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Impacts of covid-19 on travel and tourism industry

Author: 
Sri Hari krishna, Vashist Pothu, Rahul Sharma and Prof. Abhishek Venkteswar
Subject Area: 
Physical Sciences and Engineering
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) we estimate the impact of the pandemic crisis on the tourism industry worldwide. 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. Today the industry of meetings, incentives, conferences and exhibitions, commonly known under the name of MICE, contributes to economic diversification and actively stimulates the rational use of cultural-historical and natural recreational resources. The research revealed that under the conditions of harsh travel restrictions and closed borders, the UAE MICE industry is faced with a sharp reduction of demand. The multiplicative analysis performed in the course of the study identified the 5P marketing strategy and an outsourcing method as an optimal solution for MICE companies’ survival and recovery. By the end of the first quarter of 2020, the COVID-19 pandemic had brought international travel to an abrupt halt and significantly impacted the tourism industry. For many developed and developing countries, the tourism sector is a major source of employment, government revenue and foreign exchange earnings. In some countries, unemployment could rise by more than 20 percentage points and some sectors could nearly be wiped out if the duration of the tourism standstill is up to one year. Further the paper puts forward policy recommendations for governments to avert the worst effects and facilitate recovery.

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