COVID-19 Impacts on the Tourism Industry

The COVID-19 pandemic has caused widespread impacts on the tourism and hospitality industries. Travel bans, nonessential business closures, and social distancing measures have dramatically decreased tourism drivers such as hotel stays, flights and rentals, and dining. Small and medium sized businesses will likely be hit hardest, without access to additional capital or government assistance to ride out what could be months of limited revenues. According to the World Travel and Tourism Council, 50 million jobs could be lost in the global tourism and travel industry, a sector that makes up 10% of the world’s GDP. Asia is expected to be most affected, losing 30 million jobs, with 7 million lost in Europe and 5 million lost in the Americas.

In some areas, entire local economies depend on tourism revenues, leading to particularly devastating effects when this industry is disrupted. The Commonwealth of the Northern Mariana Islands (CNMI), for example, has already taken economic hits from several severe typhoons over the last decade and relies heavily on Chinese, Japanese,  and Korean tourism as economic drivers. A total ban on Chinese tourism due to the spread of COVID-19 is projected to contribute to $48 million in economic losses for the islands. Many hospitality businesses, large and small, have been forced to suspend operations during the pandemic, including several mainstay resorts and restaurants. Additionally, equipment rentals and other tourism supporting businesses have limited hours or closed altogether. The impacts on the CNMI’s economy will be severe, putting added strain on an area only just recovering from the effects of Typhoon Yutu in 2018.   

To combat these effects, many communities are turning to alternative options to promote tourism. Virtual tourism is becoming a popular tool to engage with remote tourists, allowing communities to offer interactive activities like tours, lessons, and cultural education over online platforms. For example, Discover Puerto Rico is offering a virtual “weekend escape”, with opportunities to attend interactive cocktail-making classes, salsa dancing lessons, and cooking demonstrations online.

For more industry-specific recovery resources and up-to-date information on COVID-19 support, please visit RestoreYourEconomy.org.