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The impact of COVID-19 Pandemic on Tourism Industry: A Statistical Review in European Countries

Authors:

Abstract

COVID-19 has become a new global risk in a context that has already weaken the world economy. the COVID-19 outbreak comes on the top of a rather uncertain scenario of continued geopolitical, social and trade tensions, post-Brexit effects, and an uneven performance among major outbound travel markets. Considering the evolving nature of the situation, it is too early to estimate the full impact of the COVID-19 on tourism industry. The impact of the COVID-19 outbreak will undoubtedly be felt across the whole tourism value chain. All tourist industry is expected to be affected. This calls for support and recovery measures for the tourism sector in the most affected countries. Therefore, the purpose of this study is discussing about the impact of the COVID-19 pandemic on the tourism industry. The results of this study show that the prevalence of Corona affects income growth negatively and also the number of tourists entering the tourism industry worldwide. After SARS epidemic in 2003 and the global economic crisis of 2009, this is the biggest tangible crisis in the tourism industry, which has been introduced to three scenarios and made some special suggestions. This research has been conducted by relying on journals, historical records, newspaper articles, news press, World Health Organization (WHO) statistics and World Tourism organization (UNWTO) statistics on COVID-19 incidences in tourism. Secondary research was adopted in which secondary collected data through a comprehensive literature review.
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The impact of COVID-19 Pandemic on Tourism Industry: A
Statistical Review in European Countries
Narges Salehnia a, Seyyed Mohammad Ghaem Zabihi a,*, Khashayar Safarzaei b
a Department of Economics, Ferdowsi University of Mashhad, P.O. Box 9177-948951, Mashhad, Iran.
b Department of Economics, University of Sistan and Baluchestan, P.O. Box 98167-45845, Zahedan, Iran
* Corresponding Author: N.Salehnia@um.ac.ir.
ABSTRACT
COVID-19 has become a new global risk in a context that has already weaken the world economy. the
COVID-19 outbreak comes on the top of a rather uncertain scenario of continued geopolitical, social and
trade tensions, post-Brexit effects, and an uneven performance among major outbound travel markets.
Considering the evolving nature of the situation, it is too early to estimate the full impact of the COVID-19 on
tourism industry. The impact of the COVID-19 outbreak will undoubtedly be felt across the whole tourism
value chain. All tourist industry is expected to be affected. This calls for support and recovery measures for the
tourism sector in the most affected countries. Therefore, the purpose of this study is discussing about the
impact of the COVID-19 pandemic on the tourism industry. The results of this study show that the prevalence
of Corona affects income growth negatively and also the number of tourists entering the tourism industry
worldwide. After SARS epidemic in 2003 and the global economic crisis of 2009, this is the biggest tangible
crisis in the tourism industry, which has been introduced to three scenarios and made some special
suggestions. This research has been conducted by relying on journals, historical records, newspaper articles,
news press, World Health Organization (WHO) statistics and World Tourism organization (UNWTO) statistics
on COVID-19 incidences in tourism. Secondary research was adopted in which secondary collected data
through a comprehensive literature review.
Keywords: COVID-19, Pandemic, Tourism, Economic Shock, Global Risk
JEL classification: I10, L83, Z30
1. INTRODUCTION
The tourism industry is experiencing its worst period because of the corona prevalence in most cities of the
world, but experts believe that the same land-based industry will be the strongest option for the economy of the crooned
countries after the current crisis. There is a problem alerts that the Corona virus (COVID-19) has had fundamental
effects on economic, social, cultural, tourism, religious, political and security issues in different countries, but its
intensity and weaknesses may vary in different countries. The recession that has occurred in international economic has
not yet shown its results well. A crisis that affects the world's economy and its impact on the economy of countries is
known almost anywhere in the world and no country can solve its problems independently. One part that has been
seriously damaged is the tourism industry.
Anxiety caused by the prevalence of this virus in World (for ex. in European countries) has also affected the
tourism industry and has cancelled many domestic and foreign trips. This situation has caused a crisis in the tourism
industry along with the cancellation of most foreign tourist trips to the countries. which, in the absence of a solution,
causes concern that in addition to the disables of the country's tourism system and imposing huge costs to this industry,
the mental validity and image of all of the Worldwide and European's tourism destination will affect the minds of
domestic and foreign tourists for a long time. The other side effects such as the reduction of traffic is including hotel
industry, handicrafts, airlines and even domestic transportation system should be taken into account.
