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Impact of Covid-19 on the Hospitality, Travel, and Leisure Sector

The Covid-19 pandemic has made a deep and lasting impression on the lives of millions of people, endangering not only their health but their livelihoods as well. As the world begins to contract and borders are closed, whole industry sectors have been devasated to an extent unimaginable even at the start of the year.

Arguably no part of the economy has been more devastated by the hospitality, travel and leisure sector due to international travel restrictions, laws on social distancing and rapidly changing government responses to a rapidly evolving health situation, Support packages and furlough schemes have helped cushion some of the blows, but many smaller, and even such larger companies, will not survive, and many who work in this sector face a very uncertain future.

Of course, the picture is not unremittingly black. Some businesses have actually thrived during the lockdown, particularly those in the digital space. Amazon, for example, reported its biggest profits in its history at the end of July, with third-quarter earnings and sales exceeding all analysts’ expectations.

People forced to spend more time at home or by themselves are turning to the internet, which means for example that an online casino in Ireland can expect 2020 to be a bumper year. That is not necessarily a good thing. A UK survey has recently revealed that 52% of online gamblers increased the amount they spent during national lockdown as a way of reliving the boredom. And that includes one in five problem gamblers, and a 12% increase from those who identified themselves as moderate gamblers.

This switch to online consumption is likely to continue. Already the health minister in Scotland has advised people there to prepare for a digital Christmas, with family celebrations likely to be conducted on Zoom.

Nor is there likely to be any upside soon. French President Emmanuel Macron has warned his citizens that they will be fighting the virus at least until the middle of next year, whilst the US has just recorded a record daily high of Covid-19 cases.

Globally, the economic impact of the pandemic on the hospitality, travel and leisure sectors is likely to be truly staggering.

Take tourism, which currently accounts for 10% of global GDP. The World Travel and Tourism Council (WT&TC) has estimated that the pandemic could cost nearly 50 million jobs world-wide, in the travel and tourism industry, with Asia likely to suffer the greatest impact with 30 million jobs at risk.

Meanwhile, another study has suggested the loss of travel related economic output in 2020 will be US $910 billion – that is seven times greater than the post 9/11 impact.

All this means that, when the world finally emerges on the other side of the pandemic, and people are able to travel once more, they are likely to face a reduced choice. Their favourite airline might not exist anymore, their preferred hotel will remain shuttered, and many of the pubs, bars, cafes and restaurants they liked to visit will just be historical memories.

And it may also extend into the sporting arena, where hundreds of clubs and sporting associations which have been bedrocks of local communities for years may simply disappear.

In September FIFA predicted that the pandemic will cost the sport of football US $14 billion this year – that is a third of the game’s global economic value. When those losses are projected on to all the other sports and leisure activities, then the numbers become truly mind-boggling.

In summary, apart from the immense cost to people’s physical and mental health, the pandemic is likely to cause almost incalculable damage to the hospitality, travel and leisure sector. There will be some winners, but there will be hundreds of thousands of losers.