Economy

COVID-19 and employment in the tourism sector

Impact and response in Asia and the Pacific

The global impact of COVID-19 on the tourism sector is devastating.  In the Asia-Pacific region, the impact on economies and labour markets was felt from an early stage, mainly through the tourism sector. In many countries of the region, tourism started to decline rapidly, driven by a significant decrease in tourism arrivals from China, which in many countries account for a large share of tourism revenues.  As the number of coronavirus infections increased outside China, international travel restrictions started to widen within the region. With the further spread of the virus, also tourists from outside the region cancelled their previously planned trips, given the increased level of uncertainty in both safety and travel restrictions.

In the course of March 2020, with the outbreak of COVID-19 in Europe, the United States and all other parts of the world, international tourism essentially came to a halt. With lockdown measures that governments have implemented in many countries and stay-at-home recommendations, also domestic tourism took a hit.

Key findings from the report are

  • As a major source of revenue and jobs in the Asia-Pacific region, the COVID-19 induced collapse of the tourism sector is an important factor behind the IMF projections of stalled economic growth for 2020. The impact on the tourism sector in the region was felt from an early stage when the number of tourists for China declined abruptly. Now, with the virus spread across the globe, as much as 96 per cent of the world’s destinations impose some form of travel restriction according to the UN World Tourism Organization.
  • With tourism as a hard hit sector, the higher the share of employment in tourism, the harsher the impact to workers and economies. Among the countries with available data, the shares of employment in tourism in Asia and the Pacific can run as high as of 10 to 12 per cent in some Pacific Islands countries. In South-East Asia, Cambodia, Thailand and Viet Nam are the countries with the highest share of employment in tourism, reaching 6.7, 9.0 and 6.9 per cent, respectively. In South Asia, Nepal and Sri Lanka show relatively high shares of jobs in tourism, reaching 8.1 and 6.8 per cent.
  • For 14 countries with available data, the ILO estimates that the jobs and livelihoods of at least 15.3 million workers – 6.4 million women and 8.9 million men – in the tourism sector are at risk as a result of the COVID-19 pandemic.  Staff of airlines, hotels, travel agencies and transport companies across the region are being asked to take paid or unpaid leave, accept reduced wages, or worse, are simply let go. In an examination of first quarter labour force survey results in Thailand, early signs of the adverse labour market impact appear with the decline in employment in tourism from January 2020 onwards and with a sharp increase in the number of persons employed but absent from work in the first three months of the year. With the impact of major lock-down measures imposed in March not yet reflected in the data, the full extent of the impact on the sector is expected to appear from the second quarter.
  • In many Asia and Pacific countries, more than three in four workers in the tourism sector are in informal jobs, leaving them especially vulnerable to the negative impacts of the COVID-19 crisis. Informal sector jobs are characterized by a lack of basic protection, including social protection coverage. Workers that continue on the job in hotels, airlines or other hospitality industries typically do not have the option to work remotely, and therefore have a heightened risk of COVID-19 infection. For those who do fall ill, as informal workers they may be disadvantaged in access to health-care services and have no income replacement if they stop working in case of sickness or lock-downs.
  • Governments in the region have reacted to the crisis by introducing stimulus packages and other policies in direct support to the tourism industry. Some policy responses are highlighted in the report, as is the message that social dialogue will prove to be a critical element in in determining how well the tourism sector and its workers will weather this unprecedented crisis.
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