One of my favorite pastimes these days is planning out all of the places I am going to travel to once it is safe to do so and the world fully reopens. Traveling was something that I prioritized before COVID-19 and it is something that I know I will get back to sooner rather than later. But in the short-term, the travel and tourism industry is of course feeling it. According to this recent article from FT, there were 67 million fewer tourists around the world in March 2020 compared to last year. And in April, passenger demand was down even further with a 94% year-over-year decline. This is something, because globally, tourism is believed to account for about 10% of the world’s economic output. Over the last five years, 1 out of every 4 new jobs around the world was in the travel and tourism space. And for some countries, such as Cambodia, tourism accounts for over 30% of overall GDP.
What has also happened over the last decade is that South and East Asia & Pacific has begun collecting a greater share of global tourism dollars, which is or was at about US$1.6 trillion in total. East Asia is now comparable to Europe & Central Asia — it may even be receiving a few more dollars at this point. However, there are some key differences. Tourism in Europe, more so than other region, relies on international travel. And since domestic travel is likely to recover before international travel, Europe is perhaps the most exposed in this regard. Europe also has a pretty pronounced peak. There is something magical about the Mediterranean in July and August and that is indeed when most people visit Europe (see above FT charts). Broadly speaking, the rest of the world doesn’t seem to experience this same overt seasonality. (If you think back to the start of COVID-19, you might remember that Asia’s travel “peak” usually happens in December.)
Will international travellers feel confident enough by July and August? And if they don’t and Europe misses summer 2020, will travel plans get pushed to later in the year or will Europe need to wait for summer 2021? For me it’s feeling like a summer of road trips and local vacations. But that doesn’t mean I’m not thinking about and planning for much more. My suitcase and passport are ready. What about you?
Charts: Financial Times