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Future Of Travel Industry Post-Covid19

The lubricant to the global economy

Photo by Frank Vessia on Unsplash

The Travel & Tourism industry comprising Accommodation, Travel, Transportation, and Entertainment contributes more than 8.2 trillion USD to the global economy. Asia accounts for almost 25% of the share of global receipts from travel & tourism. Over this decade, the tourism industry has witnessed massive growth fuelled and influenced by enhanced disposable income of families, change in lifestyle, increasing technological progress and improved connectivity.

Asia markets for Travel & Tourism

International arrivals to major tourism destinations in Asia are driven by visitors from European countries and China. In 2018, top 10 cities in terms of international visitor arrivals featured 7 cities from Asia. Bangkok topped the list not just in Asia but in the world. Others were Singapore, Tokyo, Hong Kong, Dubai, Seoul, and Shenzhen. Low-cost connectivity, tourism-friendly government policies including Visa regulations, and weak currencies against the US dollar or Euro have triggered this massive growth.

Other global destinations in the top 10 list were Paris, London, and New York. But the interesting thing to note here is that China, South Korea, and Japan are the 3 major source markets for all these global destinations, which directly suggests the growing economic strength of Asian countries on the global map. Outbound travel from China has grown a staggering 250% over the decade. 

Another large Asian country with more than a billion people, India has also seen consistent high growth year-on-year in its economy over the last 2 decades, which has influenced the consumer lifestyle trend, and it has clearly reflected on the outbound tourist departure which has seen greater than 9% growth over the decade. The United Nations World Tourism Organisation (UNWTO) estimates more than 50 million Indian tourist departures to global destinations by 2020. 

Asia’s travel and tourism industry offers a diverse portfolio of tourism products – leisure, MICE, cruises, adventure trekking & water sports, medical, wellness & spa, sports, eco-tourism, movie shoots, rural and religious tourism. India has been recognised as a destination for spiritual tourism for domestic and international tourists. India, and Thailand are also recognised as global destinations for Ayurveda and wellness tourism. 

As it stands today – Scenario amid Covid-19  

In Thailand, during March, the tourist arrivals dipped by 76%. Nothing more is required to describe the depressing sentiments in Thailand and in other major tourist destinations in South-east Asia such as Singapore, Hong Kong, Malaysia, Philippines, and Vietnam. 

Travel industry is in doldrums and there is no respite in sight. It’s highly unlikely that we shall see people in Asian countries resuming travel for leisure anytime soon. 

For most of the working middle and upper-middle class people, there will be other priorities to deal with and attend to before they would think of a vacation to spend on. It might not be until Nov 2020 that we would see some decent and visible domestic and outbound tourism activities happening anywhere in the world, including Asia. This is also on the premise that the virus is totally eliminated in each country and that we have some cure or vaccine available to provide immunity, well-being, and peace of mind to the traveller.

In many countries, tourism is one of the highest revenue earners and is also the highest employment provider. Every country will make immediate efforts to make their tourist destinations healthy and attractive to their own citizens and to the foreigners, as many large industries such as food & beverage, agriculture, cosmetics, art & craft, entertainment, promotional events, fashion & lifestyle, etc depend heavily on tourism. 

Many lives and livelihoods in some tourism dominated countries depend entirely on tourist arrivals. It is estimated that more than 50 million people in the tourism & travel sector are in danger of losing their jobs, temporary or permanent, due to the ongoing pandemic. There are some island nations that rely entirely on tourism to earn revenue and livelihood.

 All is not lost, however, as nobody wants to be locked down inside their homes. Interactions with various industry stakeholders in various prominent markets, such as Middle-east countries, Central Asian countries, Australia, New Zealand, and even Western European countries reveal that people are very keen to travel and go on vacation with friends and families as soon as they get a chance to. The more affected the country and its people are, the more the desire to cut loose and break the shackles. People in China want to travel to their favourite tourist destinations in 2020 itself, provided the airline industry and hotels support on connectivity, cost, and package deals 

There are positive indications amid the gloom, too. Bali’s provincial government has taken all precautions to ensure the virus is not spread locally and are hopeful that the island destination is opened to tourists by early June. It may sound highly optimistic as the Indonesian government is of the view that they should open borders only when the virus is totally eliminated. Bali is a hotspot of the global tourism industry and they shall soon be out to attract tourists from China, South Korea, Japan, and other source markets, into the land of Gods. Their largest source market, Australia, however is of the view that they shall not permit travel before 2021. So, it all depends on how each country’s government takes a stand on the crisis inflicted by the pandemic. 

