April 07, 2021 Aaron Szyf, Economist , U.S. Travel Association
The World Travel & Tourism Council (WTTC) recently released its annual Economic Impact Report. It revealed the devastating impact of the pandemic on global travel, which suffered a loss of almost $4.5 trillion. International travel spending globally plummeted by 69% in 2020, slightly less than the 76% decline in international travel spending in the U.S. Domestic travel spending fell by a lower 45% thanks to internal travel that still took place in some countries.
Since the U.S. is one of those key markets that managed to sustain a moderate level of domestic travel throughout the pandemic, domestic travel spending in the U.S. declined by a comparatively smaller 36% in 2020.
Due to the disproportionate loss in the travel industry compared to the overall global economy, the sector’s contribution to global GDP fell from 10.4% in 2019 to just 5.5% in 2020. This translates into a 49% decline in travel’s global economic output, compared to a 42% decline in travel’s economic output in the U.S.
More than 62 million travel jobs were lost globally—a drop of 19%. This number would have been exponentially higher if not for government retention schemes that supported travel jobs in many countries around the world. In the U.S., travel jobs declined by a significantly higher 34% in 2020.
WTTC predicts a possible return of travel jobs to 2019 levels (both globally and for the U.S.) by 2022 and travel’s contribution to GDP by 2023 if the global vaccine rollout continues at pace and travel restrictions are relaxed prior to the 2021 summer season. It must be noted that this is a “best case” scenario. There are possible downside risks, including a slower relaxation of restrictions, slower vaccine rollout or a premature phasing out of government job protection schemes that can slow the recovery.
U.S. Travel’s forecast—which focuses on travel spending rather than jobs or contribution to GDP—calls for a longer recovery timeline for the U.S. travel industry (2024/2025) since it is predicated on a “baseline scenario” that takes these risks into account.
|Aaron Szyf is an economist at the U.S. Travel Association. View Profile ›|