The tourism industry is one of the main economic sectors in many European Union Member States. As such, it has a large part to play in maintaining the employment rates. The SARS-CoV-2 pandemic is harming the tourism industry. The extent of the losses incurred by this sector will largely depend on how the pandemic develops further and how it is contained, both within the individual Member States and at the EU level.
Tourism on a global and European scale
Globally, tourism is a major economic sector – the third-largest export segment – and it accounted for 7% of global trade in 2019. In Europe alone, this sector provides 27 million jobs. It also makes a significant contribution to the economies of countries such as Germany (3.9%), France (7.4%) and Spain (11.8%).
The EU (as a whole) is the most visited region in the world, with around 37% of all international tourists having arrived here in 2019. Therefore, tourism was a crucial sector of the EU economy, accounting for 9.9% of gross domestic product and 11.6 per cent of all jobs across the EU in 2019.
According to statistics, the international tourist traffic was growing at an average annual rate of around 4% worldwide since 1995. In 2019, international tourist numbers reached 1.5 billion. Approximately 9 billion people travelled within their own countries. Many factors contributed to the increase in the tourism activity, including the societies growing wealthier and the budget means of transport and Airbnb-style accommodation emerging.
However, it deserves to be pointed out here that the tourism industry is usually the first to react to any crisis, as it was shown, for example, by the decline in tourist traffic by around 4% in 2009 due to the economic crisis.
The collapse of tourist traffic due to the outbreak of the SARS-CoV-2 pandemic
The current breakdown of the tourism industry has no precedent in history in terms of the scale and the extent. This is because it affects each and every tourist destination. Global international tourist travels in 2020 are estimated to have decreased by 79% compared to 2019. The Asia-Pacific region saw an 82% downturn in arrivals. The decline in the Middle East, on the other hand, was 73% and in Africa – 69%. International travels to Europe and both Americas fell by 68%. At the very beginning of the pandemic, 90% of countries closed their UNESCO World Heritage sites. In the initial wave of the crisis, around 90% of museums were closed.
The decline in international travel has led to a global loss of $2.4 trillion in 2020 alone. The losses in the tourism industry may translate, on average, into a 2.5 times greater decrease in the real GDP, and the countries that are more heavily dependent on this sector of the economy may experience even a decline that is four times greater. In May 2020, the World Tourism Organisation estimated that 100-120 million people are at direct risk of losing their jobs as a result of the crisis.
Such a decline in tourist traffic during the pandemic is due to the very nature of travel, which, to a large extent, involves moving between regions, countries and continents. Moreover, it often requires staying in large crowds of people, which gave rise to great social anxiety, especially at the beginning of the pandemic. The increased tourist traffic may have posed some danger to the travellers, the employees of accommodation facilities and cultural sites, and the local residents.
In addition, at a time of aggravated economic uncertainty, the demand for tourism services is decreasing, both in the business tourism sector and in private travel. The pandemic has caused a significant slowdown in economic growth and even an economic recession in some sectors. As a result, many people have lost their jobs, which led to reduced income.
Mobility restrictions are also an important factor. If travel regulations may unexpectedly change at any time, it is very difficult for individuals and travel agents to plan their journeys. According to the WHO data, in April 2020 alone, 96% of tourism-related destinations worldwide could not provide their services due to pandemic restrictions.
An example of a similar event in the past – albeit on a smaller scale, as it affected a limited area – was the Severe Acute Respiratory Syndrome (SARS) outbreak in 2002-2004. Back then, Hong Kong saw its tourism GDP decline by 41%, Singapore – by 43% and China – by 25%.
It is also worth noting that a drop in demand for tourism services also entails decreased funds for environmental protection, because as much as 7% of global tourism is focused on wildlife.
Changes in the tourism industry caused by the SARS-CoV-2 pandemic
The virtually complete arrest of tourism at the beginning, citizens’ fears related to travel, and the need to adjust to the tighter budgets in companies and households have entailed many changes in the tourism industry.
Firstly, we must point to the digitalisation of this industry. This includes e.g. contactless check-in and check-out of accommodation (mainly hotels). Such technological solutions minimise or even eliminate some potential points of contact with hotel staff and other guests. Using the online check-in option, interaction with the reception personnel may be eliminated. In such a case, before the stay, the guests usually receive an email with a link to an online form, easy to fill in using a smartphone or other device. In addition, many travel agencies have abandoned any contact with their holiday reps at the destination site. The tourists spending holidays abroad can buy a trip or check the details of their departure in dedicated smartphone applications. These changes to tourism will become permanent, and it will also affect the related professions. We may anticipate that there will be a significant reduction in demand for travel agent representatives temporarily posted abroad. Travel agencies are more likely to hire the residents of the given region who are fluent in the required language. To a large extent, this will allow travel agencies to make savings on, for example, renting accommodation or business cars for the people employed at the destination.
Also, the MICE sector (Meetings, Incentives, Conferences and Exhibitions Industry) is becoming digitalised, particularly in terms of the organisation of the events, which initially were attended only remotely, but nowadays, a hybrid option is the most common form, i.e. a combination of a live meeting with the possibility of active or passive virtual participation. This trend in the industry is likely to continue permanently, which means that event companies need to both know and have the relevant tools. Changing the approach to the event organisation appears crucial, as up to 65.5% of businesses in the industry lost from 75% to even 100% of their profits at the start of the pandemic in 2020 alone.
