Consumers Will Feel the Travel Sector’s Economic Pain
Throughout this relentless pandemic, one of the most risky and largely off-limits things to do has been to travel. Countries around the globe implemented restrictions, and though many are lifting them as we steer toward a full reopening, the damage that the travel and tourism industry has sustained is devastating. Even once the world goes back to “normal,” it will be a while before the once-booming sector is up and running at full capacity. It may be even longer before it’s powering the economy like it has in the past.
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A new report from the World Travel & Tourism Council found that in 2019, the travel and tourism sector pumped 10.4% into global gross domestic product and provided some 334 million jobs. In 2020, the category contributed just 5.5% to global GDP and 62 million jobs were shed. International travel took the brunt of the beating, with spending there declining by 69.4%, but domestic travel was hardly spared, with spending declining by 45%.
“It’s worse than anyone could have expected,” Dr. Terika Haynes, owner of Dynamite Travel, said of the brutal 2020 declines. Gabe Saglie, senior editor at Travelzoo, told GOBankingRates, he more or less agrees.
“These numbers are, indeed, staggering, and they quantify the feeling those of us in the travel industry have had in the last year,” Saglie said. “The precipitous drop in travel spending and steep surge in unemployment within the industry will be chasms that will be made up over the next several years — yes, those gulfs will be filled, but it’ll simply take time to make up these types of unprecedented numbers.”
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Now, you may be reading this and thinking, “Bummer! Good thing there’s reason for hope this year!” And there is, with Saglie sharing that the spirit of optimism is high in the industry right now. Haynes says that “we can expect to see jobs in the hotel and theme park sectors increase” and that so far, “2021 is looking better than most of 2020.”
But a promising future for the travel and tourism industry doesn’t mean that the dramatic losses that all but wiped out the sector won’t haunt your upcoming travel plans — particularly where your wallet is concerned.
“To the average consumer, they will not understand the effects until they begin to travel again and see increases in prices from companies who will be looking to recoup what has been lost,” said Haynes. “As demand increases we can expect for prices to also increase, not only because of limited availability, but because of those in the travel industry who will be looking to stay afloat and recuperate from major losses.”
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Saigle is already seeing the costs of travel increase as demand for travel grows.
“We are seeing prices surging for travel from Memorial Day weekend onward, as compared even to prices we were seeing just last quarter, but, historically, they continue to represent bang-for-the-buck opportunities,” said Saigle. “Coupled with the fact that many Americans who did not travel last year feel more emboldened to spend a bit more this year.”
Additionally, there may be complications for the travel and tourism industry around replenishing its workforce, which could slow down its recovery.
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“Hospitality workers in hotels and restaurants were the first to lose their jobs and these jobs are now returning the fastest,” said Clayton Reid, CEO of MMGY Global. “But visa requirements, the long-term loss of immigrant labor and training/certification challenges are making full-scale employment difficult in the immediate future. Airlines are scrambling to recertify crews and maintenance staff while cruise lines are working to bring back their global workforce.”
Another snafu is the fact that this pandemic isn’t over. Although the U.S is rapidly progressing in its mission to vaccinate citizens, many other countries aren’t moving as quickly. Meanwhile, there are valid concerns around a potential fourth wave of COVID-19. Things are improving, but we’re still trapped in the chaos of the unknown, and that’s impacting the travel and tourism industry.
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This article originally appeared on GOBankingRates.com: Consumers Will Feel the Travel Sector’s Economic Pain
