European Commission President Ursula von der Leyen has been urging people not to plan their summer vacations just yet. In Japan, the Olympics have been cancelled; in Europe – the Football Championship; in France, the annual International Theatre Festival in Avignon, which was meant to be held on 3-23 July. Airplanes are flying, though half empty, and the borders are closed. In just a month, the coronavirus has changed the world beyond recognition.
For the travel industry, what has happened is a complete disaster. And there are many signs that hard times will continue. Ukraine, which has taken adequate steps to develop its own tourism, is in a particularly vulnerable position. What package to ensure recovery is well worth considering.
Working in similes, coronavirus for the travel industry is akin to a bolt of lightning from a clear sky. If we look at Turkey for example, a country popular for tourism, the figures are indicative: in January-February, the country welcomed 3.52 million tourists, which is 9.69% more than just a year earlier. Since the spring, these numbers have shrunk to zero. So far, the country is counting on domestic tourism resources, but this, of course, is exhaustible and will not be able to make up for all losses.
According to a report from the World Economic Forum, the travel and tourism industry is at the top of the largest sectors of the international economy, with nearly 9 trillion USD in revenue annually. In 2019, there were 10 countries that benefited the most: Spain, France, Germany, Japan, USA, UK, Australia, Italy, Canada, and Switzerland. At least half of these countries have been seriously affected by the pandemic. How exactly and, most importantly, whether they can cope with the virus is now unknown. It is already understood, however, the number of jobs cut as well as those businesses in shut down. Canada alone is already talking about the closure of 61 000 businesses operating in the tourism industry. In this same report, McKinsey & Company demonstrate that 15 billion USD will be needed in the coming year to support the industry. Thus, the tourism sector is turning from one that is profitable to one that is subsidised.
Worldwide, from New Zealand and Australia to Europe, the US and Canada, governments are beginning to develop support and rescue plans for industries. Of course, attention to the industry is greater where its share in the country’s GDP is more significant. So far, Ukraine has only rescued tourists stuck abroad, but the industry itself has not been discussed. However, it is possible that this is not all bad – quick solutions are rarely effective, and there is little time to study the experience of other countries.
In neighbouring Poland, they came up with the idea of providing vouchers to the Poles who want to vacation at home. In this way, the state is trying to ‘fund’ tourism and, at the same time, provide a realistic option for locals. So far, however, it is not known exactly how and to whom the vouchers will be distributed.
Likewise, Australia has developed a systematic package of measures for various types of activities and the tourism industry (which has suffered severely not just from the epidemic, but also from forest fires) is one of the key countries on the list. Support will include significant tax benefits and even direct investment and compensation for salary costs.
Such measures may help Ukraine. At the same time, it is important that the state does not perceive the end of quarantine as curtailing support as New Zealand, for example, which, introduced rental and tax incentives throughout the period of strict quarantine, and has since decreased sources of income for tourism as restrictions become less strict.
At the end of last year, the Cabinet of Ministers approved a state program for the Development of the Ukrainian Carpathian Region for 2020-2022. Obviously, it must now be reviewed and amended. Perhaps supplements from other regions as well as companies focused on outside travel (no longer available) could pick up the slack. According to all forecasts, the tourism sector in the world will recover by 2023. The question is how many Ukrainian companies will survive this long. Perhaps it’s indeed time to throw out the life preserver. If we wait much longer there might be no one left to save.