Because of the required social distance, some hotels have withdrawn or significantly limited the services of tourist entertainers and the all-inclusive option for the duration of the pandemic, introducing an a’la carte menu and even serving meals to rooms. This has certainly reduced the demand for the personnel, mainly the entertainers. However, one may predict that the fear of the pandemic and the desire to travel may, in the long term, cause tourists to choose the all-inclusive hotels, as it reduces the need to visit restaurants and to stay in groups of other people. Of course, the condition is that hotels take all the safety precautions.
For the same reason, noticeably fewer local tours are organised (so-called optional trips), as their organisers had to get tourists from different parts of the world to mingle together, e.g. in one coach or on one ship. This trend was particularly evident in 2020, before the introduction of the vaccines. Individual tourists, on the other hand, are more likely to choose car hire.
In the long term, this may lead tourists to choose destinations and hotels they know and consider safe (also in terms of hygiene or low incidence of diseases in the region) on the one hand, and to choose to travel in smaller groups or use the services of a tour guide on the other hand. This may increase the number of tourist attractions in already familiar regions and destinations.
The measures to minimise the negative impact of the SARS-CoV-2 pandemic on the EU tourism industry
The experts do not expect tourism to return to a pre-pandemic state before 2023. High vulnerability of this sector to various crises implies the necessity to develop mechanisms and solutions at the EU level to ensure the sustainable development of the sector.
However, it should be stressed here that the tourism policy, like the protection and improvement of human health, is regulated entirely by the Member States. Partial transfer of their competencies to the EU level must be preceded by changes in the treaties.
The Union shall have competence to carry out actions to support, coordinate or supplement the actions of the Member States. The areas of such action shall, at European level, be:
(a) protection and improvement of human health;
(e) education, vocational training, youth and sport;
(f) civil protection;
g) administrative cooperation.
Therefore, the principle of subsidiarity is involved here, but it must not be abused by the EU. However, the EU, despite its limited role in this area, has introduced several supportive instruments for the tourism businesses and employees, including:
- liquidity support;
- tax relief;
- relaxation of the state aid rules;
- temporary suspension of the EU slot allocation provisions.
They were intended to facilitate travel planning and to provide financial aid to the tourism businesses.
To support travel planning, the European Commission has launched the Re-open EU portal, which contains all information on the regulations on travelling to the individual Member States. It is updated on an ongoing basis.
The EU has also introduced the EU Covid Certificate, confirming the right to move freely within Europe during the pandemic. It provides an additional opportunity to confirm one’s COVID-19 health status and complements the already existing solutions at national borders. It presents three states:
- a vaccinated person;
- a person who has recovered (a convalescent);
- a person with a negative test for COVID-19.
However, one must remember that each EU Member State may have different rules related to a given status because of the above-mentioned exclusive competence of the Member States to protect and improve human health.
Given the differences between the Member States, the European Parliament, representing EU citizens, adopted, in March 2021, a resolution on establishing an EU strategy for sustainable tourism. It aims, among other things, to show possible action plans to respond to the effects of the COVID-19 pandemic. In its resolution, the European Parliament e.g. “asks the Member States to fully implement, without delay, common and coordinated criteria for safe travel, as adopted by the Council in its recommendation on a coordinated approach to the restriction of free movement, while facilitating the deployment of the EU Passenger Locator Form, digitally where possible, with full respect for data protection rules (…); calls for the European Centre for Disease Prevention and Control (ECDC) to monitor and continue to publish, in a timely manner, the colour coded map of Union countries and regions, including islands – where sufficient information is available – with a view to offering travellers and businesses a coordinated and efficient response (…); the Commission and the Member States to develop as a matter of priority a common vaccination certificate and a system of mutual recognition of vaccination procedures for medical purposes, which should be rolled out in parallel with the distribution of vaccines, while preserving individuals’ rights to privacy and data protection.”
However, it deserves to be noted here that the European Parliament resolutions do not have the force of a legally binding document. Instead, they usually express the EU position on important issues and provide guidelines for relevant actions to be undertaken in the future.
The World Tourism Organisation – UNWTO – has created a subsite on the future of tourism. It is available in English, Spanish, French and Arabic. In all its posts, press releases or reports, the UNWTO stresses the need for global coordination of actions to rebuild tourism. Therefore, the UN has defined the following priorities for the relaunch of tourism:
- mitigation of socio-economic impacts on livelihoods;
- boosting competitiveness and building resilience (including by promoting national and regional tourism);
- supporting innovation and the digitalisation of the tourism ecosystem;
- fostering sustainability and inclusive green growth;
- ensuring coordination and partnerships for the relaunch or transformation of tourism.
Such actions, i.e. defining common objectives, priorities, exchange of good practice and information at a global and European level, are essential to strengthen a tourism sector weakened by the pandemic and to maintain jobs or facilitate the personnel retraining. For the first time in the history of the EU, it is necessary to prove the solidarity of the Member States in introducing uniform restrictions at the entry or the vaccination requirements, which will allow travellers to gradually adjust to the new travelling rules, and thus make it easier and quicker for the tourism sector to adapt to the new reality.
Anna Biernacka-Rygiel, Ph.D. – professionally involved in international cooperation in the field of aviation. Moreover, she is affiliated with the Lazarski University in Warsaw. A long-term employee of public administration in the transport sector and the EU funds. Member of the Centre for International Initiatives and Team Europe expert network.
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