Travel Industry During the Pandemic

The COVID-19 pandemic has affected the travel industry worldwide, perhaps even more than other industries such as gaming or health and beauty. Travel, tourism, and hospitality industry have been decimated by the effects of the coronavirus crisis. In the pre-pandemic world, we have enjoyed easy and affordable travel fueled by the technology and transportation revolution. Now, the industry can’t seem to recover and the losses are happening as fast as the virus spreads. The global travel industry is experiencing massive job and income losses. According to McKinsey, global tourism is expected to have a cumulative drop of $3 trillion to $8 trillion, before the situation gets stable and back to pre-pandemic expenditure levels. Also, recovery to 2019 levels may be as late as 2024. With such a huge surge in travel expenditures, an increasing number of companies are affected worldwide and struggling to keep their head above water. Let’s take a look at the travel industry landscape during these difficult times.

With countries and governments being focused on fighting the virus, an increasing need of rebuilding the economy was created. With such a large number of companies and industries being affected, the question of future recovery arises.  What will be the factors that will determine the healing of the travel industry worldwide?

Travel sentiment has worsened

When it comes to travel, emotions play a vital role. Our destination choices, preferred means of transportation and the nature of the trip are largely impacted by how we feel. Coronavirus Travel Sentiment Index Report stated on December 7, 2020, that only 52% of the respondents said they are in a travel readiness state of mind. The current state of the pandemic caused that only 46% of people consider travel activities as generally safe. Fear, uncertainty, and health concerns are now deeply trenched in people’s minds. The main factors causing the travel sentiment to worsen are travel restrictions, slow virus containment, and low consumer confidence among others.

The future period will be challenging in the terms of reassuring people that travelling is safe. This process will be long and slow. However, there are quite a few initiatives that have the goal of sparking up people’s sense of wanderlust. It is believed that with the right message, it is possible to resume the demand for travel and start the healing of the travel sector.

Regional impact

Statistics by the World Tourism Organization show that different regions of the world were impacted differently by the crisis. The first regions of the world which suffered the impact of the pandemic were Asia and the Pacific. These regions had a 79% decrease in arrivals in January-August 2020. Also, Africa and the Middle East saw a 69% drop in the same period, while Europe recorded a 68% drop and the Americas 65%. Since the world regions were impacted differently, different strategies will be needed in order to get the industry back on track and start regaining momentum.

One of the activities recommended by the World Tourism Organization to boost tourism globally is to boost competitiveness and build resilience by promoting domestic and regional tourism where possible. In order to create a resilient travel industry, we need to turn to sustainable solutions, inclusive economy, and green solutions. This way, travel, hospitality, and tourism will be built upon a foundation that is stable, sustainable, and more resilient to changes.

The survival of small businesses is at risk

With high degrees of fragmentation and diversity, the travel industry is deeply affected by the pandemic. Some of the sectors were impacted more than others. A survey of SMEs conducted by the OECD (Organisation for Economic Co-operation and Development) found that one-third of SMEs (in all sectors) feared that they might be out of business within one month. Also, there was a serious risk that up to 50% of SMEs would not survive for more than 3 months. Imposing new safety measures happens almost constantly, and businesses are struggling to keep up. Health protocols, restricted capacity, and sanitary situations are all changing the way that travel companies are operating on a daily basis.  

The spread of the coronavirus affects the SME sector both on the supply and the demand side. From the supply side, companies experience a lower supply of labor, since many workers are forced to take sick leave in order to get better or take care of their family members. Also, because of the travel restrictions, supply chains are interrupted causing the lack of needed goods and services. From the demand side, there is a dramatic loss in travel demand and revenue. All these factors create a spill-over into other economic sectors, and it’s difficult to be stopped.

Airline industry suffers the most

Since international travel has seen the most restrictions, the airline industry has experienced some major losses. With people being prevented from travelling abroad, the use of air transportation was severely reduced. Facing the crisis, different international carriers had less than two months of cash on hand on average to cover the expenses before the coronavirus outburst. In contrast, Apple has enough cash to cover six years of expenses.

IATA (The International Air Travel Association) estimated that the global air travel industry revenue will drop $252 billion. Compared to the 2019’s numbers, that’s a downturn of 44%. The largest loss in revenue was seen in the Asia Pacific, which has an astonishing loss of $88 billion compared to 2019. Europe doesn’t fall behind either, with a loss of $76 billion in the same period.

Since the pandemic had a global impact, the whole aviation industry is affected. However, some relief is expected in the form of government aid packages. The airline industry affects many other fields, and the pandemic has caused people’s jobs to be at stake. Canceling almost all flights in order to control the spread of the virus has affected the airline industry on a global level. According to Statista, in October 2020 the number of scheduled flights globally has decreased by 46,4% compared to the same period last year. Also, there were some cross-country variations. In Italy, the decline in the number of passenger flights was an astonishing 98% year-on-year. The pandemic crisis is argued to be the worst in the history of the aviation industry. Some restructuring is necessary in order for the industry to move forward. For example, Turkish Airlines have made 90% more revenue from cargo, fulfilling the increasing demand for different international commodities.

A need for rebuilding the industry

Tourism is one of the vital industries of the world’s economy, providing a livelihood for hundreds and millions of people and families. That is why it is crucial to rebuild the tourism sector, in order to regain stability and much-needed income. According to Statista, the pandemic could set tourism back by $1 trillion in 2020, which would set the industry back by 20 years

In order to get the tour back on track, it’s crucial for the people to be and feel safe towards travelling. Companies, governments, and organizations are upon a challenge to rebuild the industry in order to assure tourists it’s safe and harmless to travel. The current global situation shows an extensive amount of fear of travelling. People are intimidated by the effects of the global spread of the virus. This is why the world is facing the challenge of rebuilding the tourism industry as a whole. 

Prospectiveness of domestic tourism

According to the US National Travel and Tourism Office, October 2020 saw a decline of overseas visitations of 93% compared to October 2019. International travel may experience different issues: quarantines, travel restrictions, or closed borders. MMGY Traveler Intentions Pulse Survey (TIPS) from December 7, 2020, stated that the percentage of respondents likely to take a domestic leisure trip during the next six months accounted for around 41%. That’s why it’s safe to say that inbound travel is more likely to recover faster than outbound travel. Domestic tourism has fewer restrictions on travelling, more transportation options other than air travel (e.g. cars, trains, etc.), and accounts for a larger number of business travels. 

Even though some argue that domestic tourism only partially compensates for the losses of international tourism, the role it is playing in the healing of the sector is indisputable. While people have been restricted from travelling abroad during the pandemic, they have turned to domestic travel. Exploring the landmarks of their own country opened a whole new dimension of inbound travel. Many people have completely replaced travelling abroad with staying in the country and experiencing its beauties. This has caused a large increase in domestic travel earnings, letting small travel businesses survive and flourish in this difficult situation.


Since the pandemic is still not over, it yet remains to be seen what will be the challenges the travel industry will face in the upcoming years. The effects of the crisis will be difficult to neutralize, and different organizations, governments as well as individual companies are looked upon to give their contribution to aid the industry. However, since the desire to travel and explore new horizons will not disappear, it is certain that the recovery of the travel industry is waited upon eagerly.