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Mothballed Delta Air Lines planes parked at Kansas City International Airport in Missouri. AP Photo/Charlie Riedel

Global tourism industry may shrink by more than 50% due to the pandemic


Due to the coronavirus, people around the world have canceled their travel plans. Governments and health officials have warned the public to avoid boarding cruise ships and long flights. Major events like conferences, trade shows and the Olympics have been canceled or postponed.

As a result, many businesses in the travel and tourism industry are likely to find themselves in jeopardy.

Predicting the economic impact of the coronavirus right now is akin to participating in a running competition without knowing how long the course is. However, a few things are already clear.

Our study

We conducted a study during the third week of March with more than 2,000 travelers from 28 countries. Via Amazon Mechanical Turk, we asked respondents about their travel behaviors during the pandemic.

Our study showed that 63.8% of the travelers will reduce their travel plans in the next 12 months. More than half canceled their business travel immediately due to the coronavirus.

Results of our study predict that, compared to last year, the travel industry, which includes businesses such as airlines, hotels and restaurants, will shrink by 50% in 2020, which would mean a significant loss of jobs and revenue.

The number of international travelers could shrink from 1.4 billion to fewer than 1 billion people. That would be the first time the international traveler number has fallen that low since 2015.

We also asked respondents to rate their perceived image of China and Italy, two of the countries hardest hit by the pandemic. Interestingly, U.S. travelers’ image of China and Italy has deteriorated. The image of China was damaged most significantly, as some people blame China for the spread of the virus.

However, we expect that this image may recover soon, as research shows that travelers have a short memory about the negative aspects of a destination after a disaster.

A board listing arrivals lists a number of canceled flights at Seattle-Tacoma International Airport on April 15. AP Photo/Elaine Thompson

Sizing up the impact

The travel industry has faced many challenges in the past, including the 9/11 attacks and the Great Recession, but none are similar in magnitude to the coronavirus. For example, the travel industry shrank by 31.6% after 9/11.

In the U.S, the travel and tourism industry generated US$1.6 trillion in 2017 in economic output.

A study from Tourism Economics, a company that consults in the tourism sector, predicts that the U.S. tourism industry will lose at least $24 billion in 2020, thanks to a widespread loss of spending at restaurants, hotels, theme parks and more.

The World Travel and Tourism Council, which represents the global private sector of Travel & Tourism, predicts up to 50 million jobs in the global travel industry could be lost.

While the economic impact of the coronavirus is significant, its impact on people’s social interaction, too, will likely be felt for years to come.

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