US Travel Restrictions Bring 700 Billion Dollars in Damage to the World Economy

Since March 2020, the US government has banned international travel to contain the spread of the coronavirus. Losses in the travel and tourism sector adversely affected other closely linked sectors such as food, beverage, retail trade, communications and transportation, contributing to serious job losses and lower employment rates.

The tourism industry has been hit hard by the pandemic, as airlines, accommodation companies, travel firms and other small businesses dependent on international tourist companies have been banned. According to a United Nations report, the collapse in international tourism could cost global GDP $4 trillion for 2020 and 2021. International travel bans and limited travel activity caused by the COVID-19 pandemic have resulted in economic and human losses. Two out of every five jobs lost in the US due to the pandemic were lost in the travel, tourism and aircraft manufacturing sectors. Current estimates suggest that the employment rate in the tourism sector is not expected to return to pre-COVID levels before 2024 or 2025.

The world’s leading hotel chains such as Wyndham Worldwide, Choice Hotels, Marriott International and Hilton Worldwide Holdings lost US$14 billion in revenue due to travel restrictions. The US hosted around 80 million international visitors in 2019, and that number could be even greater in 2021 if it weren’t for travel restrictions for visitors from the European Union, UK, China and India.

Europe’s Economy Shrinks Due to US Travel Ban:

The fact of not coming from the USA is having a bad effect on the European tourism industry. Europe is the world’s leading tourism destination, with one in ten businesses belonging to the tourism industry. The hospitality sector accounts for 80% of the EU tourism workforce and 2 million businesses. According to the European Commission, the US is Europe’s main long-haul inbound market in terms of tourist arrivals and spending. North America is the most important origin market for EU countries, contributing approximately US$ 70 billion annually to EU countries.

Americans represent about 8% of the 89 million foreign tourists in France each year, while 6 million of the 37 million foreign tourists in Germany are Americans. The tourism sector in Spain accounts for about 12% of the country’s GDP. In the three months from May to June in 2021, prohibited tourism caused US$9.79 billion in losses to Switzerland, with US visitors contributing the biggest increase. The European Association of Tour Operators (ETOA) is finding a solution to welcome non-essential travelers from the US again to avoid billions of dollars lost again in 2021.

US pandemic restrictions continue to prevent business travel to European Union countries, especially Germany. Germany is one of the largest providers of Foreign Direct Investment in the USA. However, the US administration’s decision to reinstate and restore pandemic travel restrictions has disappointed Germany’s business leaders. From experts who can’t travel to assist with technical issues, to new businesses lost due to the difficulties of meeting potential customers, travel restrictions are hindering businesses in a number of ways. While telecommuting solutions can alleviate difficulties, routine business visits are essential to personally recruiting and starting US investments.

Hospitality Industry Faces Worst Hit:

The hotel industry is one of the sectors hardest hit by the COVID-19 pandemic and a full recovery is not expected until 2024. Most hotels in the US, especially luxury hotels, are closed due to low traffic, while others are closed. The occupancy rate reaches 15%. According to the American Hotel and Lodging Association’s State of the Hotel Industry 2021 report, more than 600,000 hotel industry operating jobs and nearly 4 million hospitality jobs have been lost due to the pandemic. Business travel will drop drastically, with hotel occupancy expected to drop 85% in 2021 compared to 2019. Post-pandemic budget hotels are expected to reap the fastest returns as they can take advantage of demand segments that remain relatively healthy. despite travel restrictions. The ban on international travel has serious implications for a variety of international tourist catering establishments, as international tourists tend to stay in hotels longer and spend more on services than domestic visitors.

Aviation Sector Hopes to Lift International Travel Bans:

Aviation is the most important international sector, negatively impacted by repeated travel bans and curfews and suffering billions of dollars in losses. While passenger traffic has decreased due to past events such as 9/11. SARS, etc., prolonged air traffic shutdowns devastated the airline industry and brought airports to a virtual standstill. While countries have moved away from quarantine, many countries have opted for partial or full restrictive regulations in the first half of 2021. Major airlines are pressing Biden’s government to relax COVID-19 restrictions preventing passengers from entering the US. Other countries began to relax their bans. Since March 2020, the USA has banned almost all non-US citizens from countries such as the UK, South Africa, Brazil, India and Iran.

The United Kingdom is America’s seventh largest trading partner, but blocked air services between the two countries have been eliminated since March 2020. The heads of British Airways and Virgin Atlantic, along with the CEO of London Heathrow Airport, are begging American President Joe Biden to act quickly to lift the ban to save the snowy summer air travel season between the two countries. Not just the airline industry, hotels and other travel and tourism interests are at stake.

MICE Industry Loses Big MICE:

A general term for the event industry that positively impacts the economy of an entire city, country or region. Large international congresses increase the number of visitors to hotels and increase the consumption of local services. In recent years, the MICE industry has supported the economies of many destinations until the COVID-19 pandemic, which has halted events and business travel. While 53% of tourists travel for pleasure or vacation, 14% travel for professional reasons but provide significant economic benefits to the region.

In the US, the MICE industry creates nearly one million jobs in large cities as well as small towns, accounting for 15% of all trips nationwide. However, Barcelona and Madrid continue to be the most preferred destinations for business tourism. As only a few countries have reopened the MICE sector, most are focusing on local conferences and exhibitions. For example, the city of Tokyo is expected to welcome 25 million foreign visitors for the large-scale Olympics event, where an aggressive tourism development strategy is being implemented in the city. However, the ban on spectators could dampen the economic gains from the Tokyo Olympics during the COVID-19 resurgence.

How Vaccines Can Affect Future Travel Plans:

As of July 2021, more than 49.6% of the US population and more than 13.7% of the world’s population have received at least a single dose of the vaccine. Although the interest in getting vaccinated varies from person to person, the desire to travel does not. According to a recent survey by Hilton, about 95% of Americans miss traveling. However, the choice of whether to get vaccinated may affect future travel plans.

No country has made vaccination a mandatory requirement, but countries with tight border restrictions and low COVID-19 rates, such as New Zealand, may require travelers to get vaccinated before visiting. Singapore has also hinted that unvaccinated travelers may need to undergo quarantine and additional testing. However, a comprehensive vaccination requirement would discriminate against those under the age of 18 and those who have not yet been vaccinated. Also, many major airlines are awaiting government guidance to make vaccination a requirement before international travel. While some believe that imposing a vaccine requirement could bring back flyers faster, others call the concept a “true logistical nightmare” given slow vaccine delivery rates.

The hotel industry may consider asking guests to be vaccinated after international travel bans are lifted. Any major hotel brand that takes this stance can attract the “Covid-safe” and wealthy market. Also, hotel conferences may require attendees to be vaccinated, as many people will share the indoor space and meals. However, there is no instruction yet from the government to make such a mandate.

Solution

The link between the US and the UK is one of the biggest engines of the global economy, and the ban on transatlantic travel and trade puts jobs, livelihoods and economic opportunities between countries at risk. Infused business and leisure customers are eager to travel internationally, which can be a huge boost to the growth of the US and other countries. Now that health conditions appear to be improving in the US due to massive vaccination efforts, the resumption of air services may be expected sooner.