May 24, 2024, Friday
Nepal 1:37:26 pm

COVID-19 Impacts and Responses in Asia and the Pacific

Sustainable tourism:

The Nepal Weekly
January 25, 2022

In April 2020, 90% of the world had implemented full or partial travel restrictions, leading to the steepest drop in arrivals ever recorded – a decline of 1 billion international arrivals from 2019 to 2020.

Asia had more severe impacts, with an 84% decline in international arrivals compared to 74% worldwide. Decreased tourism and economic activity have had some positive impacts on the environment, including the largest annual reduction in carbon dioxide emissions (7%) since World War II. However, long-term environmental impacts will depend on how “green” recovery is, and whether support packages address environmental challenges.

Although prospects for recovery vary widely by subsector, destination, and market segment, overall economic damages have been substantial:  (i) Accommodation industry: In December 2020, most accommodation properties had reopened, but occupancy rates remained low and revenue per room had dropped by 59% across all open hotels in Asia (excluding the People’s Republic of China), and by 47% in Australia and Oceania. (ii) Airports and cruises: In 2020, airports lost $111.8 billion in revenue against business-as-usual, airlines lost $371 billion, and the cruise industry lost 99.5% of its revenue. (iii) Arts and culture:  Early in the pandemic, 90% of countries closed World Heritage sites and about 85,000 museums. Revenue losses may lead to site closure or deterioration. (iv) Jobs: A study by the International Labour Organization on tourism workers in 14 countries in Asia and the Pacific found that 15.3 million workers were at risk of losing their jobs due to COVID-19, with millions more at risk in countries not surveyed.

Business responses have varied by subsector and destination, but have included reduced staff and services, temporary shutdowns, cost reductions, product adaptation, maintenance and training, digitization of operations, and sharing staff with businesses in higher demand. At the policy level, governments have implemented three main types of response:  (i) business support programs including loans, or nationalization of strategically important firms, like airlines; (ii) sectoral schemes, training and capacity building programs, or workforce support programs; and (iii) untargeted support providing liquidity to firms, and job-retention schemes. Policy measures are designed for different time horizons-including making it through the crisis – adapting to the new normal, and cultivating resilience. The latter may provide the most opportunities for embedding sustainability into the future development of tourism. However, few policies have taken a long-term focus, such as including sustainability criteria in financial support packages, extending social protection, or helping redesign tourism systems.

Decreased Travel Activity

In response to COVID-19, the UNWTO recorded the most significant decrease in international arrivals in the history of tourism, with 1 billion fewer international arrivals in 2020 than in the previous year, and an estimated loss of $1.3 trillion in export revenue (UNWTO 2021). In 2020, Asia and the Pacific experienced an 84% reduction in international arrivals (about 300 million), which is a higher loss than the global average of 74%.

Travel Restrictions and Airline Networks Early in the crisis – at the end of April 2020 – over 90% of the world was under full or partial travel restrictions. While some countries eased restrictions by the end of 2020, many remain in place as of September 2021. In December 2020, 27 destinations in Asia and the Pacific (59% of all destinations in the region) still had complete border closures in place, compared to 27% of countries worldwide. In December 2020, the International Air Transport Association reported that revenue passenger kilometres across all airlines decreased by 69.7% compared with December 2019 (International Air Transport Association 2020). When measured across the calendar year, 2020 traffic was down by 66% compared with the previous year. While there were some forward bookings, these declined again later in December 2020, because of increased travel restrictions in response to new waves of the pandemic, and more infectious mutations. The occupancy rate of aircraft is an important performance indicator for the aviation industry. In 2020, the average passenger load factor across the industry was 17.8% lower than the 64.8% occupancy rate in 2019; and the average load factor for Asia and the Pacific dropped from 81.6% to 61.6% over the same period. This was despite dramatic reductions in available seat capacity. Most airlines retired a substantial part of their fleet (temporarily or permanently). This manifested in a 56.5% reduction of available seat kilometres from 2019 to 2020. Overall, the loss of 2,699 million passengers in 2020 equates to an economic loss of $371 billion in gross passenger operating revenues across airlines (ICAO 2021). Signs of Recovery Travel restrictions and limited air route networks affect all market segments, but some may rebound sooner than others. Recovery for destinations might rely on specific markets that are more likely to travel in the face of adversity, including the “visiting friends and relatives” segment, educational markets, and specialized workers. Leisure travel will follow, but business travel may be permanently reduced due to shifts in telecommunication. This has considerable repercussions for the whole industry, but particularly for convention centres, conference destinations, urban gateways, and full-cost airlines.

Economic Impacts The widespread and long-lasting impacts of COVID-19 mean that tourism supply and demand will be affected in multiple ways and at compounding levels not experienced before. Overview of Macro Indicators Traditional econometric models that simulate changes in income and price sensitivity to derive demand are not suitable to capture complex COVID-19 effects such as consumer anxiety. Some sectors might be additionally affected by reputational repercussions, for example, the cruise ship industry. Regardless of how impacts are measured, the crisis will significantly reduce the ability of governments to invest in SDGs unless investments are made simultaneously through response and recovery packages. Unfortunately, only a small part (18%) of stimulus investment is classified as “green” (UNEP 2021). The numbers in Table 3 fail to convey the full extent of suffering in some destinations and by particularly vulnerable groups.

During the period, Nepalwitnessed $460 million drop with potential loss to GDP from travel and tourism earnings (June 2020), 230,000 impacted jobs at risk, 20,000 impacted as tour and trekking guides unemployed, 2,600 impacted due to shutdown of trekking agency businesses.

(Excerpts from Sustainable Tourism After COVID-19 Insights and Recommendations for Asia and Pacific | 2021 December)