Reference no: EM133400125

Case Study The exogenous threat of the 2020 COVID-19 pandemic on global tourism During the writing of Destination Marketing Essentials, many negative exogenous events occurred that were beyond the control of the tourism industry.

In particular, two natural disasters took place in late 2019 to early 2020, which had significant negative impacts on countless destinations, for which many DMOs would not have been prepared. One of these negative wildcard events affected many destinations in one country. The Australian bushfires raged from September until February, killing 33 people, destroying over 3000 homes, almost 20 million hectares of land, 1 billion wildlife such as koalas and farm livestock, and rendering many regional destination communities uncompetitive overnight. The ecological, socio-cultural and economic impacts will be felt in many of the affected areas for decades. The negative impacts of the bushfires on Australian tourism were discussed in Case study 5.1 in Chapter 5 - The destination marketing organisation, disasters, crises and dark tourism. A different type of natural disaster, which emerged in one part of the world, but impacted negatively on global tourism demand and the international economy was the outbreak of Coronavirus. The first case can be traced to 17 November 2019, in Wuhan, China (Global Travel Media, 2020). The virus was labelled COVID-19 and not declared a pandemic by the World Health Organisation until 12 March, 2020. At the time of writing in March 2020 the effects of the virus had not yet peaked. Different countries' health organisations were forecasting the pandemic to peak between June and September 2020. However, there was already significant disruption for the global economy. The following list highlights the range of impacts on the global travel industry during early 2020: Initial travel bans and travel advisories for visitors from China, Italy, Iran, Japan and South Korea, followed by many countries banning arrivals from non-residents (e.g. initially by the European Union and Australia). All international arrivals at some countries, including returning residents, legally required to self-isolate for 14 days (e.g. New Zealand announcement on 14 March). Restrictions on overseas travel for citizens of many countries, and the lockdown of all domestic travel by citizens, including residents' local travel except to buy food or visit healthcare (e.g. initially in China, Italy and France). Travel insurance companies ceasing coverage of any claims caused by COVID-19. Mass cancellations of travel arrangements by consumers. The International Air Transport Association (IATA) reporting no shows by up to 50% of travellers on some international flights in early March (Ironside, 2020). Airlines cutting capacity by up to 90-100% (e.g. Virgin Australia 100% of international flights and going into voluntary administration), resulting in massive jobs uncertainty (e.g. Qantas forced 20,000 staff to stand down and take paid and non-paid leave). By the end of February over 200,000 flights had been cancelled to, from and within China, representing two-thirds of schedules (Media, 2020b), and global airlines were facing an estimated $113 billion reduction in revenue, which would be as bad as the 2008 global financial crisis (IATA, 2020, in The Courier-Mail, 2020). United Airlines reported a loss of $2.1 billion for the first quarter of 2020. At the time of writing (March 2020) the UNWTO was forecasting a global fall in international visitor arrivals of 20-30% in 2020 (UNWTO, 2020). Closures of theme parks (e.g. Universal) and other major visitor attractions (e.g. Eiffel Tower). Closures of national parks (e.g. Mount Everest) and camping grounds. Mass mothballing of hotels due to low occupancy levels. Bans on public and private gatherings exceeding X number of people at outdoor and indoor venues (e.g. Bondi Beach in Sydney was closed for exceeding a 500-person limit on 21 March). Cancellations and postponements of major sporting events (e.g. Tokyo Olympic Games, Rugby Six Nations Championship, NBA basketball, English Premier League), Exhibitions (e.g. World Expo Dubai), conferences and trade exhibitions (e.g. ITB Berlin), music festivals (e.g. South by Southwest) and cultural festivals (e.g. Japan Cherry Blossom Festival). Major sporting events being held behind closed doors (e.g. Bahrain Grand Prix, Italy's Serie A football league, Australia's National Rugby League), with non-essential spectators banned. Cruise lines ceasing operations, while cruise ships already at sea banned entry into many ports. Some cruise ships held in quarantine, either at sea or in port, with passengers trapped on board. Miami-based Royal Caribbean Cruises, with a capital value of over $7 billion, suffered an 80% drop in share price from $135 to $19 between February and March (Allen, 2020). Suspension of trading on stock exchanges for many travel companies (e.g. Air New Zealand, Virgin Australia). Companies ordering staff to work from home and banning staff from any non-essential travel. Cessation of reconstruction works at Notre Dame cathedral in Paris, which had been ravaged by fire in April 2019. By March 2020 these and other actions already had a devastating effect on the global travel industry, in terms of business closures and job losses. It was difficult at this time to forecast whether or when there might be a return to normal tourism from the threat of COVID-19. Note During COVID-19, Professor Alan Lew of Northern Arizona University was facilitating a list of the calls for papers for journal special issues and for chapters in edited books related to the pandemic at: www.tourismtransformed.com/cfps.html. As at the end of March 2020, there were at least ten journal special issues and five edited books listed.

Discussion question Why should this type of event now be listed as a threat in the marketing plan situation analysis for every DMO, and what action should be considered?

Other questions to consider after March 2020 Since this book was being finalised in March 2020, it is unknown what the full extent of the impact of the virus would be. To what extent was the tourism industry affected at your destination? Also, with the benefit of hindsight, how similar was consumer sentiment to "SARS induced panic", proposed by McKercher (2003), and did over-reactions by governments and consumers create more negative impacts than the virus?