The Economic Devastation of Tourism

Published October 25th, 2020 - 03:00 GMT
The Economic Devastation of Tourism
It is expected that the tourism industry will have losses that could potentially set the global tourism industry back 20 years says the World Tourism Organization. (Shutterstock)
Highlights
The impact of the pandemic is felt through the entire ecosystem of the tourism industry and that is why restarting tourism is crucial says the UNWTO.

The economic devastation caused by COVID-19 has affected many different industries and resulted in a huge financial decline. The tourism industry, which includes travel and hospitality, is among the many affected sectors and business owners are now scrambling to find a lifeline to keep their businesses afloat. 

With many countries closing their airports and imposing strict lockdowns and quarantine procedures at the beginning of the pandemic, the tourism industry was hit hard as hotels no longer had any constant source of revenue. It is expected that the tourism industry will have losses that could potentially set the global tourism industry back 20 years says the World Tourism Organization. Even with restrictions easing in some countries, the world is still facing a wave of constant anxiety that is preventing tourism from picking up. 

The UNWTO, World Tourism Organization, says that all nations will be affected by the economic distress that the tourism industry is facing and that around 100M tourism jobs are at risk. In third world countries like Jordan, the hit on the tourism industry entails more devastating consequences with tourism making up  13% of the country’s GDP. It is expected that around 40K jobs will be lost in the hospitality sector only. What is even more tragic is that small hotels and hostels might not be able to recover from the drastic losses like bigger hotels and businesses can. One example is a newly found hostel, The Wanderers, which was founded in mid-2019. Co-founders Abdullah Meslih and Ibrahim Mehyar, say that they had only around 10 guests since the pandemic started, but they have hope in recovery as some bookings are being made for the beginning of 2021. Another example that reflects the deep economic distress that the tourism industry is facing is Royal Jordanian Airlines (RJA). RJA losses has reached 55% of the company’s capital with its current liabilities exceeding its current assets. 

The GCC region is also facing economic turmoil. Hala Matar Choufany, President of HVS Middle East, Africa and South Asia expects tourism losses to reach 50M-60M dollars in the Gulf. In the UAE alone, the impact of the losses in the travel industry amounts to 25.9B dollars in loss in the country’s GDP. Etihad airlines has had a drop of 38% in its revenue, and Emirates airlines has decreased their workforce by 25%

The impact of the pandemic is felt through the entire ecosystem of the tourism industry and that is why restarting tourism is crucial says the UNWTO.

 

By Sama Al Kurdi

Sama Al Kurdi is an Industrial Engineer who is passionate about the business and tech scene in the MENA region.


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