Similarly, in Thailand, the number of new infected cases is declining. The Tourism Authority of Thailand is taking stock of the situation observing the daily developments, very closely knowing that the economy and job losses have to be taken care of as soon as possible. It is expected that the TAT and Thai Govt both will extend helping hands to the ailing Travel, Aviation and Hospitality sector to ensure Thailand looks safe, clean, and attractive once again. Thailand is also a premier destination in Asia for fairytale weddings, and the country will be keen to welcome hundreds and thousands of prospective destination wedding clients from all parts of the world. 

Way-ahead, 2021 and beyond

Post Covid-19, we shall see some major regulations being adopted by every country in terms of stating mandatory underlying requirements for health-check certifications and travel insurance for every tourists visiting their respective countries, On their part, every country will also demand from their tourism authorities to ensure every Guest houses, Home stays, Hotels, Resorts, Villas, Restaurants, Bars, and tourist attractions follow the necessary requirement of hygiene, sanitation, and cleanliness in their premises. So much so, these shall be standard norms to be mandatorily followed.

Large countries such as India where tourism is a USD 255 billion industry, or China where tourism is a USD 556 billion industry, are currently severely affected due to the pandemic but shall be working overtime to bring the injured economy back on track by investing in bettering their existing tourism infrastructure as millions of jobs can be lost due to the current crisis by the time travel restrictions are lifted.

Smaller but prominent tourism destinations in Asia and Europe shall also be looking at opening their borders to business and leisure travellers as they try to bring back their economy into a high productivity zone. Countries such as Vietnam, UAE, Singapore, Malaysia, Australia, Italy, Switzerland, France, Norway, Spain, and many others are greatly hurt due to loss of tourism business, although priority in these countries shall be to ensure their industrial manufacturing, and other commercial activities start as soon as possible. The rich and developed countries are expected to see their tourism business rising quicker as compared to the developing countries, because these countries already have safety nets in place through advanced healthcare and insurance, their currencies are stronger, and also because their citizens have better disposable incomes.

Aviation sector will provide a direct cue as to how fast the business, trade and commerce activities between countries will begin after the pandemic is over. Aviation is one of the most stressed sectors, and every government will have to ensure that the airline industry remains competitive to consumers, as growth in travel, holiday, leisure, and entertainment industry is directly proportional to the airfare competitiveness. Some of the prominent airliners in Asia, viz., Thai Airways, and Air India are looking for new investments or financial stimulus from existing owners to remain in the air. Most airlines world over, including in Europe and USA, have gone on drastic cost-cutting measures because of drop in traffic, and are struggling for survival. If travel and tourism has to grow, the Aviation sector must be well taken care of.    

We have seen this year that mega sporting events, trade exhibitions, and related conventions and events have been postponed or cancelled. Some major ones to named are Tokyo Olympics, Cricket IPL in India, Expo 2020 Dubai, ITB Berlin, English Premier League, La Liga, Serie A, and so on. These events boost the travel and hospitality sector in massive ways.

Cultural events, trade shows, and sports remove barriers and facilitate ways to collaborate and build relationships, and increase trade, and commerce between countries. As humans, we are not born to sit isolated and to remain locked inside our homes over an extended period of time. We have to collectively find ways to remain social and interactive. 

The world is going to change in a major way, in a sense that every individual will be forced to work at more than their capacity and support each other within society and at work, and at business, with passion and commitment, like never before. Simply because of the fact that mankind has never even been in the past compelled to be on our knees like we have been subjected to at this moment in time. 

More than anything else, it’s time to think how we have to remain in tune with nature. But the way the world has faced this grave crisis has only given us strength that we can fight this out sooner than expected. Tourism lets you dream and dream big! We can only hope that 2021 will bring a smile to everyone’s faces.     

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Sanjeev Kumar Sanju
Written By

Sanjeev is an entrepreneur and marketing consultant with interests in Tourism & Hospitality, Lifestyle & Fashion, and Green Energy. Follow him on LinkedIn.

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