If the COVID-19 pandemic continues devastating lives and industries, more than 120 million people working in the global travel sector could lose their jobs in the near future—and that’s the optimistic figure, according to Gloria Guevara, president and CEO of the World Travel & Tourism Council.
During a webinar examining the future of the travel and tourism sectors hosted by Ernst & Young and the WTTC, insiders from the two companies as well as a range of tourism boards examined how the industry is adapting to disruption and preparing for a complex future.
By The Numbers
Guevara started the webinar with some significant facts about the travel and tourism industry, once the second-fastest growing worldwide. “For the last nine years, we have outpaced the growth of the economy,” she said. In 2019, the global gross domestic product grew 2.5 percent overall, but the travel and tourism industries grew 3.5 percent.
Travel and tourism-related industries contributed 10.3 percent to the global GDP, with 330 million jobs supported by the industries. “And what's very important is that when you look at all the jobs that were created in all the industries and all these sectors for the last five years, one out of four were in travel and tourism,” Guevara said, noting that overall, one in 10 jobs are supported by the sector.
In the face of the pandemic, however, WTTC expects that 121.1 million people working in the travel sector (or 37 percent) could lose their jobs. “And what’s challenging is if we don't get things right, if we don't move in the right direction, unfortunately, these numbers can grow to 197 million jobs worldwide,” Guevara said. At the same time, the overall GDP in the sector could decline nearly $3.5 billion in the best of circumstances, or more than $5.5 billion if the situation does not improve.
As of the time of the webinar, an estimated 65 percent of destinations worldwide were closed to international travelers, said Maya Whiteley, Middle East/North Africa destinations and tourism solution leader at EY. For the remainder of 2020, EY estimates that international travel is likely to contract by anywhere from 58 to 78 percent for the year. “From a socioeconomic perspective, it boils down quite simply to a severe economic shock that in many cases impacts the most vulnerable populations,” she said, citing the number of people who rely on the sector for their livelihoods.
To anticipate the future, WTTC has examined previous negative impacts to the sector, highlighting several that could suggest how the travel industry emerges from this downturn. The terrorist attacks of Sept. 11, 2001, affected travel for years, but some countries took longer than others to get back on the road, both literally and metaphorically. “We had different protocols around the world,” Guevara said. “Unfortunately, every country defined their own safety and security protocols without the collaboration from the private sector and without coordination among countries”—similar to the wide range of responses to COVID-19.
Another notable lesson was the global financial crisis of 2008. “This crisis was bigger than 9/11; however, we recovered from it faster,” Guevara said, adding that the recovery was due to a coordinated response. “That's when the G20 platform was created. Public and private collaboration was excellent.” As such, the industry in many countries was able to recover in an average of 18 months, she said.
And then there were the lessons learned from the outbreaks of severe acute respiratory syndrome, Middle East respiratory syndrome and Ebola, during which people could travel even without an available vaccine. “We were able to isolate the infected people,” Guevara said. With about 80 percent of COVID-19 patients not displaying any symptoms, isolating infected travelers becomes decidedly more challenging, she acknowledged.
Four Principles for Recovery
Guevara cited four key principles the global tourism industry will need to make in order to drive recovery.
First, a coordinated approach to re-establish effective operations would require reopening borders (removing and replacing any quarantine measures with possible “air corridors” to countries with similar circumstances) and removing barriers (eliminating travel advisories and bans on nonessential international travel). “When we reopen borders, we need to do it in a coordinated way,” Guevara said.
Secondly, health components must be added to the travel experience, combining technology and any necessary protections. Even before a vaccine is developed, the industry will need to integrate testing and contact tracing to the key end-to-end travel touchpoints, cooperating with airports, airlines, hotels and tour operators. Once a vaccine is in place, the industry will have to work together to integrate a digital health stamp to the traveler’s information before a trip begins.
Third, global health and safety protocols—as defined by the industry’s private sector, public sector and health experts—will need to be adopted to assure travelers of their safety. “That's why we have the private sector work with [the World Health Organization, the Centers for Disease Control and Prevention] and multiple experts around the world to define and come up with these protocols so that the traveler can have exactly the same experience in New York, London, whatever country they travel [to],” Guevara said.
And finally, governments will need to continue supporting the sector in terms of financial aid, liquidity incentives, worker protection and promotions. “This is not a switch that is going to be on-and-off,” Guevara said. Instead, recovery will be a “trajectory,” and support from the public sector will be crucial.
Safe Travel Protocols
To determine how people can travel safely, the WTTC consulted hoteliers who offered guestrooms to doctors and nurses treating COVID-19 patients in hospitals without transmitting the virus. “So that knowledge, plus the knowledge from WHO, CDC and all the experts was included,” Guevara said, adding that the Council has been working with industry associations to develop realistic practices that can keep everyone safe and on the road. “The goal at the end of the day is to rebuild the trust from the traveler,” she said. “How do we make sure that we can rebuild that trust, and we don't make the same mistakes that we made in some past situations?”
