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. 2021 Feb:163:120469.
doi: 10.1016/j.techfore.2020.120469. Epub 2020 Nov 16.

Impact of COVID-19 on the travel and tourism industry

Marinko Škare  1 , Domingo Riberio Soriano  2 , Małgorzata Porada-Rochoń  3
Affiliations

Impact of COVID-19 on the travel and tourism industry

Marinko Škare et al. Technol Forecast Soc Change. 2021 Feb.

Abstract

Our paper is among the first to measure the potential effects of the COVID-19 pandemic on the tourism industry. Using panel structural vector auto-regression (PSVAR) (Pedroni, 2013) on data from 1995 to 2019 in 185 countries and system dynamic modeling (real-time data parameters connected to COVID-19), we estimate the impact of the pandemic crisis on the tourism industry worldwide. Past pandemic crises operated mostly through idiosyncratic shocks' channels, exposing domestic tourism sectors to large adverse shocks. Once domestic shocks perished (zero infection cases), inbound arrivals revived immediately. The COVID-19 pandemic, however, is different; and recovery of the tourism industry worldwide will take more time than the average expected recovery period of 10 months. Private and public policy support must be coordinated to assure capacity building and operational sustainability of the travel tourism sector during 2020-2021. COVID-19 proves that pandemic outbreaks have a much larger destructive impact on the travel and tourism industry than previous studies indicate. Tourism managers must carefully assess the effects of epidemics on business and develop new risk management methods to deal with the crisis. Furthermore, during 2020-2021, private and public policy support must be coordinated to sustain pre-COVID-19 operational levels of the tourism and travel sector.

Keywords: COVID-19; Financial cycles; Pandemic crises; Panel structural vector autoregression (PSVAR); System dynamics; Tourism industry.

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Figures

Fig. 1
Fig. 1
International tourist arrivals by world regions 1950–2018.
Fig. 2
Fig. 2
Impulse (composite) response functions’ estimate of TCGDP to IPANDEMIC Notes: Median impulse response averaging with general to specific lag length criteria selection and 95% confidence intervals.
Fig. 3
Fig. 3
Impulse (composite) response functions’ estimate of TCEMP to IPANDEMIC Notes: Median impulse response averaging with general to specific lag length criteria selection and 95% confidence intervals.
Fig. 4
Fig. 4
Impulse (composite) response functions’ estimate of SPENDING to IPANDEMIC Notes: Median impulse response averaging with general to specific lag length criteria selection and 95% confidence intervals.
Fig. 5
Fig. 5
Estimated potential (COVID-19) impact on output in the travel and tourism industry by world regions.
Fig. 6
Fig. 6
Estimated potential (COVID-19) impact on employment in the travel and tourism industry worldwide.
Fig. 7
Fig. 7
Estimated potential (COVID-19) impact on tourists’ spending in travel and tourism industry worldwide.
Fig. 8
Fig. 8
Estimated potential (COVID-19) impact on capital investment in the travel and tourism industry worldwide.
See this image and copyright information in PMC

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