Will Travel Industry Revive Post COVID-19?
The COVID-19, or Novel Coronavirus, is proving to be the worst pandemic of the first half of the century. The effects of COVID-19 has been well documented, first, it has consumed close to one million lives (at the time of writing this article); second, it has brought global business to a standstill and third, it has quelled any chances of things returning to normalcy any time soon in future. COVID-19 has spread its deadly tentacles to affect almost every sector from manufacturing, entertainment, hospitality to agriculture. The services industry has taken some heavy blows left, right and centre. The global and tourism industry has proved to be one of the worst hit sectors post outbreak.
Market Size and Forecast of Travel & Tourism sector:
The year 2020 started off with a bang with industry experts envisaging a high industry growth rate until COVID-19 played spoilsport. Here is a summary of the market size and forecast of the travel and tourism sector. The travel and tourism industry worldwide was valued at USD 7,581 billion in 2014 (nearly 10% of the total GDP) and was expected to grow by 3.8% in 2015. Experts further valued the global travel industry to grow by 3.9% year-on-year and touch USD 11,382 billion (10.6% of the total GDP) by 2025. The travel and tourism sector generated USD 1,384 billion in 2014 out of visitor exports which is slated to reach USD 2,141 billion in 2025, posting a CAGR of 4%. The investment made in this sector witnessed an increase from USD 814 billion in 2014 at a year-on-year CAGR of 4.7% to touch USD 1,336 billion in 2025.
Tourism industry in Europe is the biggest in the world with a share of 51% in 2015. Europe tourism industry witnessed a spike in the number of international tourists in Spain, France, Italy, the U.K. and Germany. The travel and tourism sector generated revenue of USD 142 billion in the U.K. in 2015. In North America, it generated revenue of USD 1,412 billion in 2015.
The U.S. followed up closely with USD 1,218 billion of revenues in 2015 which puts it to the top of the table in North America. Canada is placed second with USD 98.2 billion. The travel and tourism industry in the U.S. was projected to achieve a strong CAGR over the forecast period from 2016-2025. Up till the outbreak, the travel and tourism market in the Asia-Pacific was expected to grow tremendously, thanks to the growing economy, robust infrastructural developments and increase in disposable income levels in major countries including China, India, Singapore and Japan. These factors have contributed a lot to the growth of the travel and tourism market in the Asia-Pacific region that is slated to attract over 502 million visitors by the year 2025.
So, what happened post COVID-19?
The outbreak brought the travel & tourism sector worldwide to its knees. Borders across the nations were completely sealed. Cities came to a grinding halt. Staying indoors became the order of the day. Lockdown after lockdowns put the brakes on transport. Flights were happy to remain grounded, and the cruise ships docked safely in harbours. Trains remained suspended for most part during the lockdowns. Bus stopped plying. Hotels were closed down. Restaurants were shut. When the ferocity of the virus will abate was anybody’s guess. No vaccine (even at the time of writing this piece) seems imminent—no, not until the early part of 2021. Social distancing is the new normal. Face masks and a pair of safety gloves are the new safety appurtenances. Thinking of a holiday? Don’t be too sure.
Just for the numbers, India had about 10.5 million foreign visitors a year ago. Five million NRIs returned home to unite with their family and friends, 1.8 billion domestic travellers toured the country for holidays, leisure and pleasure and bleisure, and 26 million travellers flew out of the country for travel. An estimated 3.8 crore people depend on the travel & tourism industry for livelihood. The numbers are staggering, and so will be the social problems arising out of unemployment due to the uncertainty at large.
Will the industry revive post COVID-19?
That’s the big question we have for you to which the answer lies in how the industry will respond first to the safety norms and protocols as prescribed by the state governments. From contactless payment, touch-free operation, hands-free sanitisation to following social distancing norms, the industry has to reinvent the wheel. What will actually help revive the fortunes of a battered industry is digital transformation at the core of operation. It is the ability of the industry to adapt to the new norm and play the game accordingly. The emergence of Artificial Intelligence (AI), Machine Learning (ML) and Analytics will transform the industry for good, as successful businesses adopting these innovative technologies have proved now and then. Early adopters of digital technology will clearly emerge winners leaving the non-adopters vulnerable to wide-scale industry disruption.
Shameer is a script writer and blogger who loves to muse on Entrepreneurship and Startups. He occasionally writes PR and blogs for Emperor Traveline, a leading Travel Agency & Tour Operators in Coimbatore, in the area of travel management.