On the road again? The Future of Tourism post-pandemic

Join us at the 1st Global Forum on Tourism Statistics, on 3-5 November 2021.

In March 2020, the global tourism industry shuddered to a halt. Travel corridors closed. Stations and airports emptied. Suitcases were stored away. A year and a half later, the outlook for tourism – and the many jobs that depend on it – remains uncertain. With global co-operation and forward thinking policies, we can make it a bright one for both travellers, and the businesses, workers and communities that rely on tourism.

Big business

Tourism is big business. Prior to the pandemic, tourism directly contributed around 4.4% of GDP, 6.9% employment, and 21.5% of service exports in OECD countries, on average. But its footprint is even larger in countries like Mexico, Greece, Portugal and France, where it accounts for between 7-9% of GDP. And bigger still when indirect impacts of tourism are taken into account – which could double the overall contribution of tourism to GDP. The sector had been growing strongly. Global expenditures on travel had more than tripled since the turn of the century, and 2019 was the tenth consecutive year of growth in international tourist arrivals. And while the big five destinations of France, Spain, United States, China and Italy led the way,  countries like Finland, Israel, Korea, Lithuania, Slovenia, and Turkey were recording double digit growth in arrivals, while Australia, Canada, Greece, Hungary, Ireland, Poland and the Slovak Republic were seeing record numbers – providing new jobs, new businesses, and new hope for many communities.

Tourism Infographic

Packing up

The pandemic put a stop to this. 2020 saw a fall in international travel and tourism by around 75%. As travellers packed away their suitcases, businesses closed their doors – some forever. Most were small businesses – 85% of tourism businesses are SMEs, based in local communities and regions that are highly specialised and dependent on the tourism trade. European destinations such as the Ionian Islands in Greece, Balearic and Canary Islands in Spain, and the Algarve region in Portugal as well as large cities like Paris were particularly vulnerable given the importance of tourism in the local economy, alongside destinations like Jeju-do in Korea and Nevada in the US.

These impacts – though locally concentrated – sent shockwaves felt keenly at the national level too. Dependency on tourism pre-crisis better explains GDP impacts in 2020 than any other affected sector or even measures of the stringency of lockdowns.

Governments around the world put in place unprecedented support measures for businesses, including business grants, wage subsidies, loans and deferrals of payments. The tourism sector benefited from these, but many OECD countries also needed to introduce specific support measures. For example, Korea designated tourism as a sector eligible for special support, providing up to 90% of annual leave allowance for 6 months to support job retention in the sector to support job retention.

Bouncing back…

The widespread availability of vaccines and testing has since allowed for the partial lifting of travel restrictions. But there is a long way back for the sector. International air passenger demand (Measured in revenue passenger kilometres or RPKs) in July was down 73.6% compared to July 2019, an improvement on previous months, but still painfully far from what might be termed a recovery. Figures have been stronger for domestic travel, as many would-be globetrotters continued to opt for staycations: in July, domestic air passenger traffic was back to 85% of pre-crisis levels.

Or starting over…?

The sector may not be the same for a long time to come. Throughout the pandemic, travellers have shown new preferences for low tourist density destinations and outdoor activities away from big cities. Some of these behaviour shifts are likely to last.

That shift presents opportunities as well as challenges for destinations. In many regions and communities, rapid and unplanned growth in visitor numbers had delivered a model that was economically, socially and environmentally unbalanced.

Many countries are already seizing the opportunity to reconsider that model. For example, Colombia – where the tourism sector was experiencing rapid growth – has introduced a new National Sustainable Tourism Policy, underpinned by 14 new programmes to strengthen investment in sustainable tourism and its governance, promotion and measurement. In New Zealand’s Bay of Plenty, big plans are also afoot. Supported by the Government’s Tourism Recovery Package, their new action plan seeks to empower and engage the community in the future of tourism through “passion groups” involving local businesses, local authorities, iwi, passionate enthusiasts and other stakeholders.

