The World Tourism Organization (UNWTO) estimates that it could take between two and a half to four years for international tourism to recover to 2019 levels due to the covid-19 pandemic.
By comparison, it took 11 months for international arrivals to recover after the SARS epidemic of 2003, 14 months after the September 11attacks of 2001, and 19 months after the global economic crisis of 2009
Global international travel arrivals declined by over 65% y-o-y over January to June 2020, translating into a loss of around USD460 billion in total world export revenues from international tourism(Chart 8).The Asia Pacific region was hardest hit with tourist arrivals falling by 72% in the first half of this year. Based on current trends, the UN World Tourism Organization (UNWTO) expects global international tourist arrivals to decline by around 70% y-o-y in 2020.
As at September 1, 2020, 182 economies were implementing some form of international travel restriction, including screening arrivals and quarantine requirements. Tourism and business travel, which together comprise nearly one-quarter of global services trade, have largely ground to a halt thanks to global travel restrictions.
Over 100 of these economies have banned arrivals from some or all other regions. Economies such as Thailand, Australia and New Zealand that are highly reliant on tourism revenue and continue to maintain relatively stringent travel restrictions are likely to experience a prolonged downturn in their services exports. Thailand welcomed nearly 40 million tourists last year but closed off its border to foreign tourists amid the current pandemic. As a result, international visitor arrivals to Thailand plummeted earlier this year and remained at zero from April through to August 2020.
Similarly, Malaysian tourism arrivals declined from 6.7million in Q2 2019 to under 20,000 in Q2 2020.International arrivals into New Zealand, Australia and Singapore have also largely ground to a halt due to border closures.
Although economies most reliant on tourism revenue are likely to see the sharpest rebound in services trade growth once travel restrictions are lifted, the actual level of travel services exports is unlikely to return what it was pre-COVID for a long time. Moreover, the intangible nature of services means that catch-up demand is harder than it is for goods.
For example, even once travel restrictions do lift, people are unlikely to go on significantly more overseas holidays to make up for lost trips this year. There is also a risk that people may be hesitant to travel abroad once restrictions are lifted, affecting those economies most reliant on tourism flows.
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