Covid-19 briefing

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- ECONOMIC IMPACT -

Latest update: 21 October 

Many economists have cut their GDP forecasts. The 2020 consensus forecast for GDP growth is currently negative and many predict a recession.

World Trade Organization forecasts the volume of world merchandise trade to shrink by 9.2% in 2020 followed by an estimated rise of 7.2% in 2021.

-4.4%

IMF has revised its 2020 global GDP forecast to -4.4% from an estimate of -4.9% made in June.

5.3%

The global economy is estimated to contract by 4.2% in 2020 and bounce back by 5.3% in 2021.

Impact of Covid-19 on Travel and Tourism

- SECTOR IMPACT: Travel and tourism -

Latest update: 4 November 

International travel impact

34.8%

GlobalData forecasts that international arrivals into the 62 largest tourism markets will fall by 34.8%

1,000

After resuming flights with China, Japan envisages allowing 1,000 business travellers, student and foreign residents to enter per day. (24 September)

Country Focus

The UK, the Netherlands, the Czech Republic and Belgium have been added to Italy's list of high-risk countries. Covid-19 tests are mandatory for travellers from these nations (7 October). 

In Canada, travel restrictions on international travellers has been extended until 31 October (29 September) but borders have been opened for extended family members of Canadians from 8 October onwards (2 October). 

Japan is to lift overseas travel restrictions to 12 countries including China, Australia, South Korea, Malaysia and Taiwan among others by next month (9 October).

Russia has resumed flights with Serbia and Cuba from 15 October, with South Korea from 27 September, and with Belarus, Kyrgyzstan and Kazakhstan from 21 September (19 September).

Key travel and tourism market developments

American Airlines and United Airlines announced plans to cut 16,000 and 19,000 jobs respectively. Disney announced plans to eliminate 28,000 theme park jobs in the United States, a decision it described as 'heartbreaking' but 'the only feasible option we have.'

Demand remains extremely subdued and the scaling back of planned flight increases shows that the expected uptick has not materialised to the extent that was hoped for. The key summer period has now passed in many countries and renewed travel restrictions and quarantine measures have checked any momentum that was building.

October was characterised by announcements of new lockdown measures across much of Europe. A month-long nationwide lockdown was announced in England, following a similar announcement in France. Czechia, Germany, Italy, Poland, and Portugal among others have all announced more stringent restrictions and this will obviously impact demand.

Confusion and dissatisfaction over refund policies are also at play as people become increasingly concerned about their personal financial situation. Ryanair has announced it will not offer cash refunds for people that choose not to fly on a flight that is operating. They will instead be permitted to rebook to a flight at a different time for no fee. This will do little to encourage people to book.