been a slow process in the context of travel and tourism. And this slow process is the reason for a negative impact on this industry. In the upcoming months, it could force many businesses to carefully rework their travel and tourism policies. And the outcome of this challenge could be the tourism businesses turning their focus more towards strategy redesigning and their management. In lieu of the same, awakening a sense of responsibilities among tourists is also a huge challenge. For example, plastics and littering. If people continue to realise their sense of responsibilities at such a slow rate, then this will further impact the behaviour leading to critical environmental issues. In the upcoming months, if tourists are able to see in advance what the air quality of their destination is, then this will certainly become an influence on their purchase decision. Along with this, the management will also face the same challenge and might have to force changes in their processes.

Climate change was earlier considered as only a threat but since people have not paid much attention, the threat turned into a reality today. The biggest challenges concerned with climate change are finding quicker ways to reduce greenhouse gases and the ever-rising temperatures. For example, coastal tourism has been severely impacted by climate change. The major challenges that it will be facing in the upcoming months involve increasing sea level, erosion of beach and storm surges (Engelbrecht, Spencer, & Bijl, 2018). Coastal tourism globally will also be facing a change in the pattern and amount of rainfall and other environmental changes such as acidification. Such changes in the rainfall might lead to disruptive floods and here the challenge lies in finding out increased standards for drainage capacity. Climate change could also lead to certain impacts on particular areas such as bushfire risks and more. The impacts will vary and so will be the adaptive measures to be taken.

Safety and security is the fourth challenge for the travel and tourism sector. Although they the world safety and security issues have gained attention and importance in the last few years, a few challenges still remain unaddressed. In comparison to certain events such as natural disasters and terrorist attacks, safety and security have significantly decreased. Most travellers and tourists get influenced by a number of factors. In the upcoming months, the travel and tourism industry must work towards the major factors giving rise to numerous security issues (Gallagher & Huveneers, 2018). Additionally, the people working in this industry need to find ways of letting tourists understand their sole responsibilities. In the age of global tourism, there are many security issues that cannot be divided into smaller units, hence their indivisibility remains. This is a multi-dimensional challenge and has a wide range of elements attached to itself such as sanitation, consumer protection, and more. Each of these must be considered when resolving security issues and challenges.

Natural disasters are a major challenge for the tourism industry. They lead to cancellation of flights, damaged tourist attractions, and weakened transport system at the affected areas. There are many micro-challenges associated with natural disasters. They become an expensive affair as their intensity increases. The tourism and travel industry must consider choosing sites that have the least chances of occurrence of natural disasters. Businesses need to figure out ways to maintain sustainability such as by completely avoiding the creation of tourism in areas which are highly vulnerable to natural disasters (Jørgensen & McKercher, 2019). Another challenge that lies here is having a full-proof disaster management plan ready in place. If the travel and tourism industry does not repair their environmental problems on time, they might not recover from environmental disasters. Many areas that were once inhabited are now accessible for tourist attractions. This has led to an increase in both local tourism and the impact of natural calamity. The challenge here is to keep the former the same while reducing the latter.

Pandemic and epidemic make it really hard to understand what will happen in the near future. Such viruses have the potential to infect billions of people and wipe out millions. An epidemic is a situation in which the virus or disease is actively spreading and has grown out of control. It suddenly erupts and is described as above than normally expected. Whereas a pandemic is a situation in which the virus or disease has spread to a large geographic-level and affected people across countries. Some touring businesses had declared themselves bankrupt and lifeless. The most recent example is COVID-19 that has till date affected three million people across the globe. The biggest challenges faced by the industry are severally impacted inbound, domestic, and outbound tourism. All the verticals received a critical blow and the whole chain including hotels and restaurants and kids and family entertainment have been hit.

Cybercrime has always been a concern for the travel and tourism industry. Businesses often report that cybercriminals steal extremely confidential and valuable data. This includes the data of their customers, staff, and stakeholders. Travel companies use such data for gaining insights into the traveller’s needs and preferences and behavior. With the help of those results, they can better target them for maximising sales. Data breaching thus remains a challenge for the travel and tourism industry (Mhanna, Blake, & Jones, 2017). A few examples of the most serious hacks are breaching and stealing full travel detail of customers, personal and financial information, social media accounts, email accounts, and more. Such cybercrimes often lead to damage to the tourism industry in terms of reputation and financial. The industry will then also have to face the media, which may or may not reflect the true picture of the cybercrime. Businesses are left with lack of time and insufficient accurate information. This eventually leads to a huge loss. Moreover, any potential customer may start to feel vulnerable.

