Michael Shoory, Senior Economist
Michael is currently conducting economic impact analysis and custom research projects.
COVID-19 Outlook and Pandemic Impacts
Travel and Tourism | Global
The outbreak of COVID-19 (the official term for the novel Coronavirus) has become markedly worse in the past month, with the virus spreading more widely and rapidly than was originally anticipated. This has led the World Health Organisation to classify the outbreak as a pandemic. In response, countries around the world have implemented various measures to reduce contagion, including travel restrictions and event cancellations. In addition to enforced restrictions, the appetite for travel in general has weakened, leading to the delay or cancellation of planned trips and aversion to new travel.
Alongside these developments, the outlook for global travel has deteriorated significantly since Tourism Economics’ global travel forecast update in late February. As discussed in the research brief COVID-19: Updated outlook and pandemic impacts, Tourism Economics projects that global tourist arrivals will fall by at least 10.5% in 2020 relative to last year – an unprecedented decline and equivalent to 155 million fewer arrivals. This baseline projection assumes the outbreak is contained within 5 months in affected countries (including China, Italy, South Korea, Japan and the US) and global travel recovers fully by 2022. The Asia-Pacific region is expected to experience the most severe downturn, followed by the Americas and Europe.
As large as this decline may be, we believe there are significant additional downside risks to the 2020 outlook. Travel restrictions are being tightened in affected countries – and introduced in new countries – on an almost daily basis. As such our downside scenario is appearing increasingly likely – under this framework, global arrivals would fall by 17.9% in 2020 (263 million fewer trips) relative to 2019. However, in this scenario we nonetheless expect a rapid recovery once the situation has stabilised, with a full recovery by 2023, owing to the resilience global travel has shown in previous downturns. Tourism Economics will continue to monitor the situation and provide updated forecasts as is necessary.
