eBusiness Weekly
Mari Elka Pangestu
Tourism is among the industries that have been hit hardest by the COVID-19 crisis. Over a year since the onset of the pandemic, the numbers are staggering: Tourism destinations recorded one billion fewer international arrivals in 2020 than in 2019. A deep decline in international travel led to a loss of about US$1.3 trillion in export revenues, more than 11 times the loss during the last economic crisis in 2009. 100 to 120 million tourism jobs were put at risk, a large portion in small and medium-sized enterprises.
This is a grave concern for developing economies as they chart a course towards recovery. Driven by both public and private sectors, not only is tourism a vital source of foreign currency, it has the potential to serve as a development ‘tool’ to strengthen supply chains, improve local firm productivity, creates one out of ten jobs and provide income for women and young people. As a former minister for tourism myself, I have seen up close, the value tourism creates for local communities and how sustainable tourism creates economic value while preserving culture and natural assets.
At a recent panel on tourism resilience and building forward better, during the WTO’s Aid for Trade Stocktaking event last month, we discussed the future of tourism given the current challenges. Industry leaders from Costa Rica, Jordan, Kenya and Sri Lanka shared experiences from their own countries in responding and learning from crises, and insights on how they see the way forward for tourism.
Three clear steps emerged from the discussion for tourism to build better forward. First, improve traveller confidence; second, understand and track new market trends and the drivers of demand; and third, commit to building more resilient and inclusive tourism sectors, leveraging renewed interest in sustainability – an important takeaway in the long term.
At the World Bank Group (WBG), we are taking a green, resilient, and inclusive development (GRID) approach as we envision the post-COVID world. It was encouraging to see similar ideas reflected in our discussion. Mr. Allan Flores, former Minister of Tourism, Costa Rica, emphasised the pivotal role played by the Certification for Sustainable Tourism initiative in positioning the country as an ecotourism leader.
Kenya’s Minister of Tourism and Wildlife Najib Balala shared how his government is working on diversifying conservation revenue. It was good to hear about the important progress being made in public private partnerships in conservation, and engaging in wildlife bonds, to ensure their natural heritage is protected during tourism crises. Resilience comes through focusing on the environment, people and technology, to prepare for climate change and crises. Mainstreaming risk management and investing all along the tourism value chain is Kenya’s approach.
The panel also agreed on the need to build a more inclusive industry, considering the impact of COVID-19 on vulnerable groups. As an institution committed to knowledge and evidence based responses, the WBG has been working to better understand the impact of the crisis on travel and tourism. We know from business impact surveys that women-owned businesses and women tourism employees have been disproportionately impacted by COVID-19 and therefore need dedicated support.
Of course, COVID-19 started out as a health crisis, and improving health safety and building traveller confidence are the immediate challenges which countries need to tackle. Ms Kimarli Fernando, Chairperson, Sri Lanka Tourism, spoke about the Sri Lankan government’s efforts to put health protocols in place, communicating with the public daily to instil confidence and understanding of the guidelines. The WBG is also supporting the development of standard operating protocols for hotels and tour operators, and public-private dialogue around recovery strategies. Governments continue to see the need for strong health and sanitation protocols as they seek to protect tourists and residents.
Looking ahead, future travel will inevitably look different, so data and market intelligence will be vital. WBG teams are working on business pulse surveys, aviation and policy dashboards and consumer market research all indicating that in the near term, travel will shift its drive to destinations, domestic and proximate travel, as well as strong growth in nature and adventure tourism, highlighting the increasing importance consumers are placing on sustainability. Stimulus recovery programs for tourism could focus on rebuilding tourism locations to be more sustainable, which would create jobs, as well as enhance its attraction.
Digital technology is another area that deserves attention. Her Royal Highness Princess Dana Firas from Jordan emphasised the important role of technologies such as virtual reality in holding tourist interest during the lockdown, and as a source for data to inform planning and decision making. Technology will continue to play a growing role in long stay tourism as more workers seek remote and telecommuting options.
Mari Elka Pangestu is World Bank Managing Director of Development Policy and Partnerships.
The COVID-19 crisis has increased the number of digital nomads seeking opportunity to work from tourism destinations. As vaccines are rolled out and offices reopen, destinations will need to keep a close eye on the durability of this market.
The road to recovery for tourism and travel will require innovation and collaboration. Although the pandemic is far from over, we must also plan to build forward better – engaging across government, private sector, civil society and other partners – and prepare for changing business models and governance structures to meet new and different demand. Clearly communicating actions to rebuild investor and consumer confidence will be important in the short term. In the long term, strengthening sustainability and resilience, and sharing benefits more equitably will also be critical. Together these approaches can revitalize the global tourism sector, harnessing its market creating power to support economies, create jobs and drive development outcomes that put people and their communities first.
Mari Elka Pangestu is World Bank Managing Director of Development Policy and Partnerships.
