COVID-19's Effects on the Travel Industry

Spencer Grossman Smisek ’22

A rather empty Taiwan Airport (Photo Credit: Independent)

While the coronavirus has had disastrous effects on businesses large and small throughout the globe, one industry that may never be the same is travel.

Prior to the pandemic, rates of travel throughout the globe were soaring. The World Travel and Tourism Council said that over the past five years, the travel industry was responsible for one in four new jobs and also accounted for 10.3% of the global GDP. However, now that very few people are willing to travel, and many others are unable due to restrictions caused by COVID-19, the age of prosperity for the travel industry appears to be waning as the pandemic leaves potentially permanent damage. The United Nations Conference on Trade and Development (UNCTAD) has estimated that the losses will tally between $1.2-3.3 trillion worldwide depending on how quickly the restrictions on travel lessen.

One area of travel that may never recover is the cruise industry. Cruises have been hit especially hard by the coronavirus as a cruise consists of thousands of people within close quarters of each other out at sea. Many aspects of cruising will have to be eliminated due to COVID-19. Buffet tables, which are common on cruise ships, will have to be removed due to multiple passengers touching the food. Most swimming pools and hot tubs will also have to be closed or restricted in order to enforce social distancing. The closeness of passengers during many cruise activities compromises their safety. Cruise passengers also mostly comprise of older people who are the demographic at the highest risk.

Cruises have come to a standstill since COVID-19 broke out, and major companies such as Carnival, Norwegian, and Royal Caribbean all reported their shares falling by at least 55% this year.

Airlines will also not be the same for years to come after COVID-19. As over 200 million Americans are being advised to stay home, traveling has been halted. Airlines for America reports that in late March when the pandemic first broke out, US airlines were losing $10 billion monthly and lost $5 billion each month this summer. An August 9 report shows that 29% of all US commercial passenger planes—1,758 planes—are currently grounded and inactive.

Air travel took around three years to recover from 9/11 and over seven years to recover following the Great Recession. While passenger traffic is currently projected to recover by 2024, the financial losses of airlines likely won't be recouped until years after that.

Hotels have also been devastated as travel decreased. While fear over travel rose and more limitations were passed, hotels welcomed little to no guests. Many aspects of hotel stays allow for the virus to spread because the rooms are reused. Also, hotels contain many common areas where guests interact, which could also result in the spread of the virus. Hotel revenue per room has decreased 8%-15%, and the hotel industry isn’t predicted to recover until at least 2023.

Some of these travel restrictions will likely have long-lasting effects as citizens traveling from certain countries have been barred from visiting many places. For example, citizens from the US have already been banned from traveling to 33 countries across the globe.

In order to prevent the spread of the virus, hotel rooms, cruise ships, and airlines will all be cleaned and disinfected, according to new protocols, every time new guests arrive. Masks will also be required in all common areas of cruises and hotels.

While social distancing and face mask requirements may limit some common travel activities, vacations and visits can still be sanitary in the years to come as travel businesses recover.