Tourism sector warns of massive job losses if travel only reopens widely by September

  • New scenario models by the World Travel & Tourism Council indicate up to 197 million job losses if the industry is only widely opened again by September.
  • The Tourism Business Council of SA predicts about 600 000 direct tourism jobs will be lost in 2020 alone.
  • Government foresees domestic leisure tourism will likely only be able to resume in December and international travel next year.

Warnings are rising locally and internationally of widespread and severe job losses if the global tourism industry is not opened up at least by September.

The industry suffered a drastic crunch earlier in the year as countries shut their borders to new arrivals and imposed lockdowns to stem the spread of the coronavirus.  

Now new scenario models released by the World Travel & Tourism Council (WTTC), a body which represents the global tourism industry's private sector, indicate that under its worst-case scenario 197 million global job could be lost and $5.5 trillion cut from travel and tourism's contribution to world GDP if the global industry is only widely opened again by September.

In South Africa, where the pandemic hit later than in the Northern Hemisphere, government has only recently allowed some business travel - and certain domestic airline routes for that purpose - to start when the country went to lockdown Level 3 on 1 June

Accommodation establishments have been allowed to open if they are providing accommodation for people travelling for the purpose of business permitted under Level 3, provided they have necessary hygiene protocols in place.

The government, meanwhile, has indicated that - given the current coronavirus infection curve in the country - it foresees domestic leisure tourism may only be able to restart in December and international tourism in 2021. 

More than 197 million jobs could be lost in the global travel and tourism sector if barriers to global travel, such as blanket anti-travel advisories and quarantine measures remain in place until September this year, warns the WTTC.

The Tourism Business Council of South Africa (TBCSA), which represents private sector, meanwhile, told Parliament earlier this week that it predicts about 600 000 direct tourism jobs will be lost here in 2020 alone if the industry is not allowed to open up - even at a phased-in approach - as soon as possible.

The pandemic has already led to local job losses. 

Margie Whitehouse, chief tourism officer of Wesgro - the official tourism, trade and investment promotion agency for Cape Town and the Western Cape - said during a webinar on Wednesday that it was estimated that by the end of May the South African tourism industry had already lost about 40 000 jobs. 

Before the pandemic struck, it was estimated that the tourism industry provided 1.5 million jobs in the country.

New jobs created

According to research by the WTTC, during 2019 the global travel and tourism sector supported one in 10 jobs, or about 330 million in total, and contributed 10.3% contribution to global GDP. 

It also generated one in four of all new jobs in 2019. New scenario projections done by the WTTC estimate that the impact of prolonged travel restrictions could wipe out $5.5 trillion in the sector's contribution to global GDP - a 62% percent drop compared with 2019.

Under its worst-case scenario, global international arrivals would be down 73% and 64% for domestic arrivals.

The scenarios are based on a worst-case, if current travel restrictions start to ease only from September for short-haul and regional travel; from October for mid-haul and from November for long-haul.

The baseline scenario would be if current restrictions start to ease from June for regional travel, July for short-haul or regional travel; from August for mid-haul, and from September for long-haul travel.

For the best-case scenario, current measures must start to ease from June for short-haul and regional travel; from July for mid-haul and from August for long-haul. South Africa is a long-haul destination.

The WTTC scenarios predict that in the best-case scenario, job losses in travel and tourism in Africa could be as many as 7.6 million and the sector's contribution to GDP on the continent be down $53 billion.

In the worst-case scenario this could end up being a loss of 17.4 million jobs and $120 billion less contributed to GDP.

"Our new modelling reveals the depth of the long-term impact facing the global travel and tourism industry if travel restrictions continue for an extended period of time," says Gloria Guevara, WTTC president and CEO, in a statement.

"The sector's recovery will be delayed by heavy-handed restrictions... in addition to the airlines, the entire travel ecosystem will suffer, including millions of SMEs."

Recovery plans

Wesgro's Whitehouse pointed out that "in the original coronavirus risk assessment by the SA government, tourism barely made it into levels 1 and 2".

However, due to good lobbying by local industry bodies, it managed to get "some sort of business tourism" into level 3.

Though this very limited opening up for business travel does not seem like a strong driver of recovery of the local industry, Whitehouse sees it as an opportunity to show how well the tourism industry is able to de-risk.

Protocols developed for the industry have been approved by the Department of Tourism and the Department of Health.

"We must, of course, also address issues from before the pandemic too, like safety, security, the water challenge and the cost of airlift," Whitehouse said.

At the same time, she feels South Africa has the perfect product for the post-Covid-19 tourism demand, namely wide-open spaces, no "over-tourism", beaches and offerings for solo and adventure travel.

"If we can open the industry in and around September, we can maximise our summer season and prevent job losses."

The TBCSA, which represents tourism businesses in the private sector in South Africa, briefed Parliament this past week on a Tourism Recovery Strategy in which the tourism business council advocates for an earlier phased reopening of international tourism as soon as September 2020, dependent on stringent health protocols.

"Tourism is a vital sector to SA's economy and accounts for 1.5 million jobs – many for young people. There are also significant benefits to other parts of the economy. We are committed to reopen safely," TBCSA CEO Tshifhiwa Tshivhengwa told Parliament.

"We receive calls every day from tourism companies which are on the brink of having to retrench staff or close down. If we do not protect the value chain, it's going to be very difficult to reinstate it."

Speaking at the parliamentary briefing, Otto de Vries, CEO of the Association of Southern African Travel Agents (ASATA) acknowledged the significance of the limited reopening of business travel in Level 3 lockdown.

"It is not just about ensuring that airlines can fill their planes with international tourists and international business travellers to South Africa, but in turn, that those aircraft will be utilised for South Africans who want - or need - to travel overseas," he said.

ASATA supports Minister of Tourism Mmamoloko Kubayi-Ngubane's call to find a responsible, phased approach to opening local and international tourism, but highlighted the need for definitive dates.

According to Alderman James Vos, Cape Town's Mayoral Committee Member for Economic Opportunities and Asset Management, the hospitality body Fedhasa has indicated that the majority of sectors within the tourism and related industries are ready to reopen safely for non-business travel, because all necessary health and safety protocols have been put in place for the reopening of business travel.

In the view of the WTTC, the best-case scenario can still be achieved if governments across the world follow a 4-point plan it proposes.

This plan involves the immediate removal and replacement of any quarantine measures, with so-called "air corridors" to countries with similar circumstances.

Secondly, the adoption of global health and safety protocols, such as the "safe travels" initiative recently launched by WTTC.

Thirdly, a rapid test and trace strategy must be implemented and lastly, greater and sustained collaboration between the public and private sectors to ensure a coordinated global approach to the crisis.

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