Spl Report

Report: Impact of COVID-19 on global tourism growth

By Sikha Thakur

Unlike other industries, it is difficult to define the tourism industry, as it doesn’t constitute one clear product. It incorporates many industries, including lodging, transport, attractions, cruises, travel companies, tourism boards and so on.

Since early 2020, the tourism industry was severely impacted by the global coronavirus (COVID-19) pandemic.

The global travel and tourism’s direct contribution to GDP was approximately US$4.7 trillion but the United States’ travel and tourism industry contributed the largest sum at US$1.1 trillion in 2020 when observed at countries that directly contributed the most to global GDP.

Prior to COVID-19, both leisure travel spending and business travel spending saw year-over-year growth in the five years. This increase in travel before the health crisis also allowed the number of hotel guests hence the hospitality industry’s market size to grow. Key performance indicators like RevPAR (revenue per available room), ADR (average daily rate) and occupancy have seen year-over-year growth over the past decade due to an influx of tourists globally.

Meanwhile, the airline industry – with the revenue of the global commercial airline industry reaches 472 billion U.S. dollars in 2021 after a decline during the COVID-19 pandemic.

With the developing digitalization of the travel industry, many consumers turn to online travel agencies to book their trips. But due to coronavirus pandemic, an almost 50 percent drop in revenue is seen presently.

One major trend that travel agencies and the tourism industry will have to adapt in the future is the increasing global interest in environmentally friendly travel. Nowadays, a growing number of tourists have begun recognizing the negative impact, their trips can have on affected regions. Hence, more and more global travellers believe in the importance of sustainable travel staying in eco-friendly or green accommodations – a concept that has helped companies like Airbnb to become more popular.

As countries implemented severe travel restrictions to curb the spread of coronavirus disease, national and international tourism came to a drastic halt. It was estimated that the global revenue of the travel and tourism industry dropped by 42 percent in 2020. While the long-term economic damage caused by the COVID-19 pandemic, the standstill public life has also affected industries connected to tourism, like global restaurant visitation, theatre performances and events.

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