Down But Not Out: Can Tourism Make A Comeback?

The tourism sector is used to cyclical downturns. When the economy suffers, the first item that people cut is leisure travel. But 2020 was a downturn like no other. With international travel virtually halted, tourism-related businesses have suffered their worst year on record.

There is no question that tourism will eventually recover – the pent-up demand is definitely there. But how long will that recovery take? Can the tourism sector reinvent itself and address the issues that made it unsustainable before the pandemic?

BEATDOWN

The fall in tourism is having very tangible economic and social consequences. Before the pandemic, the sector directly contributed 4.4 percent of GDP, 6.9 percent of employment, and 21.5 percent of service exports in OECD countries, on average

HOW TOUGH WAS 2020, EXACTLY?

AVIATION

According to the International Civil Aviation Organization, global air traffic dropped from 4.5 billion in 2019 to 1.8 billion in 2020. The financial loss to the industry was US$370 billion. Additionally, airports and air navigation service providers reported a loss of US$115 billion and US$13 billion, respectively.

HOTELS

In Malaysia, the hotel industry alone is expected to lose as much as RM6.54 billion in revenue this year. Overall average occupancy rate (AOR) this year is estimated to be 27.51 percent, while the average daily rate (ADR) is projected to be RM196.69. Since March, 109 hotels, resorts, motels, home stays and chalets have shut for good. And as at May, job losses were at 12,000, or 6 percent of the industry’s workforce.

RESTAURANTS