COVID-19 impact-One million jobs being lost every day in travel and tourism industry

Travel and Tourism industry expected to shrink 50% with 75 million lost jobs

Travel and tourism industry has been badly affected by the spread of COVID-19 pandemic. Coronavirus crisis has hit travel and tourism industry hardest.  Travel restrictions and lock downs have severely affected this sector of world economy.

It might take months or a year before this sector return to normal activities. But the recovery might take bit longer. There are many potential tourist and travelers around the world who will not be confident to travel in these circumstances. Due to the coronavirus, people around the world have canceled their travel plans.

Governments and health officials have warned the public to avoid travelling in cruise ships and taking long flights. Major global events like conferences, trade shows including world exhibition in Dubai and Olympics in Japan have been canceled or postponed. These events attract millions of people around the world.

 As a result, many businesses in the travel and tourism industry are likely to find themselves in jeopardy. According to World Travel & Tourism Council (WTTC), One million jobs are being lost every day in the travel and tourism sector due to the coronavirus pandemic.

Gloria Guevara, president & chief executive of World Travel &Tourism Council (WTTC) in her statement said that “While the priority for governments is to keep people safe, this global health catastrophe means a million people a day in the travel & tourism industry alone are losing their jobs and facing potential ruin due to the disastrous impact of the coronavirus pandemic.

Businesses large and small are being forced to rip up their three-year plans and focus on a three-month fight for survival on a daily basis, while people’s jobs are wiped out hour by hour. We fear this situation will only deteriorate unless more action is taken immediately by governments to address it.

If urgent action is not taken within the next few days, the travel & tourism sector faces an economic meltdown from which it will struggle to recover and plunge millions of people dependent upon it for their livelihoods into debt,” she said.

Not only will this have an enormous negative impact on major businesses in the travel and tourism sector around the world, the ‘domino effect’ will also result in massive job losses across the entire supply chain, hitting employees and those in self-employment.”

Coronavirus, the biggest challenge to the global economy since the 2008 financial crisis, has disrupted trade, the travel industry and rattled investors. At least $17 trillion  has been wiped from stock markets worldwide.

The WTTC forecast that travel restrictions and other measures put in place to stop the spread of the pandemic will mean a $2.1 trillion hit to global GDP in terms of lost tourism revenue in 2020.

Non-profit organisation “the Conversation” conducted a survey during the third week of March with more than 2,000 travelers from 28 countries. Their study showed that 63.8% of the travelers will reduce their travel plans in the next 12 months. More than half canceled their business travel immediately due to the coronavirus.

Results of their study predict that, compared to last year, the travel industry, which includes businesses such as airlines, hotels and restaurants, will shrink by 50% in 2020, which would mean a significant loss of jobs and revenue.

The number of international travelers could shrink from 1.4 billion to fewer than 1 billion people. That would be the first time the international traveler number has fallen that low since 2015.

The travel industry has faced many challenges in the past, including the 9/11 attacks and the Great Recession, but none are similar in magnitude to the coronavirus. For example, the travel industry shrank by 31.6% after the 9/11 attacks.  In the U.S, the travel and tourism industry generated $1.6 trillion   in economic output.

The World Travel and Tourism Council, which represents the global private sector of Travel & Tourism based in London, predicts up to 75 million jobs in the global travel industry could be lost.

The latest job risk figure is 50 per cent higher than the organisation’s previous estimate less than two weeks ago. As many as a million jobs are being lost in the travel and tourism sector every day.

WTTC announced a three-point plan for governments to tackle the problem including protecting the salaries, income and jobs of people who are at risk and extending interest free loans to provide liquidity to large and small travel and tourism businesses. It also suggested waiving or removing all dues, taxes or fiscal charges for 12 months that affect the cash flow of businesses.

“While some governments have been quick to respond with promises of help, the majority of businesses still have no idea how to access these potentially life-saving loans and tax breaks," added Ms Guevara.

Small and medium sized businesses at every level within travel and tourism, such as tour operators, travel agents and sole-traders, are especially vulnerable.

Asia-Pacific is expected to be hardest hit, with up to 49 million jobs at risk throughout the region, representing a loss of nearly $800 billion to travel and tourism GDP. In Europe, the figure is expected to be 10 million jobs, totaling a loss of nearly $552 billion.

The Americas will also be struck hard by this crisis, with the US, Canada and Mexico expected to lose up to $570 billion combined, with nearly seven million jobs at risk. Brazil, the UK, Italy, Germany, France, Japan, Indonesia and India were other countries named by WTTC where the problem could be severe.

 In Europe, Germany is set to be the most affected country with almost 1.6 million jobs at risk, followed by Russia with an estimated 1.1 million potential losses. Italy and the UK are each facing about a million lost jobs in the sector.

The Middle East, on the other hand, faces unemployment of about 1.8 million and a GDP drop of up to $65 billion in the regional economy due to the global health crisis.

Travel and tourism, which contributes 10.4 per cent of the global GDP, is directly responsible for generating one in every 10 jobs, and has outpaced the growth of the world economy for eight successive years.

                                                        Rukhsana Manzoor Deputy Editor