17.08.2020 Interview of Prof. Farzanegan with Deutsche Welle (DW) News on Coronavirus Tourism

Foto: Colourbox.de

At 4 August 2020, DW News discussed the tourism during COVID-19 with Prof. Mohammad Farzanegan. Watch the interview on “How to restart tourism during a pandemic? | COVID-19 Special” at: https://www.youtube.com

 Following you can read a summary of (unedited) Q&A related to the talk of Coronavirus Tourism.

1) You've done a study that shows a relationship between international tourism and the coronavirus outbreak. Could you tell us how tourism impacts the spread of Covid19, were you able to track that spread or identify hotspots? 

MF: We examined the relationship between international tourism and CVOID19 cases and associated death in more than 90 countries. Controlling for other factors which may shape the COVID 19 fatalities such as health, demography and level of income, we found a significant positive association between past records of openness to tourism and current numbers of countries regarding Covid19. We show that a 1% higher level of inbound and outbound tourism is associated with 1.2% and 1.4% higher levels of confirmed Covid19 cases and deaths, respectively. Tourism industry is based on human mobility which has been shown to be an important factor in outbreak of Covid19. Cruise tourism maybe was one of the main critical players in spread of Covid19. Key cruise industry players such as Carnival, Royal Caribbean and Norwegian witnessed a rapid rise in COVID19 among passengers and crew members. Given that spread of COVID19 relies heavily on human-to-human interactions, the movement of people internationally could be a determinant driver of outbreak and its magnitude.

2) What about countries whose economies are strongly dependent on tourism? They can't replace their revenue sources every night, what can they do?

MF: Low and middle-income countries are more dependent on international tourism revenues compare to high income countries. For example, the international tourism revenues was around 14% to export revenues in low income countries while this number is around 7% in high income group. In short term, low income countries will need international assistance in a form of development and emergency aid in order to keep their economic and political system functioning and reduce the risk of instability and conflict which may have much higher costs not only for them but also for global community. In middle and long term, it is important that such countries plan to diversify their economies and reduce their high dependency on international tourism. Increasing the share of other sectors such as agriculture and manufacturing besides the institutional reforms may help them to reduce their vulnerability against such global shocks. Establishing tourism stabilization fund in which like oil rich economies, part of annual unexpected increase in tourism revenues deposited in the fund for the rainy days like now. Tourism dependent low developing countries can learn good lessons from experience of oil based economies to manage the negative oil shocks on their economies.

3) Which countries are the most disadvantaged when it comes to a coronavirus-induced drop in tourism?  

MF: When we look at list of countries which have received the most number of international tourists in 2018, we see that more than 60% of arrivals are in high income countries from which Europe has the share of almost 30%. Also from the top 20 destinations for tourists in 2020, 50% of them are located in Europe, 30% in Asia and 20% in America. The top five destinations for tourists in 2018 were France, Spain, USA, China and Italy. The travel restrictions in 2020 have of course reduce the number of such trip to these countries and may reduce their receipts of international tourism. Nevertheless, as said before, the share of revenues from international tourism in the economy of high-income countries is relatively low or moderate. Thus, they are much less vulnerable with respect to Covid19 negative shock compared to low income countries. For example, the share of tourism receipts in GDP in Lebanon is 16%, a country which is already dealing with variety of financial and political crisis. Or in Jordan it is 15%. In contrast, the share of tourism revenues in GDP of France (the most attractive destination for tourists) is only 2.6%. Or in USA, this ratio is about 1.2%.

4)  How does the tourism industry need to change in order to survive and keep people safe?

MF: Innovating and investing in tourism. Governments need to ensure that the sector will be ready to resume and keep on innovating and transforming. In addition, investments will be needed to make structural changes to meet health requirements and visitors expectations in the first phase of recovery and in the long term. We need to re-think about the tourism sector. How digitalization may help the firms in this industry to not only reduce their business costs and increase efficiency but also provide access to key information on health issues for customers and regaining their trust. Institutional reforms at country level in countries with more dependency on tourism such as establishing tourism stabilization fund which protect the economy from positive and negative shocks in tourism revenues.