Impact of the

Outbreak on International TourismCOVID-19

WTFI presented an up-dated assessment of the reaction of the tourism industry to the outbreak of COVID-19, showing a declinein international arrivals and receipts in 2020.

The World Tourism Forum Institute callsfor the importance of the tourism sector inthe recovery strategies of governments,foreign agencies and organizations. TheWorld Health Organization (WHO) urgescountries suffering from COVID-19outbreaks to enforce travel or traderestrictions, but many governments havedefied this and have placed bans orlimitations on other nations. Regardinginternational tourist arrivals, WTFI hasrevise its 2020 outlook from 1% to 3%.WTFI expected growth of 3% to 4% beforethe COVID 19 outbreak. The effect onmedical tourism is not yet understood butit is expected to be very badly affected.

WTFI notes that steps to minimize unduedisruptions on travel and trade must beenforced in the light of public health; andWTFI has been working closely togetherwith the WHO since the start of theoutbreak to guarantee this.

Taking into account the evolution of thesituation, WTFI states that the effect ofthe COVID-19 on international tourism istoo early to estimate. In view of the

scenario, of the global market size anddynamics of the travel industry and itsexisting threats to travel, COVID-19geographical distribution and futureeconomic effects, WTFI analyzed theinternational travel market's 2020prospects from 1% to 3%. WTFI expectedgrowth of 3% to 4% before theCOVID 19 outbreak.

SARS

are projected to be the worst affected area with an estimated decline in arrivals of 9 to 12,down from 5% to 6% projected rise. Estimates of the rapidly developing situation in otherworld regions are currently premature.

A Call forFinancialand PoliticalSupport

WTFI has called for financial and politicalsupport for tourism recovery initiativesand for the sector's support to beintegrated into broader recovery effortsand actions of the economiesaffected.

The effect of COVID-19 is felt across theentire chain of interest for tourism.Around 80 per cent of the tourism sectorcomprise small and medium-sizedenterprises and are primarily vulnerableto millions of livelihoods worldwide, including in poor communities,dependent upon tourism.

Policy and financial commitments arecrucial to ensuring that tourism willcontribute to an even broader economicand social recovery, as has been shownin previous crises as the industry ishighly resilient and can regeneratesteadily.

Notwithstanding periodic surprises,international tourism has seen continuedgrowth, demonstrating the power anddurability of the industry and benefitingevery region in the world. Global tourismhas decreased only in 2003 after theSARS and the Iraq war and 2009 inthe midst of the economic andfinancial crisis.

The tourism industry is currently one ofthe most severely hit by the COVID-19outbreak, with an impact on both traveland demand, particularly in China, theworld's leading spending outbound market, and other main Asian and Europeandestinations, such as Italy.

The availability of transportation services –domestic and foreign – has diminisheddramatically and demand has decreased.Transport restrictions and cancelation and frequency cuts havedecreased.

A NEWDOWNSIDERISK:

In the background of an already weakenedglobal economy, COVID-19 has become a

new downside risk. The outbreak ofCOVID-19 is followed by an unpredictablescenario of ongoing economic, social and

commercial conflicts and an unequal output between large outbound transport

markets.

The Director General of the WHO hasdeclared the outbreak of COVID-19 a

Public Hygiene Emergency of InternationalConcern in the light of the advice given

by the International Health ReviewRegulations (COVID-19 Emergency

Committee).

K e y

Facts

The public health situation isunprecedented. Keeping the pandemic isthe top priority and all measures taken to

contain the epidemic should be sponsoredby tourism. To ensure organized and

efficient response, WTFI works in closepartnership with the World HealthOrganization (WHO), its member

states and industry.

The outbreak of COVID-19 has broughtdown our world with a never-ending

effect on our lives, economies,communities and our livelihoods and

the chances of a global recession and significant job losses are rising.

The rapidly evolving environmentrapidly overcomes any estimation of

the effect of this unprecedented crisis on the tourism sector.

Given the unprecedented and rapidlychanging nature of the crisis, the effect of COVID-19 on international tourism is

extremely difficult to estimate.