Policymakers should take inspiration from these examples, and seize the opportunity to meet the urgent need to develop a new approach to tourism that has become unsustainable for both host communities and the environment.

If you want to have more details on the OECD Tourism data, join us 3-5 November 2021 for the 1st Global Forum on Tourism Statistics.

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Lamia Kamal-Chaoui is the Director of the OECD Centre for Entrepreneurship, SMEs, Regions and Cities since 2016.

As a key member of the OECD Executive Leadership team, Ms. Kamal-Chaoui supports the Secretary-General in achieving the OECD’s mission to advance economic growth and social progress as well as contributing to other global agendas such as the G20 and G7, the Paris Agreement on Climate Change and the implementation of the United Nations Sustainable Development Goals.

Supported by a team of over 160 staff, Ms. Kamal-Chaoui leads the Centre’s work to advance the OECD mission of “better policies for better lives” by ensuring that all people, all types of places and businesses of all sizes can prosper from green and digital transitions (read the Centre’s brochure and dedicated blog for more details). This includes work in the fields of: SME and entrepreneurship policyRegional, urban and rural  development;  Local employment and economic development (LEED programme);  Subnational statisticssocial economyMulti-level governance, local finance and decentralisationTourism and Culture.

Prior to being Director, Ms. Kamal-Chaoui has held several senior positions at the OECD since 1998. From 2012 to 2016, she served as Senior Advisor to the OECD Secretary-General. In this role, she supported the Secretary-General’s strategic agenda and led the OECD Inclusive Growth Initiative, the Knowledge-Sharing Alliance programme, the development of the Global Deal  and the implementation of the OECD Strategy on Development. From 2003 to 2012, she was Head of the Urban Programme in the OECD Directorate for Public Governance and Territorial Development.  Previously, she also worked in the OECD Trade Directorate and the OECD Directorate for Financial and Enterprise Affairs. Before joining the OECD, Ms. Kamal-Chaoui worked for a university-based research institute as well as several media outlets.

During her extensive career at the OECD, she has spearheaded several ground-breaking, multi-stakeholder OECD initiatives including the Roundtable for Mayors and Ministers, the Champion Mayors for Inclusive Growth Coalition, the Digital for SMEs (D4SMEs), and the StandbyYouth Initiative. She has also authored, co-authored, and overseen hundreds of policy reports and articles, and forged numerous strategic partnerships and collaborations with companies and international institutions. They include major philanthropic organisations (e.g. Ford Foundation, Bloomberg Philanthropies, Rockefeller Foundation, Kauffmann foundation, MacArthur Foundation, Open Society Foundations) as well as other prominent organisations (e.g. Vatican Pontifical Council of Justice and Peace, Club of Madrid), international civic organisations (e.g. Youth Forum, Ashoka Global) and multilateral institutions (e.g. World Bank, IADB, ADB, EBRD, European Commission, UN Habitat, APEC). She has also partnered with the private sector, including large corporations (e.g. Facebook, Amazon, Kakao, Microsoft, Vodafone) and business associations (e.g. International Chamber of Commerce (ICC), B4IG, SMEUnited).

Ms. Kamal-Chaoui has been a member of several International Committees and Advisory Boards (e.g. Lancet Green Recovery Task Force on COVID 19 recovery, C40 Women for Climate, UNWTO COVID-19 Crisis Group, World Economic Forum Deputy Board of Trustees, Vatican Expert Group on Inclusive Globalisation, Club of Madrid’s Shared Societies, Shanghai World Expo, Michael Bloomberg Mayors Challenge for Europe, Mayor of Paris Anne Hidalgo’s Strategic Committee). She has also been a lecturer at Sciences Po Paris for the “Governing Large Metropolis” Master’s Programme.

Ms. Kamal-Chaoui is a French and Moroccan national. She holds a Master’s Degree in Macroeconomics from the University of Paris Dauphine and a Master’s Degree in Foreign Languages and History from the University of Paris Diderot. She recently received the "Women of the Decade in Enterprise and Leadership" award of the Women's Economic Forum.