Economist Perspectives

Pandemic Impacts on City Tourism

The coronavirus pandemic has deeply impacted city tourism, with global city arrivals forecast to decline 58% in 2020, equating to the loss of 373mn visitor arrivals for the 309 cities covered in our GCT service. The scale of the outbreak in North America combined with strict travel bans mean that North American cities are forecast the greatest percent decline in 2020 at 73%, with US cities accounting for over 80% of this decline. Many tourists remain hesitant to visit densely populated city destinations due to persistent fears of exposure to the virus. Therefore, all other world regions will experience a greater than 50% decline in international visitor arrivals in 2020. 

In 2019, Bangkok was the most visited city by international tourists receiving 22.5mn visitor arrivals. However, strict restrictions on international travel in Thailand have hindered the city’s travel recovery, with Bangkok set to suffer the greatest loss in visitor arrivals in 2020 at 14.5mn. The global pandemic combined with the enduring civil unrest in Hong Kong has shattered travel demand to the city, with a 13.5mn loss in visitor arrivals forecast for 2020. Thus, Hong Kong is forecast to fall out of the top 3 most visited cities globally to 10th position in 2020. New York is set to be the hardest-hit US city, suffering the greatest loss in visitor arrivals at 10.7mn and will significantly drop in the global rankings for international arrivals from 6th to 27th in 2020.

Domestic city tourism provides a more promising outlook, with domestic arrivals to Asian Pacific and North American cities returning to 2019 levels by 2022. An upward trend has been seen across both regions for domestic travel as citizens have been allowed to travel domestically again. The remaining regions (Europe, Latin America and Middle East & Africa) will see domestic city arrivals reach 2019 levels again by 2023.  A large domestic market in North American and Asian Pacific cities will render these cities less exposed to the substantial drop in international travel and will facilitate a less volatile travel recovery. Domestic travel restrictions have been eased at a quicker rate than international travel restrictions and they have not faced the same level of uncertainty and fluctuation as international travel arrangements. Therefore, domestic travel has benefited from considerable substitution effects, with many tourists opting for "staycations" over international trips, which will support a swifter return to pre-crisis levels.

A smaller reliance on long-haul travel will also facilitate a quicker recovery as long-haul trips are likely to take the longest time to return to 2019 levels, due to enduring travel restrictions and a lingering negative sentiment towards long-haul trips. Therefore, the recovery of European and Latin American cities will benefit from their lower dependency on long-haul markets, while the Middle Eastern and African cities possess a less resilient travel demand as over half of their international arrivals are attributable to long-haul markets.




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