Technology has transformed and contributed to the development of the travel and tourism industry. Ever since its existence, both tourist and the industry have been able to easily connect with each other. Undoubtedly, there are many challenges to technology. Business owners will have to keep up with the cost of maintenance and follow up. The competition is high as of today and a lot of investment is needed to set up a top-quality website. In spite of all this, the challenge remains whether or not people will visit the website and convert into customers. It is because of the existence of technology and competitors, a person may change his mind and decide to travel elsewhere (Raj, Griffin, & Korstanje, 2018). Cybercrime is also another challenge and has been discussed in the previous paragraph. There are now automated chat support systems that allow instant replies to customers based on their queries. This may become a challenge when a customer is unable to find a solution to his query.

Tourism simply refers to mutual interaction between the customer and the businesses. The challenge here is how the industry will maintain a balance between costs and benefits. In simpler words, travel businesses must be able to fulfil two elements. First, they should be able to make a profit out of serving customers and second, the customers must be able to enjoy the vacation with the money they spend (Veiga, 2017). Another challenge here is to ensure that tourist areas do not get over-exploited by travellers. Hence, the promotion of tourism must be kept under control. There will certainly be new projects and the stakeholders should question regarding the profits and benefits for all the parties involved.

Global tourism could face a challenge when it is not able to adapt itself with respect to its development. The demography keeps on changing and the industry must be able to modify and develop internally. It should avoid both under-capacity and over-capacity. Economic uncertainty will become the biggest challenge where the industry will have to find ways to introduce technologies are energy efficient. The travel and tourism industry will have to collect huge chunks of data and utilise it to identify the factors responsible for uncertainties in the economy. Moreover, finding a constant challenge for the industry to find efficient work processes that will enable getting the job done even in tight budgets.

References for Impact of Covid-19 Pandemic Assignment

Alsarayreh, M. N. (2018). Challenges Facing the Organization of Tourism Programs to Jordan. International Journal of Business and Management, 13(11). Available at: https://pdfs.semanticscholar.org/6c70/7912e6061f24cc296311f4c8e4e72ac56190.pdf

Chinazzi, M., Davis, J. T., Ajelli, M., Gioannini, C., Litvinova, M., Merler, S., ... & Viboud, C. (2020). The effect of travel restrictions on the spread of the 2019 novel coronavirus (COVID-19) outbreak. Science, 368(6489), 395-400. Available at: https://science.sciencemag.org/content/368/6489/395.abstract

Engelbrecht, M., Spencer, J., & Van Der Bijl, A. (2018, March). Challenges Facing the National Certificate (Vocational) Tourism Programme in the Western Cape. In International Conference on Tourism Research (pp. 229-XI). Academic Conferences International Limited. Available at: http://search.proquest.com/openview/27e34bbeb36d01b4fec8d8ca398b0f7d/1?pq-origsite=gscholar&cbl=4451210

Gallagher, A. J., & Huveneers, C. P. (2018). Emerging challenges to shark-diving tourism. Marine Policy, 96, 9-12. Available at: https://www.sciencedirect.com/science/article/pii/S0308597X18302264

Gössling, S., Scott, D., & Hall, C. M. (2020). Pandemics, tourism and global change: a rapid assessment of COVID-19. Journal of Sustainable Tourism, 1-20. Available at: https://www.tandfonline.com/doi/abs/10.1080/09669582.2020.1758708

Jørgensen, M. T., & McKercher, B. (2019). Sustainability and integration–the principal challenges to tourism and tourism research. Journal of Travel & Tourism Marketing, 36(8), 905-916. Available at: https://www.tandfonline.com/doi/abs/10.1080/10548408.2019.1657054

Mhanna, R., Blake, A., & Jones, I. (2017). Challenges facing immediate tourism leveraging: Evidence from the London 2012 Olympic games. Managing Sport and Leisure, 22(2), 147-165. Available at: https://www.tandfonline.com/doi/abs/10.1080/23750472.2017.1412269

Raj, R., Griffin, K., & Korstanje, M. E. (2018). 1 Risk and Safety Challenges Facing Religious Tourism–An Introduction. Risk and Safety Challenges for Religious Tourism and Events, 1. 

Veiga, C., Santos, M. C., Águas, P., & Santos, J. A. C. (2017). Are millennials transforming global tourism? Challenges for destinations and companies. Worldwide Hospitality and

Tourism Themes. Available at: https://www.emerald.com/insight/content/doi/10.1108/WHATT-09-2017-0047/full/html

Remember, at the center of any academic work, lies clarity and evidence. Should you need further assistance, do look up to our Travel and Tourism Assignment Help

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