In other hand, The COVID-19 pandemic has a significant impact on tourism industry due to the travel
restrictions as well as reduction in demand among travelers. The tourism industry has been massively influenced by the
spread of coronavirus, as many countries have implemented travel restrictions and measures in an attempt to contain its
spread [1]. The United Nations World Tourism Organization estimated that global international tourist arrivals might
decrease by 2030% in 2020, leading to a potential loss of US$3050 billion [2]. In many of the world's cities, planned
travel went down by 8090% [3]. Conflicting and unilateral travel restrictions occurred regionally and many tourist
attractions around the world, such as museums, amusement parks, and sports venues closed. Because of of the
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pandemic, many countries and regions have imposed quarantines, entry bans, or other restrictions for citizens or recent
travelers to the most affected areas [4]. Other countries and regions have imposed global restrictions that apply to all
foreign countries and territories, or prevent their own citizens from travelling overseas [5].
Additionally, today the issue of tourism is one of the attractive and discussed issues among experts, students
and researchers. According to the statistics published by the World Tourism Organization, in 2017, a total of a billion
and 323 million tourists left their country to visit their desired destinations in the other countries. The numbers have
risen by about 6% for the year 2018, a billion and 400 million people. Surveys show that it will reach to a billion or 800
million tourists around the world, in 2030 [6]; [7] and [8].
Tourism industry is one of the economic sectors that can be classified under the clean industry and increases
currency revenues and plays a critical role in improving employment rate and income [9]; [10] and [11]. This industry
drives both domestic and international industries forward, because the increase in the arrival of tourists leads to work in
the aircraft, work in the hotels, English language training, work at the travel agency, Department of Foreign Affairs,
photography, tour guides, transportation, insurance, handicrafts, etc. Then, it is very important and very useful for
countries that have faced an unemployment problem. Nowadays, this industry has a prominent role in the global
economy and the majority of the world's countries are looking for increasing their share in the tourism market [8]; [12].
Together with a decreased of willingness to travel and the restrictions have had a negative economic impact on
the travel sector in those regions. A possible long-term impact has been a decline of business travel and international
conferencing, and the rise of their virtual, online equivalents [13]. Concerns have been raised over the effectiveness of
travel restrictions to contain the spread of COVID-19 [14]. The COVID-19 pandemic has not only caused a
humanitarian disaster but has also paralyzed key sectors, such as tourism. This sector was one of the first and hardest
parts of the economy that got hit. According to the World Tourism Organization [2], international tourist arrivals may
fall by between 58% and 78% in 2020.
If we want to mention some studies close to the subject, the following studies can be noted: in an article
entitled The effect of travel restrictions on the spread of the 2019 coronavirus (COVID-19) outbreak, motivated by the
rapid spread of COVID-19 in Mainland China, they applied a global metapopulational disease transmission model to
project the impact of travel limitations on the national and international spread of the epidemic. The model is calibrated
based on internationally reported cases, and shows that at the start of the travel ban from Wuhan on 23 January 2020,
most Chinese cities had already received many infected travelers. The travel quarantine of Wuhan delayed the overall
epidemic progression by only 3 to 5 days in Mainland China, but has a more marked effect at the international scale,
where case importations reduced by nearly 80% until mid-February. Modeling results also indicate that sustained 90%
travel restrictions to and from Mainland China only modestly affect the epidemic trajectory unless combined with a
50% or higher reduction of transmission in the community.
Tourism has become a major global industry with an annual average growth rate of 4-5%. It also creates 8% of
the global GDP and 10% of employment [15]. Yet it is also very vulnerable to crises of different origin such as natural
disasters, epidemics, economic crises, political crises, and terrorism [16]. Because tourism product (e.g. hotel beds,
airline seats, restaurant tables, guide services) is perishable, unlike physical goods, they cannot be saved for future use.
Past crises with few exceptions (e.g. 2009 economic Crisis) had regional impacts and their global impact on tourism
volume was limited [17] and [18]. There more, considering the speed and impact, Covid-19 is the most serious crisis
that tourism industry has ever faced. This crisis is estimated to have a seven-time larger impact on tourism than the
2009 economic Crises. The effects of Covid-19 are expected to extend for eight months and result in a decrease of 39%
in global tourism volume. Tourism industry is expected to recover to 2019 pre-crises levels not before 2023 [19].
