COVID-19 has become our worst nightmare or our brightest star, it all depends on the part of the economy you call home. If your revenue stream relies on success in the hotel, travel and tourism industries, you may be seriously disappointed.
Beginning in January 2020, this virus changed segments of the economy that are unlikely to fully recover until 2022 or 2023. Owners, operators, administrators and staff have watched massive trip cancellations, suspension of national and international flights, postponement or cancellation of large and small events- without the power to make it stop. People are fleeing cities and avoiding travel to these destinations although the health problem is unrelated to urban density but rather to structural inequalities and the quality of urbanization.
All industry segments had been experiencing growth and financial success through the end of 2019, only to be struck by a widely spreading virus of uncertain origin that quickly spread through the air. The tourism industries are ill-prepared to deal with disaster situations, even in high-risk areas. Research indicates that after large-scale health and climate related disturbances, tourists are reluctant to travel to these destinations and, adding to the onerous state of affairs, governments impose obstacles to the travelers heading to these regions.
Economic forecasts suggest that the multifaceted tourism industry will not recover in the short or near-term as demand is tethered to income, and a decline in income results in similar or a deeper decline in the consumption of tourism products/services. In addition, there is likely to be a shift in destination demand from international adventures to local destinations.
The hotel industry is particularly vulnerable to crises as performance is based on the derived demand from tourists. With the closure of airports, the cancellation of airline flights, and quarantines, there has been little or no demand for hotel rooms resulting in decreased occupancy and revenues, the reduction of employment and the deterioration of unused, non-maintained properties.