Based on the latest developments(quarantine measures, travel bans & border

closures in most of Europe, whichrepresents 50% of international tourism,and in many countries of the Americas,

Africa and the Middle East), the evolutionsin Asia and the Pacific and the patterns

of previous crises (2003 SARS and 2009global economic crisis), WTFI estimates

international tourist arrivals coulddecline by 20% to 30% in 2020.

That will mean a loss of USD 300-450billion in receipts for international tourism(exports), about a third from the world'sworst-case estimate of US$ 1.5 trillion.

The size, uncertainty and unparallelednature of the crisis should be viewed withcaution. The latest comparisons are SARS

and the 2009 global economic crisis,but this crises are no different. The effect

of COVID-19 on international tourismwill still be tracked by WTFI.

2000

674 674694 691 756

809 855912 929 929

892

952997 1044

1097 11431197

1243 13331408

1460

0

200

400

600

800

1000

1200

1400

1600

2020 Forecast - International Tourist Arrivals, World (Millions)

2003 SARS-3 Million

-0.4%

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

2009Global Economic Crisis

-37 Million -4.0%

InternationalTourism CouldDrop Back To

Levels of2012-2014

1,020 1,170

2020 (Estimate)COVID-19

-290 to -440 Million-20% to -30%

2000

496 485506 555 658

707 774892 989 901

9791096

11351224 1285

12271253

13511463

1507

0

200

400

600

800

1000

1200

1400

1600

2020 Forecast - International Tourist Arrivals, World (Millions)

2003 SARS+50 US Billion

-1.4% (Real Terms)

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

2009Global Economic Crisis

-88 US Billion-5.4% (Real Terms)

1,060 1,210

2020 (Estimate)COVID-19

-300 to -450 USBillion -20% to -30%

2000

0

-5

-10

-15

-20

-25

-30

5

10

15

2020 Forecast - International Tourist Arrivals, World (%Change)

2011Sept 11thAttacks

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

2003SARS

Epidemic2009

Global EconomicCrisis

2020(Estimate)COVID-10

-20%to -30%

2000

0

-5

-10

-15

-20

-25

-30

5

10

15

2020 Forecast - International Tourism Receipts, World (Real Change, %)

2011Sept 11thAttacks

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

2003SARS

Epidemic2009

Global EconomicCrisis

2020(Estimate)COVID-10

-20%to -30%(Nominal)

Estimated

ImpactsGlobal

-290 to 440million

InternationalTourist Arrivals

Tourism Exports(Receipts)

Lost in TourismExports

Lost in numberof tourists

-300 to 450 USBn

1/3 of 1.5 UsTrillion

5 to 7years

Africa -31% -4

-76

-19

-252

-46%

-39%

-38%

-37% -88

-15

-50

-41%

-27%

Europe

Middle East

IndustrySource: IATA

Asia Pacific

Latin America

North America

Region of AirlineRegistration

Estimated impact of COVID-19 on air transport in 2020(RPKs and air passenger revenue loss), IATA

Importance of international tourism in countries with most reported casesof COVID-19 (over 5,000 cases, 24 March 2020As of 24 March 2020, a total of 196 countries and territories have reported cases of COVID 19

China %4

%5

%3

%6

%1

United States

Germany

Republic of Korea

Switzerland

% Change in RPKS(2020 vs. 2019)

Est. Impact on PassRevenue 2020 vs. 2019(US Billion)

Italy

Spain

France

United Kingdom

TOTAL %34 %39 %53

Iran

%4

%6

%1

%1

%3

%1

%10

%3

%3

%5

%8

%16

%6

%8

%6

%3

%15

%3

%4

%1

%4

%5

%0

%1

%4

%19

%10

%7

%3

%2

%2

%2

%1

%2

%5

Countries with morethan 5K COVID-19 reportedcases

Share of WorldTourist Arrivals(%)

Tourism Share of Exportsthe Country (%)

Share of WorldTourism Receipts(%)

Share of WorldTourism Expenditure(%)

SUPPORTING

RECOVERY

What we don’t know - we don’t know when we will we seethe end of this crisis.