To indicate which governments and companies have adopted the necessary health and hygiene global standardized protocols, the WTTC launched the Safe Travels stamp. Public and private organizations and businesses can apply for the stamp and boost the traveler trust Guevara said was so vital to the industry. The WTTC has approved the stamp for 50 destinations, she added.
A crucial part of safe travels is encouraging travelers to wear masks as much as possible, following medical guidance from the Harvard T.H. Chan School of Public Health. The risk of getting COVID can be reduced between 82 and 92 percent, according to the School’s research, Guevara said, and the WTTC’s “Wear to Care” campaign promotes masks for every part of a journey and whenever indoors. “There is a correlation between the destinations that are recovering faster, and the ones that are wearing the mask, which is very important,” Guevara said.
Never Waste a Crisis
The pandemic, EY's Whiteley said, has heightened the emphasis on certain inefficiencies and issues that the industry has faced and that require “creative and agile approaches to better manage resources, products and experiences in response, particularly to shifting traveler trends.”
Similarly, Whiteley sees a heightened need to diversify the tourism markets in terms of lodging, attractions and experiences, “targeting different travel segments and looking at creative ways to diversify source markets as certain travel segments recover more slowly,” she said. “How do you turn the crisis into an opportunity for destination development?”
Robbie Karver, Latin America/Caribbean destinations and tourism solution leader at EY, echoed her sentiments. “Changes that you make today to not only help save your tourism economy can also be key implementation points for how [to] revitalize your tourism industry or how [to] grow your tourism industry in the future,” he said.
EY has developed a “now, next and beyond” approach to dealing with the crisis, Karver added, focusing on the current situation, the path to recovery and the future state of the industry. “Now, the most important part is to listen to the key stakeholders and communicate with each other,” he said. “This includes owners of hotels and businesses, lenders, government, tourism sales agents, airlines—they all have their own agendas but listening to their perspective is very important and communicating is very important.”
“Next” is revitalizing the economy by promoting less-expensive destinations and encouraging visitors to consider areas that they otherwise would not have seen. Mexico, Karver added, has done this step particularly well.
“Beyond” is diversification and innovation. “Start to look introspectively at yourself," he said. "What do you have that a close population might have access to? And how can you—as [Guevara] mentioned—work with the government authorities on a unified approach to safely bring people into your market?”
The most important part, Karver added, is to not only manage a business or destination’s image and manage communication, but to really think about differentiating the product and driving new demand both internally and externally.
Different Markets, Different Responses
The second half of the presentation was a panel of moderated by Brian Tress, global destinations and tourism solution leader at EY and Maribel Rodríguez, SVP membership and commercial at the WTTC. The panelists, representing tourism boards worldwide, shared best practices for surviving crises and discussed their own paths to recovery.
Darío Flota Ocampo, CEO of the Mexican Caribbean Tourism Board, said his team maintained close communication with tour operators and airlines in the major source markets. The tourism board has already developed campaigns for Europe, North America and South America and one for domestic tourism in Mexico. But with travel restrictions in place, he acknowledged, many international destinations are not yet able to reach Mexico.
Maria Anthonette Velasco-Allones, COO, Tourism Promotion Board Philippines, cited the “Three Cs” as an effective tactic for tourism survival. “The first is really collaboration,” she said. “Our government cannot do this alone or neither can the private sector.” The next C is building capacity in both the public and private sectors in order to maintain employment numbers. “We have spent time during the lockdown to stage training programs [and] webinars, just to give people more knowledge and enhance the competencies.” The final C is the value of communication. “It's imperative that we have real data, correct data ... to make sure that the decisions that we arrive at, and the options that we explore, are things that are responsive to the real needs not just of the stakeholders, but also of the country—and now we're looking at the global community.”
New York City, once the epicenter for the virus in the U.S., has implemented a 14-day quarantine for travelers from more than 20 states in an effort to contain any new possible outbreaks coming in from outside the market, said Fred Dixon, president and CEO of NYC & Company. “So a lot of containment procedures are in place at the moment.”
Luís Araújo, president of Turismo de Portugal, said that throughout the pandemic, no hospital in his country had an occupancy rate of more than 60 percent, which he credits to quick implementation of safety rules and a willingness of people to follow those rules. Now that the country is open for business, rules are still in effect for tourists and locals alike. “If you want to go to the beach, for instance, now you can know exactly what's the capacity in your beach or the beach closest to you through an app. If you go to restaurants, you have to wear a mask when you enter, you can take it off when you're sitting. People comply. And I think that's the most important thing. We're not afraid of welcoming tourists and welcoming tourists that have the virus because we know how to behave, and we know how to tell people to behave.”
Savvas Perdios, deputy minister of tourism for Visit Cyprus, said the talk about recovery means that demand is starting to pick up. While domestic tourism is doing well (with “very small numbers,” he acknowledged), international demand has not really picked up. “So I wouldn't talk about their recovery just yet,” he said. “I would point out that this year, for us, is about making sure that our businesses survive into 2021, when I see the recovery really beginning.” By conveying a message that the country can handle a crisis and welcome travelers safely, he predicted, Cyprus is investing in its future.