At the global level, the tourism sector is currently one of the hardest-hit by the outbreak of COVID-19 with impacts on both travel supply and demand. This represents an added downside risk in the context of a weaker world economy, geopolitical, social and trade tensions, as well as uneven performance among major outbound travel markets.
The coronavirus pandemic is putting up to 50 million jobs at risk in the global travel and tourism sector, with travel likely to slump by a quarter this year. Asia is becoming the most affected continent, the World Travel and Tourism Council (WTTC) said.
World tourism leaders have been urged to execute crucial measures to save the Travel and Tourism sector ahead of the special meeting of the G20 hosted by the Kingdom of Saudi Arabia recently.
The call was made by the WTTC which to prevent a catastrophic collapse following the spread of the coronavirus pandemic, putting up to 75 million jobs at immediate risk. WTTC implored the G20 leaders to assign resources and coordinate efforts to rescue major travel businesses such as airlines, cruises, hotels, Global Distribution System (GDS) and technology companies.
Besides, the Small and Medium-Sized Enterprise (SMEs); such as the travel agents, tour operators, restaurants, independent workers and the entire supply chain should be considered to save the jobs of the 330 million people who rely on Travel and Tourism for their livelihoods, WTTC said.
Gloria Guevara, WTTC President, and CEO said: “The coronavirus pandemic has put the sector in unprecedented danger of collapse, which is looking likely increasing unless the global rescue package is agreed to bolster what has become the backbone of the global economy”.
As to her, WTTC’s Economic Impact Report for 2020 reveals that this vital sector was responsible for generating one in four of all new jobs globally in 2019 and will have a crucial part to play in powering the global economy.
“It is therefore of the paramount importance that the G20 take urgent action now to preserve the 75 million jobs at immediate risk, which would represent a crushing Travel and Tourism GDP loss to the world economy of up to a US 2.1 trillion in 2020 alone,” she noted.
“A determined and decisive action by the G20 could reverse this, save millions from misery, and bolster from one of the main engines of future economic growth. On behalf of millions of families and businesses, large and small around the world, we implore the G20 to take this vital step. We also recognize the efforts from all G20 countries in supporting a sector that alleviates poverty, provides opportunity especially for women and the youth and is an engine for economic growth,” she stated.
The importance of the Travel and Tourism sector for aiding the world economic recovery is revealed in WTTC’s latest Economic Impact Report which shows that throughout 2019 the sector supported one in 10 jobs (330millions), making a 10.3 percent contribution to global GDP and generating a quarter, one in four, of all new jobs.
According to an independent European News Media Network that is EURACTIV; Europe’s tourism industry is bracing itself for an economic impact that could potentially push several countries into recession, as a result of the ongoing coronavirus crisis on the continent.
Without a stable stream of visitors from outside the community, the European tourism industry alone is said to experience an estimated financial loss of roughly €1 billion per month, European Commissioner for Internal Markets, Thierry Breton had announced recently.
Recently, The European Tourism Manifesto alliance was stated calling for further measures to limit the COVID-19 impact on tourism representing the European travel and tourism sector.
“Support for tourism must be a priority in the crisis response recovery plans and actions of affected economies,” the alliance said in a statement.
With millions of jobs currently at stake, many small and medium enterprises (SMEs) risk closing their business, the statement added.
The advocacy group welcomed the immediate response presented by the European Commission to mitigate the socio-economic impact of the COVID-19 outbreak.
In its crisis counter-measures, the EU’s executive promised to reallocate unspent structural funds amounting to €37 billion to support health systems, SMEs and affected sectors and workers. It is also looking at making a further €28 billion of structural funds available, EURACTIV reported.
“We call for immediate implementation of these measures, which should be reinforced by additional instruments focused on the tourism sector,” the alliance urged.
Potential measures should include temporary state aid for the tourism and travel sector. Governments should include fast and easy access to short- and medium-term loans to overcome liquidity shortages, including funds made available by the EU through the Corona Response Investment Initiative, fiscal relief for SME’s and protection of workers from unemployment and loss of income.
In the long-term, the alliance suggests a simplification of visa rules, reducing or waiving travelers’ taxes and supporting economically hit destinations with promotion and marketing to attract tourists and guarantee a swifts recovery in the aftermath of the crisis.
Corona-plague Italy with serious loss
Europe’s hardest-hit country by the coronavirus outbreak, Italy, is expected to suffer an economic hit due to lack of revenue from tourism, especially around Easter, as Rome’s piazzas are expected to remain empty.
Italy could lose up to €4.5 billion in tourism revenue this year as virus’ fears keep visitors away, according to polling agency Demoskopika.
According to EURACTIV News Media Network, if the situation continues and the virus continues to keep visitors away, Italy could drop up to €7.4 billion between March and the end of May alone, the Confturismo-Confcommercio tourist lobby estimates.
Besides, a forecast from March 2020 reveals that the tourism expenditure in Italy could register a dramatic drop in 2020, due to the coronavirus (COVID-19) pandemic. The estimate, considering a scenario in which the emergency lasts until October 1, 2020, shows that the catering sector will be significantly damaged by the COVID-19 outbreak. This sector is expected to record a loss of roughly 17.4 billion Euros in 2020, the Statistic Research Department of Italy.
Meanwhile, Greece, which has been emerging from a decade-long financial crisis, is expected to suffer from the coronavirus impact on its vital tourism sector, which accounts for around a fifth of Greece’s economy and more than a quarter of jobs, according to the London-based World Travel and Tourism Council.
At the same time, Portugal’s tourism industry is already feeling the impact of coronavirus with 60 percent of hotels in the southern Algarve region reporting cancellations and employers across Portugal fearing the worst is yet to come.
Heavily dependent on tourism, Portugal attracted more than 16.3 million foreign visitors last year, up from about 10 million in 2014, when the economy slowly started to recover from the country’s debt crisis. The sector contributed 14.6 percent to the gross domestic product in 2018, according to the latest official data.
Drastic measures in Europe’s high north
For winter-tourism in Europe’s High North, one of the fastest-growing businesses in northern Norway, the measures are taken to slow the coronavirus outbreak could mean a total economic meltdown as many operators announced layoffs, while others are closing activities entirely for the rest of the season, the Barents Observer reported.
Endegena Dessalegn, Public Relations Director at the Ministry of Culture and Tourism (MoCT) of Ethiopia told The Ethiopian Herald that when activity is restricted, the tourism sector is the most affected. When hotels are forced to stop their work, it is likely for waiters to lose their job and at the same time, unemployment will increase which resulted in the affected tourism sector.
Ethiopia had reported her first coronavirus case in the country on 13 March 2020. Since it is only a matter of days since Corona Virus enters Ethiopia, there is no numerical or definitive information on how much the Coronavirus influence on the tourism sector. But currently, COVID-19 is highly affecting the tourism sector at the global level including Ethiopia. So to mitigate the impact of COVID-19 on tourism, the Ministry has held discussions with the concerned authorities.
The Ministry of Culture and Tourism in collaboration with the Ministry of Finance has discussed what measures should be taken by hotel investors and what support they need from the government.
In the hotel industry job opportunities have been created for many citizens. Hotel owners have agreed to pay employees for half a year to keep their employees from firing and promoting unemployment if they stop working because of COVID 19, and have asked the government to reduce the tax, to create a conducive condition for credit. It is expected to answer soon, he said.
The Ethiopian Herald March 31/2020
BY ESSEYE MENGISTE