Hence, there has been a dramatic reduction in business activity of the tourism sector, with essentially all jobs in
that sector affected, and a large number of workers becoming redundant for an extended period of time. Travel
restrictions and flight cancellations/frequency reduction have significantly diminished the supply of travel services
(both domestic and international) while demand continues to retract. The corona virus has had a bad impact on the body
of the global economy and also the tourism industry. in this research, according to easy access to information and data
required, we will be used from the set of countries selected from Europe and in the current research, our focus is on this
set of countries - as well as a number of global statistics-.
The main purpose of this study is investigating the effect of coronavirus on tourism industry. We want to see
how much corona virus statistics have pushed back tourism indicators. In other words, is corona virus in the collapse of
the world tourism economy? In the following sections of this research, we will examine Materials and Methods,
Results, discussion and Conclusion.
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2. MATERIALS AND DATA
In this research, a secondary research approach has been adopted. This research accomplished the analysis by
reviewing different papers, newspaper, World Tourism Organization (WTO) data, World Health Organization (WHO)
data etc. In the following, we explain the covid-19 gateway and the fall down in tourism industry.
2.1. Arrival of COVID-19
Source: [20]
Fig. 1. COVID-19 Case's in the Worldwide (until17 august 2020). (Color shape is only visible in the online version).
Make no mistake, Fig. 1 is not about the amount of access to healthy water or the number of newborns! Rather,
the above map is the global map involved with the unknown virus. A virus that has been a challenge and concern for
whole world, yes corona virus or the same COVID- 19. The virus that is increasing day by day on the number of
patients and victims. Besides, it is very uncomfortable, it has been a great pain due to the quarantines created on the
body of the global economy and the tourism industry. We plan to investigate the effects of the COVID- 19 on the
tourism industry, according to the statistics and estimates available, reaching to a solution to this new crisis that has
been stuck in global societies since 2019.
2.2. The Dramatic Fall in World of Tourism
In the same side, International tourism has seen continued expansion, despite occasional shocks, demonstrating
the sector’s strength and resilience and benefiting all regions in the world. according to Fig .2, International tourism has
only experienced declines in 2003 following SARS and in 2009 amid the economic and financial crisis, with strong and
rapid recovery in the following years. In follow up, the tourism sector is currently one of the hardest-hit by the outbreak
of the coronavirus disease (COVID-19), with impacts on both travel supply and demand, particularly in China, the
world’s leading outbound market in spending, and other key Asian and European destinations such as Italy [2].
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(e) Estimate
Source: [21]
Fig. 2. International Tourist Arrivals, World (% change). (Color is only visible in the online version).
As of today, factoring the SARS scenario, the size and dynamics of the global travel market, current travel
disruptions, the geographic spread of COVID-19 and its potential economic impact, UNWTO estimates international
tourist arrivals could decline by 1% to 3% in 2020 globally, down from a 3% to 4% growth estimated in early January
[21] and [22].
Therefore, regarding Fig. 2 We can see three major crises in the first decade of 2000: (a) Sept. 11 attacks in
2001, (b) SARS epidemic in 2003 and (c) Global Economic Crisis in 2009. But now and in 2019 to 2020, the world has
taken on a new phenomenon and it is COVID-19 outbreak. According to Fig. 2, it is forecasted that tourism revenues
will fall by about 3% between 2019 and 2020. That means the biggest shock in the tourism market after the 2009
economic crisis.
(e) Estimate
Source: [21]
Fig. 3. International Tourist Arrivals, world (million). (Color is only visible in the online version).
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COVID-19 crisis has caused a major drop in tourism activity around the world. Considering Fig. 3 between
2016 and early 2020, tourist arrivals were growing at around 10% per year in regions of the world. However, as the
pandemic reached the region and an increasing number of countries closed their borders in March, tourist arrivals
dropped by more than 50% in March and close to 100% in April and May 2020, in the almost all European countries.
2.3. The Dramatic Fall in European Tourism
In other Data for the European reign, according to Fig. 3, We can see that in the first 5 months of 2020, i.e.
January, February, March, April and May, and especially in March, April and May, the arrival rate of tourists decreased
significantly compared to the same amount as the previous year. The statistics are stunning, and in some countries such
as: Spain, Italy and Bulgaria, the number of incoming tourists has decreased by sometimes to 100%, which means
disaster. Notably, this list of countries has been selected due to the availability of more information from the EU
statistical database.
Why Arrivals at tourism is fallen down in Europe region? Because COVID-19 case in Europe, that's shown in
Fig. 5 is rising, day by day. This has reduced travel and tourism by about 100% in some countries, which is very
worrying.
