If you are hesitant to hop on a plane these days, you are not alone. According to the United Nations World Tourism Organization (UNWTO), tourist arrivals are estimated to have fallen 74 percent in 2020 compared to 2019.
For many developing countries in the Asia-Pacific and Western Hemisphere – small island states in particular – the effects have been severe.
Tourism-dependent countries hit by a massive blow
Before the pandemic hit, tourism was big business, accounting for more than 10 percent of global GDP. The share was even larger in tourism-dependent countries.
To recover from this disastrous situation, vaccines will need to be widely distributed and policy solutions implemented, the International Monetary Fund (IMF) notes in a blog post published on Friday.
Some governments have been providing financial support, either directly or through soft loans and guarantees to the industry.
According to the IMF, Thailand allocated US$700-million to spur domestic tourism, while Vanuatu offered grants to small and medium-sized enterprises.
Governments helping firms to adapt business models
Countries have also been assisting firms to adapt their business models and retrain staff. In Jamaica, the government gave free online training certification classes to 10,000 tourism workers to help improve their skills and become more relevant in a post-pandemic travel environment.
However, many tourism-dependent economies are hampered by limited fiscal space, the IMF warns, adding that new initiatives to reignite the sector could perhaps help.
In Costa Rica, for example, national holidays have temporarily been moved to Mondays to boost domestic tourism by extending weekends. Barbados introduced a ‘Welcome Stamp’ visa, which is a one-year residency permit that allows remote employees to live and work from the country.
Similarly, Fiji – one of the hard-hit tourism nations located on Australia’s doorstep – launched a Blue Lanes initiative that allows yachts to berth in its marinas after meeting strict quarantine and testing requirements.
More emphasis on ecotourism and on niche markets
Post-pandemic, a continuing shift toward ecotourism – a fast-growing industry focused on conservation and local job creation – could give an additional boost to the industry, the IMF believes.
This is already a key element of Costa Rica’s tourism strategy. Thailand, too, is trying to shift to niche markets, including adventure travel and health and wellness tours.
Finally, should the reduction in travel be longer lasting, some tourism-dependent countries may need to embark on a long and difficult journey to diversify their economies.
“Investing in non-tourism sectors is a long-term goal, but could be aided by strengthening links between tourism and locally produced agriculture, manufacturing and entertainment,” the IMF observes.
Creating a ‘new normal’ for tourism-driven countries
In Jamaica, for instance, an online platform was launched that allows buyers in the hotel industry to directly purchase goods from local farmers.
Exports, including services, could also be expanded, using regional agreements to address the constraints imposed by limited economies of scale.
“Beyond the immediate priority of mitigating the impact of the pandemic, countries will need to create a ‘new normal’ for the tourism industry,” the IMF states.
“Diversifying, shifting to more sustainable tourism models and investing in new technologies could help to shape the recovery.”
