Since March 2020, the US government has banned international travel to contain the spread of the coronavirus. The unprecedented loss in the travel and tourism sector negatively affected other sectors closely linked to it, such as food, beverages, retail, communications and transportation, contributing to a drastic loss of business and a decrease in employment rates. .
The tourism industry faced a major blow from the pandemic due to a ban on airlines, hospitality companies, travel companies and other small-scale businesses that depend on international tourists. According to a United Nations report, the drop in international tourism could cost around $ 4 trillion to global GDP by 2020 and 2021. International travel bans and limited travel activity induced by the COVID-19 pandemic resulted in economic and human tolls. Every two out of every five jobs lost in the US due to the pandemic were lost in the travel, tourism and aircraft manufacturing sectors. Current estimates suggest that the employment rate in the tourism sector is not expected to return to the pre-COVID level before 2024 or 2025.
The world’s leading hotel chains, including Wyndham Worldwide, Choice Hotels, Marriott International and Hilton Worldwide Holdings, lost $ 14 billion in revenue due to travel restrictions. The United States received around 80 million international visitors in 2019 and the number could have been higher in 2021 if travel restrictions were not in place for visitors from the European Union, the United Kingdom, China and India.
The European economy sank due to a travel ban to the US.
The unprecedented phenomenon of non-arrivals from the US is seriously affecting the European tourism industry. Europe is the main tourist destination in the world, where one in ten companies belongs to the tourism industry. The hospitality sector represents 80% of the EU tourism workforce and 2 million companies. According to the European Commission, the US is Europe’s main long-distance receiving market in terms of number of tourist arrivals and spending. North America is the most important source market for EU countries, contributing around USD 70 billion to EU countries annually.
Of 89 million foreign tourists in France each year, Americans account for about 8%, while 6 million of the 37 million foreign tourists in Germany are Americans. In Spain, the tourism sector constitutes around 12% of the country’s GDP. In the three months from May to June 2021, prohibited tourism caused losses of $ 9.79 billion in Switzerland, where US visitors contributed the largest rebound. The European Tour Operators Association (ETOA) is finding a solution to welcome non-essential travelers from the US to avoid losing billions again in 2021.
Pandemic US restrictions continue to hamper business travel to European Union countries, especially Germany. Germany is one of the largest providers of foreign direct investment to the US However, the US administration’s decision to reinstate and tighten pandemic travel restrictions has frustrated Germany’s business leaders. From the inability of experts to travel to help with technical problems to the loss of new business due to difficulties in meeting potential clients, travel restrictions are hampering business in a number of ways. While remote work solutions have been able to alleviate difficulties, routine business visits are much needed to personally monitor US investments and jumpstart economies.
The hospitality industry faces the worst hit
The hospitality industry is one of the sectors hardest hit by the COVID-19 pandemic, with a full recovery not expected until 2024. Many of the US hotels are closed, especially luxury ones due to low traffic while others have. an occupancy rate as low as 15%. According to the American Hotel and Lodging Association’s State of the Hotel Industry 2021 report, more than 600,000 jobs in hotel industry operations and nearly 4 million jobs in the hotel sector have been lost due to the pandemic. While business travel has dropped dramatically, the hotel occupancy rate in 2021 is expected to drop 85% compared to 2019. After the pandemic, budget hotels are expected to have the fastest return, as they could take advantage of demand segments that remain relatively healthy despite travel restrictions. Since international tourists tend to stay longer in hotels and spend more money on the services offered than domestic visitors, the international travel ban is having a severe impact on hotel businesses that cater to several international tourists.
The aviation sector expects international travel bans to be improved
Aviation is the largest international industry, negatively affected by repeated travel bans and lockdown restrictions, suffering billions of dollars in losses. While there have been reductions in passenger traffic due to past incidents such as September 11. SARS, etc., the prolonged shutdown of air traffic has devastated the airline industry, virtually paralyzing airports. Despite countries moving away from blockades, many countries have opted for partial or full restrictive regulations during the first half of 2021. Major airlines are pressuring the Biden government to relax its COVID-19 restrictions that prevent it from Travelers entering the US Other countries have begun to relax their bans. Since March 2020, the US has excluded nearly all non-US citizens from countries such as the UK, South Africa, Brazil, India, and Iran.
The United Kingdom is the United States’ seventh-largest trading partner, but blocked air services between the two nations have been phased out since March 2020. The directors of British Airways and Virgin Atlantic, along with the CEO of London Heathrow Airport, They are pleading with US President Joe Biden to act swiftly to lift the ban and save the lucrative summer air travel season between the two countries. Not only the airline industry is at stake, but so are hotels and other travel and tourism interests.
MICE sector with huge losses
MICE (Meetings, Incentives, Conferences and Exhibitions) is a general term used for the events industry, which positively impacts the economy of an entire city, country or region. Large international congresses increase the influx of the public in hotels and amplify the consumption of local services. Over the past decades, the MICE industry has driven the economies of many destinations until the COVID-19 outbreak, which halts events and business travel. While 53% of tourists travel for pleasure or vacations, 14% travel for professional reasons but bring significant economic benefits to the region.
In the US, the MICE industry generates about one million jobs in large cities and small towns and accounts for 15% of all travel across the country. However, Barcelona and Madrid remain the preferred destinations for business tourism. Since only a few countries are reopening the MICE sector, most countries are focusing on national conferences and exhibitions. For example, the city of Tokyo is expected to host 25 million foreign visitors for the large-scale Olympic event, for which an aggressive tourism development strategy was implemented in the city. However, a spectator ban could reduce the economic gains of the Tokyo Olympics amid the resurgence of COVID-19.
How can vaccines affect future travel plans?
As of July 2021, more than 49.6% of the US population and 13.7% of the world’s population had received at least a single dose of vaccine. While the interest in getting vaccinated may vary from person to person, the desire to travel does not. According to a recent Hilton survey, about 95% of Americans miss traveling. However, the choice to vaccinate or not could affect future travel plans.
While no country has made the vaccine a mandatory requirement, countries with strict border restrictions and low rates of COVID-19, such as New Zealand, may require that travelers get vaccinated before visiting. Singapore has also hinted that unvaccinated travelers may have to undergo additional quarantine and testing. However, a general vaccination requirement would discriminate against those under the age of 18 and others who have not yet received their vaccines. Additionally, many of the major airlines are awaiting government guidance to make vaccination a requirement prior to international travel. While some believe that imposing a vaccine mandate could make fliers come back more quickly, others consider the notion a “real logistical nightmare” given the vaccine’s slow implementation rates.
The hotel industry could consider requiring guests to be vaccinated once international travel bans are lifted. Any major hotel brand that takes this stance could appeal to the prosperous and “Covid-safe” market. In addition, hotel conferences may require vaccination of the participants, as a large number of people would share the interior space and meals. However, there have still been no instructions from the government to make such a mandate.
Conclution
Connectivity between the US and the UK is one of the great engines of the global economy and the ban on transatlantic travel and trade is putting jobs, livelihoods and economic opportunities at risk in all countries . Vaccinated business and leisure customers are eager to travel internationally, which could provide a huge boost to the economies of the US and other countries. Now that health conditions appear to be improving in the US Due to major vaccine inoculation drives, the restart of air services can be anticipated sooner.