Source: [23] and researcher calculation
Fig. 4. Arrivals at Tourist Accommodation Establishments - Monthly Data. (Color Shape is only visible in the online
version).
Source: [20]
Fig. 5. COVID-19 case in Europe (in the 14 august 2020).
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3. RESULTS and DISCUSSION
The COVID-19 outbreak is having a devastating impact on the global economy and employment. The tourism
industry badly needs vital measures to curb the epidemic, and it seems unlikely that the sector will return to normalcy
any time soon. Even after the progressive lifting of containment measures, surviving enterprises will continue to face
the challenges of a likely slow recovery. The ILO (International Labour Organization) estimates that the pandemic
could cause the equivalent of 305 million job losses [24], many of which are in the tourism sector. The pandemic and
global efforts to contain it could cause the international tourism economy to contract by between 45 and 70 percent.
Domestic tourism industries are also being influenced about half of the world’s population is estimated to be
constrained by containment measures [25]. Nevertheless, domestic tourism is expected to recover faster than the
international tourism industry [2].
Hotels, restaurants, tour operators, airlines, and cruise ships have suspended their operations indefinitely. In the
accommodation and food services subsectors, 51 million businesses are facing an extraordinarily difficult business
environment with major impacts on employment opportunities [24]. With the drastic fall in economic activity, workers
in the labor-intensive tourism industry are now facing devastating reductions in working time, potential job losses and
growing decent work challenges [24]. Own-account workers and micro-enterprises together represent nearly 60 percent
of the accommodation and food services subsectors, a reflection of their severe vulnerability to the current economic
crisis. While small enterprises around the globe play a major role as job providers, particularly in low- and middle-
income countries, they often have lack of access to credit, have few assets and are the least likely to benefit from
economic stimulus packages without targeted support.
They are now in a particularly vulnerable position as governments have mandated the closure of all non-
essential businesses and many companies have had no choice but temporarily minimize their operating costs. Costs
incurred because of the crisis may be proportionally far higher for small enterprises because of their often-limited
resources and their difficulties accessing capital. As witnessed in the aftermath of the global financial crisis, the
number of small businesses is expected to decline due to the widespread business failures in the wake of the COVID-19
pandemic. Moreover, it will take considerable time to bring back investment and business operations and as far as for
recovery is likely to be slow [24].
All the sectors on which tourism has important multiplier effects, including civil aviation, handicrafts,
agriculture, and food and beverage provision, have been profoundly affected. Flight cancellations and airport closures
have resulted in more than 10 million civil aviation sector jobs are being put on hold. Another challenge is the high
incidence of informal working arrangements in the tourism sector, due in part to its seasonality, combined with weak
regulation, enforcement and labor organization [26]. Decent work deficits, such as excessively long working hours, low
wages, lack of social protection and gender-based discrimination, are most pronounced in the informal economy.
Migrant workers, women and youngsters are more vulnerable to informal or casual employment. Employment in
accommodation and food services is at high risk, more than half workers are women. Workers who are more at risk of
disease may be seen in Fig. 6.
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Source: [24]
Fig. 6. Workers in sector most at risk. (Color Shape is only visible in the online version).
Further, the World Tourism Organization has considered 3 possible scenarios for the tourism industry. These
predictions are visible in (Table. 1) and (Fig. 8) and (Fig. 9).
Table 1. Three possible scenarios for the recovery of international tourism arrivals in 2020
Recovery scenario
Projected fall in visitor arrivals in 2020
Projected fall in Tourist reciepts in 2020
Optimistic
-58%
-62%
Base
-70%
-73%
Pessimistic
-78%
-79%
Source: [21] and researcher calculation
* Actual data through March includes estimates for countries which have not yet reported data. (Color Shape is only
visible in the online version).
Source: [21]
Fig. 7. International tourist arrivals in 2020: three scenarios (YoY monthly change, %)
Note: the scenarios presented in this graph are not forecasts. They represent alternative monthly change in arrivals
based on the gradual opening of national borders and lifting of travel restrictions on different dates, still subject to high
uncertainty.
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Source: [21]
(e) Estimate
(sc) Scenario-based data
Fig. 8. International tourist arrivals, 2000-2019 and scenarios for 2020 (millions). (Color Shape is only visible in the
online version).
Source: [21]
(e) Estimate
(sc) Scenario-based data
Fig. 9. International tourism receipts, 2000-2019 and scenarios for 2020 (U$ billion)
No matter the scenario (Each of the three items presented), tourism will see a sharp and long-term decrease in
tourism spending as this pandemic will have economic ripple effects. The purchasing power will decline significantly.
