Former Spirit Airlines CEO Ben Baldanza argues for cheaper carriers that “more of a kind of leisure traffic” can be “more aggressive in this environment” and “get a share” because of their business models.
The prospect of a rebound this year has faded after the global pandemic plagued the industry and plagued tourism-dependent economies, with travelers postponing plans amid vaccine delays and border restrictions.
Tourist destinations from Thailand to Iceland hoped that Covid-19 vaccines would enable countries to reopen their borders and bring about a much-needed recovery in 2021. Now, with the rollout of vaccines in some places and new virus strains appearing, it seems more likely that international travel could come to a standstill for years.
After the United Nations World Tourism Organization declared that 2020 was the worst year for tourism on the record, with one billion fewer international arrivals, the prospects for a 2021 rebound worsened. In October, 79% of experts surveyed by the agency believed a setback in 2021 was possible. Only 50% said they believe this in January, and about 41% did not think travel would reach pre-pandemic levels by 2024 or later.
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James Sowane, a transport company that takes care of tourists in Fiji, convened a staff meeting earlier this month and told employees to look for other jobs. He recently used a government aid program and brought back a number of laid-off workers, who are optimistic that vaccines could cause travel resistance as early as April.
But now Mr. Sowane not that tourists will not return until next year, and he and his wife can not afford to keep paying wages at their business, Pacific Destinations Fiji. He borrows from his bank to keep some core workers.
“The hardest thing is to look them in the eye,” he said. Sowane said. “You see their wife and their children and their husbands because we know them so well.”
Prior to the pandemic, travel, tourism and related businesses accounted for 10% of the world economy, and one in ten jobs, according to estimates by the World Travel & Tourism Council. Many places, from the Pacific Islands to Macau to Greece, were even more dependent on tourism than that.
“People will not work anymore,” said Ross Dowling, an honorary professor of tourism at Edith Cowan University in Australia. “They are not going to survive if they can not adapt, and no degree of resilience is going to spend you another year.”
Reykjavik, the capital of Iceland in the winter view from above (iStock)
As of Feb. 1, airline tickets issued for international travel over the next six months were 15.5 percent of what they were in 2019, about 2 percentage points compared to Jan. 1, according to travel analysis firm Forward Keys. According to data firm Cirium, this month’s levels are up nearly 50% worldwide compared to February 2019, with some markets up around 90%.
In the US, demand for hotels after 2023 is not predicted to fly again until 2019; camp prices will only recover by 2025, according to a joint forecast by hotel data firm STR and Tourism Economics. Gross travel bookings in the US, including hotels, airline tickets and car rentals, are expected to be below 2019 levels in 2024, estimates research firm Phocuswright. It is predicted that recovery in Europe will be even slower.
“Vaccines were expected to be the great panacea,” said Charuta Fadnis, who leads Phocuswright’s research team. But according to current vaccination figures, less than 20% of the world population will be vaccinated this year, according to recent estimates by UBS. “We expect governments to be careful when reopening borders,” she said.
Some destinations that are popular with local travelers are hopeful that the visits by locals will reduce the chance. But while it helped Europe last summer, it is unclear whether governments will ease restrictions like last year, a move that has contributed to the continent’s hard-fought second pandemic.
Temporary changes in the industry can be started permanently. Airline and shipping operators called planes and ships with moths, firing or sinking tens of thousands of people worldwide. Some hotels have closed to save cash until more customers return. Workers are looking for new occupations.
In Angkor Wat, an ancient temple complex in Cambodia, Sam Sophea arranged up to 150 tours per month during the high season. Now Mr. Sophea, who lives with his wife and two sons, is unemployed.
Tourists visit the Grand Palace in Bangkok on 24 May 2014. (Reuters / Erik De Castro)
The number of foreign visitors to Angkor Wat decreased by 82% last year and was 99.5% lower last month compared to January 2020, according to the ticket office of the website. Mr. Sophea is considering buying a truck to transport gravel for new roads, though he plans to drive with his nephew first to see if it is too physically demanding.
“I feel a little sad, a little stressed,” he said. Sophea said. “I hope the tourists will come back.”
In Spain, where travel and tourism previously accounted for about 14% of gross domestic product, one of the highest percentages in the developed world, the economy shrank by 11% last year – the biggest drop in the eurozone. International arrivals fell by more than 75% in 2020. The government has pumped billions of euros into the economy and protected jobs through further programs, but these efforts may soon end.
While the Spanish central bank predicts 6.8% growth this year, it does not expect the economy to reach its middle before 202023 before the pandemic, about a year later than the overall eurozone. Spain will partly recover more slowly as it will take time for tourism to come back, a central bank official said recently.
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The travel industry wants to speed up the recovery with so-called vaccine passports, including smartphone apps that travelers use to notify governments of their vaccination status so they don’t have to go into quarantine. Airlines and airports test different systems.
However, the government’s reactions were mixed. British officials have ruled out a European vaccine passport, saying it is unclear whether vaccines are effective in stopping the transmission of the virus, and that it is possible to get people to travel based on whether they have been vaccinated. However, Denmark intends to issue one by the end of the month.
It is also not yet clear when people will feel comfortable traveling again. Becky Wentland, a high school teacher in Southern California, has no plans to fly inland before her family is vaccinated. Before going abroad, she waits for the Covid-19 infection rates to drop significantly and keeps an eye on the possible vaccine-resistant strains.
Her family would have traveled to Europe this summer had it not been for the virus. Last year, they canceled a trip to Japan. A trip to Peru has been postponed until June, but will probably be pushed back again.
“I like to travel, but it was not sad for me,” she said. Wentland said. “Travel is a total luxury and I will never lose perspective on how awful things are right now.”
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Some businesses and countries are confident that the pent-up demand will eventually lead to a boom. Minor Hotels, which is based in Thailand but manages hotels worldwide, continued to expand during the pandemic, adding hotels in Europe and opening new properties in Dubai and the Seychelles, he said.
In Iceland, authorities used the time without foreign visitors to improve the country’s tourism infrastructure. A few months ago, Iceland completed a road in the less visited north of the country that connects tourist sites, including waterfalls and its oldest settlement.
Early in the pandemic, Elias Gislason, director of quality and development at the Icelandic Tourism Board, thought that tourists would return by late summer last year. Now he expects Iceland to receive about a third of the normal number of visitors this year, with a full recovery in 2023.
“The truth is, no one knows for sure,” he said. “It all depends on how vaccinations go.”