What we do know: we know that millions of jobs are at risk,that we need to protect the most vulnerable segments such asSMEs, self-employed, women and youth. That we need tocreate survival mechanisms for companies.

We know we need strong support in navigating the unparalleledsocial and economic impact of COVID19. In the immediate,we need urgent fiscal and monetary measures that help protectjobs, sustain the self-employed and support companies' liquidityand operations and accelerate recovery in the future.

Tourism is a major job creator, especially for more vulnerablegroups - women and youth. It is also a sector with provencapacity to bounce back and multiply recovery to other sectors.

Coordinated and strong mitigation and recovery plans tosupport the sector can generate massive returns across thewhole economy and jobs.

I n t e r n a t i o n a l T o u r i s m

History of Growth

Following occasional surprises, international tourism has seenits sustained growth show the strength and durability of theindustry and benefited many of the world's regions.

1.5 Billion in 2019Total International Tourist Arrivals

International Tourist ArrivalsAVERAGE GROWTH 2009-2019

Total International Tourist Exports (Receipts & Passenter Transport)

US 1.7 Trillion in 2018

2%

-4%

7% 7%6%

5% 5% 5%4%

5%4% 4%

‘95

‘96

‘97

‘98

‘99

‘00

‘01

‘02

‘03

‘04

‘05

‘06

‘07

‘08

‘09

‘10

‘11

‘12

‘13

‘14

‘15

‘16

‘17

‘18

‘19

675Million

2011Sept 11

1,461Million

+64% Since2009Since2000+117%

2003SARS

20039Global Economic

Crisis

‘95

‘96

‘97

However, this crisis is like no other and calls for fast, concertedaction.

International Tourism & Previous CrisesInternational tourist arrivals in Asia Pacific during SARS and worldwide during 2009 global economic crisis, monthlyr growth (%)

Note: Month 0 (zero) is considered to be March 2003 for SARS(Asia Pacific) and January 2009 for global econnomic crisis(World)

Jobs in all sectors rose by 11% between 2010 and 2018 afterthe global economic crisis, and jobs in accommodation and foodservices grew by 35%.

-50-4 -3 -2 -1 0 1 2 3 4 5 6 7 8 9 10 11 12

-40

-30

-20

-10

0

10

20

October 2008US 700 Billion US bailotafter Lehman bankruptcy.Dow Jones drops 20%

March 2003WHO declares global

health emergencydeo to SARS

April 2003WHO issues travel warnings

(HK and Guandong)

March 2009 3rdConsecutive quarter

of GPD decline in G20(Q1 2009)

June 2003WHO lifts its finaltravel warnings

Now. 2009First month of growthin arrivals since startof global recession

Asia Pacific during SARS

World during global economic crisis

October 2003First month of growth

in arrivals sinceSARS outbreak

April 2009G20 London Summitpledged to restore growthmaintain supple of creditrecapitalise bankingsystem

EMPLOYMENT IN ALL SECTORS

EMPLOYMENT IN ACCOMMODATION & FOOD SERVICES

WORLD EUROPEAFRICA

ASIA AND THE PACIFICMIDDLE EATS

AMERICAS

10

TOURISM CAN ACCELARATE JOB CREATION...GROWTH IN GLOBAL EMPLOYMENT, 2010-2018 (%)

7

3521

42

12

2925

40

21

37

5

JOBLOSS

0

5

10

15

20

25

30

CHIN

A

INDI

A

UNIT

ED S

TATE

S

INDO

NESI

A

THAI

LAND

MEX

ICO

GERM

ANY

JAPA

N

BRAZ

IL

RUSS

IA

ITALY UK

SPAI

N

FRAN

CE

TURK

EY

Predicted employment loss in the travel and tourism industry due tothe coronavirus (COVID-19) pandemic worldwide in 2020, by country (in millions)

COVID-19: forecast job loss in travel and tourism sector worldwide 2020, by country

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