2020, a dark year for global tourism - Ask a KEDGE expert

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May 5, 2020

The coronavirus health crisis, tracked statistically in real time by Johns Hopkins University, is hitting the global economy hard and the tourism industry most of all. The World Tourism Organization (WTO) is expecting a drop in tourism revenue of 300 to 500 billion dollars in 2020, up to one third of the 1,500 billion generated in 2019. France could lose out on up to 40 billion euros per quarter. Millions of jobs in the sector are under threat worldwide. Anne Gombault and her co-authors Claire Grellier Fouillet and Jérémy Lemarié analyse the drastic consequences of the crisis for global tourism, the strategic issues that it emphasises and the opportunity for transformation and learning that it offers.

 

Structural factors amplifying the crisis

 

First factor: At the start of the crisis, the most affected tourists were the Chinese, the biggest spenders far ahead of the Americans.

Second factor: the crisis then hit the top global destination - Europe. In 2018 the continent welcomed 672 million tourists, half of the world's international arrivals. One third of these tourists travel in Italy, France and Spain, all of which are among the 6 countries most affected by coronavirus, with popular destinations such as Venice,Florence, Paris and Milan.

  

The third factor is slower to arrive but will probably be harder hitting, the process of deciding whether to book holidays. This is a risky decision due to the nature of the tourism service: trying before buying is not possible and it is a significant investment that requires searching for information and comparison of prices and destinations.  The entire sector has entered a negative growth phase with between 3% and 12% fewer tourists depending on the areas according to the World Tourism Organization.

 

Crisis a marker of general strategic issues for tourism

 

Although the coronavirus crisis has short-term destructive effects on the tourism industry, this pandemic episode may also be seen as the consequence of a vulnerable condition rather than the start of a period of instability.

 

Research is underway into challenging the practices of the tourism industry and is drawing attention to a succession of issues related to population movements as part of leisure activities.