- ECONOMIC IMPACT -

Latest update: 18 November 

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

Stronger than expected performance in Q2 and Q3 resulted in an upwards revision of global real GDP growth in 2020.

-4.4%

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

30.8%

Unemployment rate in South Africa reached a 17-year high of 30.8% in Q3 2020.

Impact of Covid-19 on equity indices

- SECTOR IMPACT: TRAVEL AND TOURISM -

Latest update: 04 November 

Tourism market imapact

37.9%

Spending will fall broadly in line with the decline in tourism flows. GlobalData forecasts that inbound expenditure globally will fall by 37.9% in 2020.

34.8%

GlobalData forecasts that international arrivals into the 62 largest tourism markets will fall by 34.8% in 2020. Many countries continue to struggle. An increase in the number of Covid-19 cases and widespread travel restrictions across Europe mean that these figures could well be worse than originally projected. This is suppressing demand.

Demand disruption

Traveler confidence has been significantly damaged. Ever-changing travel corridors and quarantine measures, coupled with somewhat opaque refund policies have caused would-be bookers to remain cautious.


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.

TRAVEL & TOURISM MITIGATION STRATEGIES

Short term (six to 12 months)

Covid-19 has hit the tourism industry hard. While it is predicted that 2020 will bear the brunt of disruption, it is impossible to say when travel will return to 2019 levels. Over the coming months, players at all stages of the value chain will need to focus on survival.


For the hotel industry, this may require decision makers to implement cost-cutting measures and/or secure credit and government funding. Hoteliers should also focus on promoting high hygiene standards to instil confidence in potential guests.


Mid-term (one to three years)

Decision makers should assess how demands and expectations may change and adjust their product and marketing strategies accordingly. For example, by investing in marketing campaigns to entice international visitors or tapping into the momentum that domestic tourism gained during global travel restrictions.


Long-term (three to five years)

One key challenge that hotels face is the possible long-term shift to reduced business travel as people have become more confident in videoconferencing.


However, customer behaviour will not be static so hotels should continue to re-evaluate and adapt branding and services.

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