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Global tourism may take 4 years to return to 2019 levels: McKinsey & Company - Daily News Egypt

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Global tourism may take 4 years to return to 2019 levels: McKinsey & Company

Egypt’s tourism revenues could return to 2019 levels by 2023, but recovery in numbers will not be before 2024, says pundit


Global tourism’s recovery may take until as late as 2024 to return to its 2019 levels, according to the latest report by management consulting firm, McKinsey & Company.

The report said that global tourism has been one of the most affected sectors during the novel coronavirus (COVID-19) crisis.

McKinsey & Company’s tourism recovery model forecasts a cumulative drop of $3trn to $8trn, before tourism expenditure returns to pre-COVID-19 levels. It added that global tourism expenditures may be up to $8.1trn lower than pre-COVID-19 projections. 

“Recovery will be slow and driven by the underlying dependencies countries had on domestic and non-air travel,” the report said, “Different countries, therefore, should prepare for their own recovery curves and re-imagine their tourism sectors, as well as the support they provide differently.”

Elhamy El-Zayat, former Chairperson of the Egyptian Tourism Federation (ETF), told Daily News Egypt that Egypt has, like other countries, been negatively affected by the global health crisis. However, El-Zayat added that he expects that Egypt could achieve a return to the 2019 revenue levels from tourism by 2023, while the recovery in terms of numbers will be as late as 2024.

He said that the key driver behind the revenues recovery will be due to cultural tourism, for which tourists are excited, and which provides greater revenues than other types of tourism to Egypt.

El-Zayat added that the tourism sector’s recovery will take time, particularly as there are currently fears that a second wave of COVID-19 will take a grip. Some countries have already started experiencing a second wave, causing many potential travellers to have second thoughts on travel decisions.

Following the crisis, people will also think twice before travelling, due to the economic impacts of COVID-19, causing a knock-on effect for the global tourism industry.

El-Zayat added that Egypt’s tourism industry also has to take into account the severe economic repercussions of COVID-19 on airlines, many of whom are on the edge of collapse. This is particularly relevant for Egypt, as 94% of visitors to the country fly in. 

Figures released by the Central Bank of Egypt (CBE) show that Egypt’s tourism revenue figures for 2019 broke the peak annual revenues recorded in 2010, with the country reaping in $13.03bn during the former, compared to $12.5bn during the latter.

Meanwhile, an estimated 13.1 million tourists visited Egypt in 2019, which remains lower than the 2010 peak of 14.7 million tourists, the CBE figures also revealed.

McKinsey & Company said that while the post-COVID-19 tourism recovery will be primarily driven by the strength of economic recovery, five key drivers are likely to impact the recovery trajectory. Managing those concerns is key to driving a turnaround in tourism.

The firm noted that the five impact drivers that provide a perspective on tourist behaviour in light of the pandemic are: attractiveness of domestic destinations (high impact); the materiality of air transport (medium impact); health and hygiene factors (medium impact); importance of business travel (medium impact); and sustainability (low impact). 

The report explained that the intrinsic attractiveness of domestic destinations is a core driver for sustaining domestic travel, and supporting substitution of outbound trips. Meanwhile, tourism’s dependence on air travel is expected to have a strong effect due to the health concerns and potential supply reductions.

The report also said that the health standards in destination countries and insurance policies will increasingly affect traveller decision making.

“The impact on business travellers is typically more pronounced than leisure segments, and depends on local dynamics,” McKinsey & Company noted.

It also mentioned that a higher awareness of the environmental impacts of tourism and travel is likely to affect travel decisions in the coming period.

  

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https://dailyfeed.dailynewsegypt.com/2020/10/26/global-tourism-may-take-4-years-to-return-to-2019-levels-mckinsey-company/
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