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, beverage, retail, communications and transportation, contributing to drastic loss of business and lower rates of employment.
The tourism industry has faced a major blow from the pandemic due to the ban on airlines, hospitality companies, travel companies and other small-scale businesses that rely on international tourists. According to a United Nations report, the drop in international tourism could cost around USD 4 trillion to global GDP by the years 2020 and 2021. International travel bans and limited travel activity induced by the COVID-19 pandemic resulted in economic and human losses. Two out of 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 welcomed around 80 million international visitors in 2019 and the number could have been higher in 2021 had travel restrictions for visitors from the European Union, the United Kingdom, China and India not been implemented.
European economy slows due to US travel ban
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 leading long-distance receiving market in terms of number of tourist arrivals and spending. North America is the most important source market for EU countries, bringing around USD 70 billion to EU countries annually.
Of the 89 million foreign tourists in France each year, Americans make up 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, banned tourism caused losses of USD 9.79 billion in Switzerland, with US visitors contributing the largest increase. 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.
US pandemic restrictions continue to hinder business travel to European Union countries, especially Germany. Germany is one of the largest providers of foreign direct investment in the United States. However, the US administration’s decision to reinstate and tighten pandemic travel restrictions has frustrated business leaders in Germany. From experts unable to travel to help with technical issues to losing new business due to difficulties meeting with potential clients, travel restrictions are hampering business in a number of ways. While remote work solutions have been able to alleviate difficulties, routine trade visits are much needed to personally monitor US investments and jump-start economies.
The hotel industry faces the worst blow
The hospitality industry is one of the sectors hardest hit by the COVID-19 pandemic, and it is not expected to fully recover 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 State of the Hospitality Industry 2021 report from the American Hotel & Lodging Association, more than 600,000 jobs in hotel industry operations and nearly 4 million hospitality jobs have been lost due to the pandemic. While business travel has declined dramatically, the hotel occupancy rate in 2021 is expected to drop 85% compared to 2019. Post-pandemic budget hotels are expected to have the fastest return as they could tap into segments demand 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 companies that cater to various international tourists.
Aviation sector hopes international travel bans will be lifted
Aviation is the most important international industry, which has been negatively affected by repeated travel bans and lockdown restrictions, suffering billions of dollars in losses. While reductions in passenger traffic have occurred due to past incidents such as 9/11. SARS etc., the prolonged shutdown of air traffic has devastated the airline industry, bringing airports to a virtual standstill. Even as countries have moved away from lockdowns, many countries have opted for partial or full restrictive regulations during the first half of 2021. Major airlines are pushing the Biden administration to relax their COVID-19 restrictions that prevent travelers enter the US as other countries have begun to ease their bans. Since March 2020, the US has banned almost all non-US citizens from countries like the UK, South Africa, Brazil, India and Iran.
The UK is the United States’ seventh-biggest trading partner, but blocked air services between the two nations have been lifted since March 2020. The heads of British Airways and Virgin Atlantic, along with the chief executive of London’s Heathrow Airport They are pleading with US President Joe Biden to act quickly to lift the ban and save the lucrative summer air travel season between the two countries. At stake is not just the airline industry, but also hotels and other travel and tourism interests.
MICE sector with big losses
MICE (Meetings, Incentives, Congresses and Exhibitions) It is a general term used for the events industry, which positively impacts the economy of an entire city, country or region. The large international congresses increase the influx in hotels and amplify the consumption of local services. Throughout the last decades, the MICE industry has boosted the economy of many destinations until the outbreak of COVID-19, which paralyzed events and business travel. While 53% of tourists travel for pleasure or vacation, 14% travel for professional reasons but bring important economic benefits to the region.
In the US, the MICE industry provides about a million jobs in both large cities and small towns and accounts for 15% of all travel nationwide. However, Barcelona and Madrid continue to be the preferred destinations in terms of 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 receive 25 million foreign visitors for the large-scale Olympic event, for which an aggressive tourism development strategy was implemented in the city. However, the spectator ban could reduce the economic gains of the Tokyo Olympics amid the resurgence of COVID-19.
How can vaccinations affect future travel plans?
As of July 2021, more than 49.6% of the US population and 13.7% of the global population have received at least a single dose of vaccine. While the interest in getting vaccinated may vary from person to person, the desire to travel may not. According to a recent Hilton survey, about 95% of Americans miss traveling. However, the choice to get vaccinated 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 travelers to be vaccinated before visiting. Singapore has also hinted that unvaccinated travelers might have to undergo additional quarantine and testing. However, a blanket vaccination requirement would discriminate against those under the age of 18 and others who have not yet received the vaccinations. Additionally, many major airlines are awaiting government guidance to make vaccination a requirement prior to international travel. While some believe putting in a vaccine mandate could bring flyers back more quickly, others call the idea a “true logistical nightmare” given slow vaccine rollout 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 thriving, “Covid-safe” market. Additionally, hotel conferences may require participants to be vaccinated, as large numbers of people would share indoor space and meals. However, there have not yet been instructions from the government to make such a mandate.
conclusion
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. countries. Vaccinated business and leisure customers are eager to travel internationally, which could provide a big boost to the economies of the US and other countries. Now that health conditions appear to be improving in the US due to major vaccination campaigns, the restart of air services can be anticipated sooner.