This report is part of a World Bank Group Global Engagement project that seeks
to understand and respond to the impacts of COVID-19 on the global Tourism sector, and to support its recovery.The COVID-19 pandemic and the sudden demand-side contractions in travel and tourism activities during 2020 and 2021 precipitated unprecedented shocks to the entire global tourism economy, resulting in broader macroeconomic implications, particularly for highly tourism dependent countries.
The report provides insights regarding the types of interventions governments have already implemented and policy considerations for supporting the recovery and resilience of the tourism sector going forward, particularly in light of structural demand and supply-side transformations precipitated or accelerated by COVID-19. This report studies the challenges for recovery faced by governments and the sector from the context of preexisting market and government failures that have been exacerbated by the crisis, as well as those emerging from the pandemic.
The report includes several key findings and recommendations:
· The pandemic highlighted the complexities of tourism for development outcomes, and the depth and breadth of the tourism value chain and its linkages.
· All tourism sub-sectors and their suppliers have been impacted; however, distributional impacts and transmission channels vary, as does the implementation of and access to support programs.
· The tourism sector is expected to emerge stronger and more profitable than pre-COVID, but unless it is properly structured and managed, it may result in a more unequal landscape with a narrower set of beneficiaries.
· When evaluating continued or future firm-level specific support, governments may want to follow market-principles, prioritizing market facilitation wherever possible, while considering unintended effects of support programs.
· The pandemic has created opportunities for increased sector innovation, productivity and development impact. Specific policies, instruments and initiatives should be put in place to seize this moment to rebuild towards a more competitive, resilient, green and inclusive sectors, incentivizing tourism types that generate positive externalities while discouraging negative ones.