The future of the tourism industry (aka #52)

The night before 9/11, I must have fallen asleep with the radio on, because I woke with vivid images in my head of what I assumed was a nightmare. “Planes crashed into buildings in New York,” I sleepily recounted to my mother over breakfast, “and they stopped all planes from flying.” She laughed at me. “They would never do that, it would be too expensive.” And then we turned on the TV.

19 years later, I was on a mad dash back from visiting my relatives in New Zealand. As the New Zealand lockdown began. And then the Australian lockdown. And then the British lockdown. I ended up on one of the last planes back across the world, as borders were closing and airlines were suspending routes. I watched the frantic faces of airline staff and passengers alike, not knowing how long this new reality would last.

And while the restrictions have had the desired affect on our health (researchers predict that, in their absence, COVID-19 could have killed 40 million people), they are having a devastating effect on our economy. The International Monetary Fund (IMF) has estimated a global contraction of three percent in 2020.

The tourism industry will see the biggest losses. The COVID-19 pandemic is predicted to cut travel by 25 percent in 2020, and cost more than 75 million jobs. Hotels, airlines, and cruise lines have been devastated by the global lockdown. Experts predict it could take nearly a year for the industry to recover.

Which raises an interesting question. The tourism industry must be restored. It is responsible for at least one in every ten formal jobs in the world, accounting for 10 percent of global GDP. The financial impacts of its loss are devastating, particularly for the millions of migrant workers who toil in the sector. But does it need to be restored exactly the same?

Before COVID-19, two downsides of the industry were looming large: the environmental impacts of increased travel, and the working conditions of those people who worked to sustain it. This near halt on travel may provide much needed time to reshape the industry in a more responsible and ethical way, perhaps driven by consumer demands. We may choose fewer, longer, and closer vacations. Maybe they will be land-based, or on airlines that supported their staff through this ordeal. We may extend labour inspection capacity, to reduce exploitation, and reward suppliers who pay living wages.

Of course, none of this may happen. The borders may re-open, and people may flood to the destinations withheld from them for months. But we can do better.

By Helen Dempster. This is a short summary of a forthcoming CGD working paper on these issues — stay tuned!