Harvard

The World Needs a Vacation: How Covid-19 Created a Crisis in the Global Tourism Economy

Published on 19 April 2021

In Seychelles, a group of islands off the coast of East Africa that serves as home to just under 100,000 people, tourism comprises around 60% of the country’s 1.7 billion USD Gross Domestic Product. This relatively high proportion of tourism revenue makes Seychelles third in the world in terms of tourism’s contribution to GDP, meaning the archipelago was especially hard-hit when the Covid-19 pandemic deterred would-be travelers from visiting (1).

Expectedly, the impact of the pandemic on Seychelles’ economy was devastating; in July of 2020, Airshare reported that the Seychelles rupee had depreciated 20% against the U.S. dollar despite stability for years (2). A few weeks earlier, the country had also received a $15 million dollar loan from the World Bank as part of a larger effort to help pay salaries for and provide an income to some of the world’s most economically at-risk (3).

The contraction in tourism-related economic activity caused by Covid-19 isn’t just limited to the situation in Seychelles — in October 2020, the World Travel and Tourism Council reported that 174 million jobs globally were at risk because of barriers to travel due to the pandemic specifically. These job losses disproportionately impact young people, women, those in rural communities, indigenous peoples, and informal workers, all of whom are representative of the groups most likely to be employed by the travel industry or small tourism businesses (5).

Tourism’s importance to the global economy is not easily overlooked. According to the United Nations, the tourism industry employs approximately 10% of workers across the world, and global prohibitions on travel have been extremely damaging to this demographic. In 2020, $320 billion dollars in tourism exports were lost due to reduced travel, and the long term impacts are still impossible to ascertain. Secretary-General of the United Nations Antonio Guterres said in a statement that many countries also depend on tourism dollars for other reasons.

“Tourism is also a key pillar for the conservation of natural and cultural heritage,” Guterres said. “It is imperative that we rebuild the tourism sector,” (5)

However, when faced with two simultaneous pandemics, one health and the other economic, it is exceedingly difficult to bolster one without compromising the other. While those of minority backgrounds are arguably the most economically-vulnerable due to their proximity to industries related to tourism, at least in the United States, they are also the most susceptible to infection due to factors such as preexisting conditions and the high-exposure nature of their work. To use the example of Hawaii, where Native Hawaiians and Pacific Islanders often work front-line jobs that are both directly and indirectly related to the travel industry, they also have the highest rate of Covid-19 positive cases (6).

With several versions of the Covid-19 vaccine making their way through the public, travel guidelines across the world have been changing. In January, Seychelles became the first nation in Africa to launch a mass-vaccination campaign, with plans to be the first country in the world to vaccinate 70% of its adult population (7). Beginning March 25, the Seychelles Ministry of Foreign Affairs and Tourism announced that the country will be reopening to visitors from across the globe, who need only present a PCR test negative for Covid-19 taken 72 hours prior to entry. This is not simply a sign that the pandemic is near its end, however—as of March 12, the CDC has declared that the number of Covid-19 cases in the country remain too high to encourage travel (8).

The ongoing situation in Seychelles is indicative of what the near future will look like as we pass the one-year mark since the pandemic swept across the world. One of the main things to recognize is that the vaccine will not change everything. Even in places with relaxed reopening rules like Seychelles, masks and social distancing requirements are likely to remain the norm for at least the next few months. However, some lasting change is still possible. Specifically, the pandemic has exposed many of the inequities that exist across the world, including the ones that have put low-income, minority, and indigenous people who work in the tourism sector in such a tight spot over the last year. Recovery from this pandemic will likely come in many forms, but one that will make a huge impact is increased support for those that are in the most vulnerable positions worldwide.

Sources

The World Needs a Vacation: How Covid-19 Created a Crisis in the Global Tourism Economy

Examining the U.S. Response to Covid 19: An Externalities-Based Approach

Renewable Energy Investing: How Investors Can Maximise Returns Whilst Saving the Planet

The Impact of Pedestrian-Friendly Urban Planning on Communities

Investing in America’s Economic Health Through Broadband Equity