The post pandemic recovery of tourism has lost its momentum with global economy losing momentum amid energy shock triggered by Russia- Ukraine war, high inflation and weakened household purchasing power, according to a new OECD report.
Though several countries saw a strong rebound in 2022 on the back of pent-up demand, household savings and travel vouchers, international tourism is now not expected to recover until 2024 or 2025, or even later, said OECD Tourism Trends and Policies 2022.
In the report, OECD said that Covid 19 dealt a heavy blow on the sector, which had shown six decades of consistent growth. “International travel came to a near complete halt at the height of the pandemic, which accounted for 77c of every USD 1 of lost revenue in service exports in OECD countries in 2020. With domestic tourism also constrained, tourism’s direct contribution to GDP fell by 1.9 percentage points in OECD countries with available data,” the report said.
The latest evidence indicates that travel has performed above expectations in many countries. International tourist flows in July 2022 were just 19.9% below July 2019 levels across reporting OECD countries, although there were marked variations across regions. Arrivals in Denmark, Greece, Luxembourg, Portugal, Slovenia and Spain exceeded 2019 levels but in countries bordering Russia and Ukraine, tourist numbers were at least 30% below pre-pandemic levels in July 2022. In OECD countries in the Asia Pacific region tourist arrivals were at least 40% lower than in 2019.
OECD Secretary-General Mathias Cormann said “the pandemic exposed underlying weaknesses in the wider tourism economy.”
“The Fallout from Russia’s war of aggression against Ukraine is now threatening the sector’s recovery. The challenge for governments and businesses is not only to boost tourism in the short-term, but to also ensure the sector’s longer-term strength and sustainability,” he said.
Tourism businesses, already struggling to recover from the pandemic, are now also facing rising energy, food and other input costs. The sector faces huge uncertainty regarding labour and skills shortages which further risk constraining recovery. Restoring safe mobility is also required to bring back traveller confidence and tourism demand.
- Strengthen collaboration across government, and with the private sector, to support recovery and shape a brighter future for tourism. For example, the United States National Travel and Tourism Strategy 2022 draws on engagement and capabilities from across the Federal Government and will be implemented under the leadership of the Tourism Policy Council and in partnership with the private sector.
- Secure a robust and stable tourism sector that is more resilient to future shocks – the pandemic and cost-of-living crisis have underlined vulnerabilities in the sector and the need to build the capacity of government and business to react and adapt quickly, develop tailored destination management approaches and promote a business environment where SMEs can succeed. For example, the Chile Supports Tourism 2022 Programme (launched in July 2022) is designed to finance training, business planning, consultancy, technical assistance, working capital and/or investment projects to support the reactivation of tourism SMEs.
- Take sustained and transformative action to promote a green travel recovery. For example, Norway has developed the CO2RISM calculator to estimate the amount of transport-related CO2 emissions associated with visitors travelling to and within Norway and is one of several operational tools to support destinations shift to more sustainable tourism planning and development under the National Tourism Strategy 2030