Majority of events (e.g. meetings, Olympics) have already been cancelled. The business travel will also continue to
shrink as virtual meetings and online systems started to take over. Many governments offered financial packages (e.g.
tax holidays, credit facilities, employment support) to help industry survive these difficult times. Yet, this period can
also be seen as an opportunity to fix structural problems in the industry concerning sustainability, over-tourism, climate
change, and destination governance [27].
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One might predict that the capacities will fall, the quality will be more important than quantity and the per
capita tourist spending will increase. Mass tourism will also suffer, all inclusive, open buffet systems will be replaced
with more customized and sustainable options. People are also more likely to travel less but stay more nights at a
destination. Importance of destination governance and coordinated response is also evident. This will enhance the
significance of DMOs (Destination Marketing Organization). Robots and automated systems will be employed more,
ICT and digital systems will also gain power. The room service will be more common, standards for hygiene and
sanitation will be enhanced, disposable materials will be more popular, the rooms will also be redesigned to include
portable kitchens. The sharing economy will also suffer; people will only consider professional service with proven
hygiene standards before hiring these units [28]. Importance of creating loyal clients will be more crucial for tourism
service providers as trust will play a major role in decision-making process [29].
Tours operators will also be specialized; they will host smaller groups. Nature based tours will also be more
popular. The disintermediation of brick-and-mortar travel agencies will gain pace. There will be less people willing to
go to a travel agency to book. Hence online channels will be even more important [30]. There will also be implications
for professional tour guides [31], because the group sizes will shrink the driver-guide will be more popular, particularly
for travel agencies [17].
4. CONCLUSION
At first it can be expressed the Summary of Potential Impacts in 2020: (1) 850 million to 1.1 billion fewer
international tourist arrivals, (2) US$ 910 billion to US$ 1.2 trillion losses in export revenues from tourism, and (3) 100
to 120 million direct tourism jobs at risk [2]. In this research, we sought to investigate the influence of COVID-19 on
tourism industry in the world as well as the selected countries of Europe. finally, as a result - given the content - it can
be found that the impact of COVID-19 on tourism industry is more acute than it could be supposed. therefore, the
leaders and politicians of the countries that have had high incomes from the industry have to ponder and seek solutions
to compensate the losses imposed on their tourism industry. In our argumentation, we will address some of the
suggestions that arise from this research.
As mentioned, this research is a study of COVID-19 effects on tourism industry. Tourism industry as one of
the major developing industries globally. Many countries around the world have spent a lot of money improving and
creating a variety of infrastructures for their countries' tourism industry. Now the unwanted guest who was invited to
the global economy since mid-2019 was a demotion. Because it reduced tourism revenues day by day and in 2020 in
some early months of the year, it reduced inbound Tourism by nearly 100 percent. This study provides a brief
background of the COVID-19 outbreak and examines the impact of this pandemic in the tourism industry. Therefore,
travel restriction in different countries has led to the cancellation of all air travels. This strange crisis in the second
decade of 2000 has led many people to be out of job. On the other hand, the unemployment rate has increased and also
the cost of living. Living in low-income societies is not attractive at all and public officials who are often asleep should
think here, so that they can also go to the industrial sector, especially the tourism industry, in return for packages to help
people. These support packages can include disability payment premiums, help to pay rent, support for damaged jobs,
etc.
However, the important thing that we addressed in this research was the tourism debate. What could the
governments do in the field of tourism industry? As we know, the last century is known for the century of ICT. A
century in which the digital economy and generally digital transformation is being formed and expanding The tourism
industry is also not untrusting the ICT experience. This important thing is in tourism in the form of a tool titled
Electronic Tourism. Through electronic tourism, some unseen faces of tourism resources in each country, or region can
be improved. You can also sell goods from this platform, such as handicrafts, especially in any region or country.
Perhaps this platform cannot allow handicraft workshops to be officially determined and many maples are put out of
work. Yes, tourism needs updates in different sectors. Maybe that's the question, so what about the people who were
working in hotels, restaurants, etc.? What is the task of travel agencies? You're right, but you should have planned a
flood from a long time ago. We should have been more aware to be hit again like The SARS in the world of tourism.
Now that the opportunity is available, the infrastructure should be provided for obtaining an optimized experience of
virtual tourism and also the field of sending the goods in need of tourists from one country to another. This discussion
requires a specialized look and formation of special working groups. But as a suggestion, it was expressed in the context
of this study.
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