Travel Industry Is Bracing For A Slower Recovery Than Expected In 2021

The tourism industry hoped it would be able to rebound from the Covid-19 pandemic this year, however, the slow roll out of vaccines is throwing a wrench in those plans.

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The Covid-19 pandemic has obviously caused a major economic decline to occur with the closings of multiple businesses and restrictions on travel. The tourism industry has been one of the most heavily impacted sectors of the US economy, and while 2021 was initially looking hopeful in terms of recovery, experts aren’t as convinced now. 

Between all the new strains of the virus and delays in vaccine rollouts, the United Nations World Tourism Organization is projecting a slow recovery for tourism and travel throughout the world. 2020 was the worst year for tourism on record with one billion fewer international arrivals than what’s typically expected. Back in October 2020, 79% of experts claimed that the industry could recover in 2021, while 41% believed that travel wouldn’t reach pre-pandemic levels until at least 2024. 

James Sowane is the owner of a transportation company for tourists in Fiji, who recently spoke with the media about the unfortunate situation he’s found himself and his company in. He claimed that he was forced to tell all of his employees to start looking for other jobs this month due to a lack in business, and while he was able to take advantage of government assistance programs to bring back some previously laid-off employees, vaccines need to be more rapidly distributed in order to maintain all of them. 

“Make no mistake, people will keep going out of business. They’re not going to survive if they can’t adapt, and no amount of resilience is going to get you through another year without more assistance.” 

According to the World Travel and Tourism Council, before the pandemic travel and tourism accounted for 10% of the world’s economy. “As of February 1st air tickets issued for international travel in the coming six months were 15.5% of what they were in 2019, down roughly 2 percentage points compared with January 1st. Scheduled flights this month are down nearly 50% globally compared with February 2019, with some markets down about 90%,” the Council recently published.

In the US the demand for hotels isn’t projected to return to its pre-pandemic levels until 2023 with room prices not fully recovering until 2025. “Gross travel bookings in the U.S., including hotels, air tickets and car rentals, are expected to still be below 2019 levels in 2024,” estimates travel-market research firm Phocuswright. 

“Vaccines were expected to be the great panacea. But at current vaccination rates, less than 20% of the world’s population is expected to be inoculated this year. We expect governments to be cautious when reopening borders. Temporary changes in the industry could start to become permanent,” said Charuta Fadnis, who leads Phocuswright’s research team.

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“Airlines and cruise operators have laid off or furloughed tens of thousands of people world-wide. Some hotels have closed to save cash until more customers return. Workers are looking for new careers.”

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Spain’s travel and tourism industry accounts for 14% of the nation’s gross domestic products; one of the highest percentages in the world. International travel to Spain declined by more than 75% last year, leading to an 11% decrease in the overall economy for 2020. Spain’s central bank is currently projecting a 6.8% growth this year, but it doesn’t expect the economy to reach pre-pandemic levels until 2023. 

The travel industry in general is hoping to recover with the implementation of vaccine passports, which would inform workers as to who’s been vaccinated or not. However, with a multitude of individuals being left in the dark about when they’ll receive their vaccines, this plan is anything but helpful right now for the industry. 

Businesses and countries are confident that a lot of individuals will want to travel the second they receive their vaccinations, and are hopeful that their desires will lead to a boom in the industry. On the other hand, there will likely be a much larger group of travelers who are hesitant to hop on a plane due to safety concerns. It’ll take a combination of confidence from all parties to truly get this sector back on track. 

Overall, the tourism industry will continue to rebuild and recover as much as possible within 2021 as vaccines continue to be distributed. There’s no time line regarding this pandemic and it’s prolonged end, so in the meantime it’s essential everyone does their part at home and remains vigilant.