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How can the travel and tourism sector recover from COVID-19?

A globally coordinated approach is needed for the travel and tourism sector to recover from the COVID-19 pandemic, according to a new report by global consulting firm Oliver Wyman and The World Travel and Tourism Council (WTTC).

This falls in line with what Dubai Airports CEO Paul Griffiths said last month An estimated 121 million travel and tourism jobs and an $3.4 trillion in global GDP could be lost as 90% of the global population are adjusting to life under travel restrictions and others stay home in fear of the virus “As full year passenger numbers are forecasted by IATA to reach only 30% of 2019 levels in the Middle East, the implications to the travel and tourism sector brought on by COVID-19 were severe, leaving no traveler, businesses, workforce, and community untouched" - Matthieu De Clercq, Partner at Oliver Wyman

While the recent news of a potential vaccine has instilled a sense of hope across many industries, businesses in the travel and tourism sector are maintaining their understandably grim outlook for the future. Perhaps the greatest losers of the entire pandemic, airlines, hotels and resorts have been left holding on to dear life as quarter earnings turn up red. 

Unfortunately, the data has been quite as unforgiving. 

Back in June, the World Travel & Tourism Council (WTTC), which represents the global travel and tourism private sector, predicted that more than 197 million jobs could be lost in the sector if barriers to global travel, such as blanket anti-travel advisories and quarantine measures remain in place. With a second wave now upon us, these figures are looking more likely. 

To make matters worse, the International Air Transport Association (IATA) downgraded its traffic forecast for the Middle East for 2020 to reflect a weaker-than-expected recovery. The region is expected to see 60 million travelers in 2020 compared to the 203 million in 2019, down 70%, with a full return to 2019 levels not expected until late 2024.  

“Despite [this week’s] upbeat vaccine news, the reality is that producing vaccines on a global scale will take a year or more – and by the time the globe is inoculated, it will take maybe a further year for a degree of normality to ensue,” Saj Ahmad, Chief Analyst at StrategicAero Research, told AMEinfo.

So, what could the travel and tourism sector possibly do to pre-empt the eventual, if delayed, return to normal? 

Cooperation and a unified consensus
A globally coordinated approach is needed for the travel and tourism sector to recover from the COVID-19 pandemic, a new report titled To Recovery and Beyond: The Future of Travel and Tourism In The Wake Of COVID-19 by consulting firm Oliver Wyman and WTTC found.

This falls in line with what Dubai Airports CEO Paul Griffiths said last month.

Additionally, WTTC has adjusted its June guidance regarding the number of jobs that will be lost in the sector (previously 197 million), reducing the number to an estimated 121 million jobs. It also said that $3.4 trillion in global GDP could be lost now that 90% of the global population are adjusting to life under travel restrictions.  

According to the report, four macro-trends will lead the way through recovery and beyond.

Demand Evolution

  • Preferences towards predictable and trusted destinations
  • Domestic vacations and the outdoors

Health and Hygiene

  • Concerns on protocols and crisis situations
  • Readiness to health protocols

Innovation and Digitization

  • Acceleration of digitalization in the travel & tourism sector for a seamless experience
  • Contactless technologies

Sustainability

  • Heightened public awareness and increased importance of wildlife / environmental impact
  • Growing demand for businesses’ support for local community inclusion and diversity

The report also highlights that enhancing the current seamless travel experience, embracing the integration of new technologies and enacting global protocols are essential to rebuilding traveler confidence. It showcases the need for the public and private sectors to work together to recover the millions of jobs impacted, rebuild traveler confidence, and build the sector’s resilience. 

“As full year passenger numbers are forecasted by IATA to reach only 30% of 2019 levels in the Middle East, the implications to the travel and tourism sector brought on by COVID-19 were severe, leaving no traveler, businesses, workforce, and community untouched. As such, it has become essential for public and private sectors to work together to recover the millions of jobs impacted, rebuild traveler confidence, and build the sector’s resilience,” said Matthieu De Clercq, Partner at Oliver Wyman. 

According to WTTC’s 2020 Economic Impact Report, during 2019, travel and tourism was responsible for one in 10 jobs (330 million in total), making a 10.3% contribution to global GDP and generating one in four of all new jobs. 

With continual efforts being deployed to rebuild global consumer confidence and encourage the return of safe travels, Oliver Wyman’s second edition of the Traveler Sentiment Survey revealed that nearly 20% of global consumers are confident to travel now with interest in leisure travel remaining strong and presenting a growth since May. 

As the Middle East carefully monitors the opening of its borders to tourists and works through reestablishing travel confidence, there is a growing need for governments and institutions to be proactive in showcasing the highest safety and hygiene standards that are being adopted regionally.