As travelling is considered a luxury, the revival of this industry might take longer due to the financial setbacks faced by people during the pandemic
Tourism is one of the worst-hit industries globally by Covid-19. According to United Nations World Tourism Organization (UNWTO) international tourist arrivals could decline by 20 percent to 30 percent in 2020, translating into losses of $300-450 billion in international tourism receipts (exports).
The losses can be substantially higher than the projected figures, as it is an unprecedented situation. These were calculated using the impact of the SARS epidemic and the effect of the 2009 global economic crisis on tourism, but Covid-19 is an unparalleled scenario; we do not know how long it is going to last and thus these calculations will have to be constantly revised as circumstances change.
Many airlines, hotels and tourism companies are now actively implementing staff downsizing and salary cuts to remain afloat in this uncertain situation, with basically no end in sight. Emirates, Virgin Atlantic, British Airways and Lonely Planet have had to opt for lay-offs and reduction in staff salaries due to a sudden halt in their operations.
The timing of this pandemic could not have been worse for the tourism industry in Pakistan.
In the last few decades, Pakistan had only been making headlines in the international media on account of the growing unrest in the region. The instability hugely impacted the tourism industry of a country which had once been a favorite destination of foreign tourists. Over the last few years, however, the government has been focused on improving the image of Pakistan globally and helping the tourism industry rebound.
The government has eased the visa application process as well as the NOC requirement. Pakistan had finally started making headlines in international publications like Conde Nast and Forbes as one of the top destinations to travel to in 2020. Several countries had eased travel restrictions to Pakistan after evaluating the improvement in its security situation and made it easier for their citizens to visit the country. This was an indication of good times ahead.
The year was looking promising for the revival of the tourism industry. The airlines, hotels and tour operators were fully booked for spring blossom tours scheduled in March and April. The influx of foreign tourists was expected to grow throughout the year.
I run a travel company, The Mad Hatters, focused on experiential and cultural travel to some of the off-the-beaten-path locations around Pakistan. In addition to arranging tours for domestic tourists, we have partnered with a few international organizations. The Mad Hatters looked all set for the year, with our event calendar locked in for the entire 2020 as well as 2021.
We had not, in our wildest dreams, imagined that the world could come to a standstill all of a sudden and our plans would come to a halt. All our tours scheduled for the next few months have had to be called off and advance payments returned with an immediate impact on our cash flows. The status of the tours planned in the latter part of the year too is uncertain, as it is still unclear how long this pandemic and the resulting travel restrictions are going to remain effective.
The tourism sector has proven its resilience time and again and fought against many difficult challenges. Once it regains its foothold [after the pandemic], it has the power to help spur economic activity that can help other industries as well.
While even big businesses associated with tourism that have been operational for decades are struggling with managing their operations, the catastrophe poses an even bigger threat to small and medium-sized companies that do not have large savings to fall back on during such times. Around 80 percent of the tourism sector worldwide comprises of small and medium-sized enterprises. Thus, this setback is going to impact the lives of millions of people. A majority of them belong to the most vulnerable segments of the societies and hail from the remotest areas.
While, the tourism industry has been affected directly by the lockdown, the ripple effect is going to have an impact on entire communities and economies. People all over the world have switched to the survival mode, and for a while now will not be purchasing anything other than the basic necessities of life. This means that even when the pandemic is over, it is still going to take a very long time for the economy to recover from a worldwide recession.
As travelling is considered a luxury, rather than a basic necessity of life, the revival of tourism industry is going to take long. But, we should not forget that the tourism sector has proven its resilience time and again and fought against many difficult challenges. Once it regains its foothold, it has the power to help spur economic activity to help other industries as well. It is imperative that the government provide it with the right tools, resources, and relief packages to survive during this time and bounce back effectively.
We are focusing all our energies on coming up with a suitable business strategy for a post-Covid-19 world, in order to be able to respond as soon as the market starts to pick up. Global studies suggest that the domestic travel industry is going to be the first one to return. The tourism business model in Pakistan is primarily focused on catering to the needs of foreign tourists visiting Pakistan, but we are now coming up with new service and product lines to serve domestic clientele. International travel is going to take a much longer time to revive due to border closures and flight cancellations that are expected to stay in place for a while.
This lockdown is going to have an impact on the kind of travel services people are interested in as well. Instead of visiting crowded places, people will now be more interested in visiting places off the beaten path for an immersive and holistic travel experience that takes them close to nature. They are also going to prefer staying in small guest houses away from commercial areas, instead of choosing big hotels. People might also be more interested in experiential and wellness travel. Our service portfolio is being designed while keeping all of these changing trends and behaviours in mind.
Satellite images and air quality data show improvement in pollution levels in many parts of the world with just a few weeks without human intervention. We should take this as a lesson to make more responsible choices in the future.
The power of community and belonging is the only thing that can help us get through this difficult time. We need to foster the spirit of giving. This is the time when we should be taking the responsibility to ensure that the communities around us are safe and well-fed.
Humans are resilient creatures. Together we will overcome this.