Arab News, Wednesday, Jul 8, 2020 | Zul Qaadah 17, 1441
Tourism: One of the sectors hardest hit by COVID-19
As Dubai opens its doors to foreign tourists, this is as good a time as any to look at the importance of tourism for the global economy.
Tourism is big business. For some economies, it is a major part of their GDP. According to the World Travel and Tourism Council, in 2019 tourism contributed 30 percent to Cambodia’s GDP; 25 to that of Thailand; 20 percent to Greece; 15 percent to Austria; 12 percent to Spain; 11 percent to Tunisia; and 11.5 percent to Dubai. In 2018, Hajj and Umrah contributed $20 billion — between 2 to 3 percent — to the Saudi economy. Vision 2030 counts on tourism to diversify the economy away from the Kingdom’s dependence on oil. The megacity of Neom is one example of a project that is working toward this end.
The coronavirus disease (COVID-19) pandemic, however, has wreaked havoc across the tourism sector. The airline industry is expected to lose $84 billion in 2020. According to the International Air Transport Association (IATA), air travel dropped by 94 percent in April 2020 compared to the previous year. It is recovering gingerly, but IATA believes it may take years before rebounding completely. This is no wonder, considering the restrictions imposed on travelers, such as wearing masks and undergoing medical tests. On top of that, there is the uncertainty regarding a second wave of outbreaks, which could lead to borders closing again, complicating travelers’ return flights home or subjecting them to quarantine upon arrival.
Even if borders open again, it will not be easy for airlines, hotels and restaurants. They will have to operate at a very limited capacity due to the new sanitary and social distancing rules. It will prove difficult to be profitable under these circumstances. It will certainly result in many people, especially lower-paid workers like servers, losing their jobs. If the airline industry in Europe and the Middle East is anything to go by, the situation seems bleak; more than 60,000 employees have lost their jobs in those regions over the last few months.