Study: The Impact of COVID-19 on the Travel Industry

In 2019, the tourism industry was firing on all cylinders. According to Statista, the sector contributed $2.9 trillion (USD) to global GDP. That’s more than the output of some entire countries, including Britain, France, and Canada.

With COVID-19’s spread, however, this boom has all but come to a standstill as of April 2020. In the United States alone, analysts project a $24 billion loss of foreign tourism revenue, the worst decline since 9/11.

In an attempt to humanize this staggering data, we polled more than 660 people from around the globe.

What follows is an analysis that will hopefully help you contextualize just how severely everyday travel plans have been disrupted.

Respondents’ Travel Behavior in 2019

Most of the people we polled traveled between 2-5 times over the course of 2019.

The vast majority (79%) of those trips were for leisure. 15% of trips were business related. Respondents who chose “other” often listed visiting family and pursuing studies abroad as reasons for their trips.

Statistics from the United States (home to the world’s largest tourism industry) are similar, with business trips taking up 12% of airline fares compared to 80% for leisure.

Based on this correlation, we’re confident that we succeeded in polling a segment that’s fairly representative of tourists. This should bode well for the effectiveness of our analysis in communicating how travelers as a whole have been affected by COVID-19.

How Travel Behaviors Have Changed Due to COVID-19

Tourists Overwhelmingly Expect to Spend Less in 2020

The largest chunk of respondents to our poll reported spending between $1,000 and $2,000 on travel in 2019. Those who spent between $2,000 and $5,000 were not far behind, comprising 13% of the group.

56% of those polled say they plan on lowering their travel expenses for 2020.

There are several reasons to explain this finding.

Firstly, borders all over the world have been closed in an attempt to control the spread of the coronavirus.

“I won’t book travel until this covid-19 mess has resolved. Unfortunately I probably won’t travel at all for the next 2-4 months depending on how things work out.”

A respondent’s reason for his travel budget cutbacks.

Even the European Union, a region with intentionally porous borders, devolved into a collection of sealed-off member countries because of the pandemic. As a result, many people are forgoing trips altogether. This is confirmed by our study: 71% of Europeans plan to cut their travel spending for 2020.

Indeed, many of the people polled already canceled some or all of their trips for this year:

“I was planning to go to Singapore, but that got scrapped with the new travel restrictions.”

“I was planning to go to Germany, then this happened and I’ve had to postpone my trip indefinitely.”

“I had three trips planned for this year and they’re canceled by now.”

“I had a trip abroad planned for April that had to be canceled. My biggest uncertainty is when travel will be advisable again.”

“Cancelled a scheduled trip to Greece for May 2020.”

Respondents canceling trips for 2020.

Secondly, with now more than 22 million people unemployed in the United States, many people have to cut non-vital expenses. This is confirmed by one of our respondents:

“I was planning on travelling internationally to visit family (Hawaii, Japan) and hoping to sight-see if I had the money…but I don’t think that’s possible now. Even if the virus did die down, I’m jobless, homeless, with very little money in savings.”

With growing fears of a worldwide economic recession, we expect travelers to cut their spending even further.

Thirdly, and another negative trend to consider for the industry, is that the cost of traveling has plummeted to match the historically-low demand. Those who do travel will spend far less money on it.

A slight glimpse of hope seems to come from the business travelers polled: only 43% plan to reduce their travel budget. This is in contrast to 58% of leisure-focused travelers.

People Feel Very Unsafe About Means of Mass Transportation

68% of our group claimed to have traveled by airplane during 2019.

This number may be on the way down if attitudes revealed in our poll hold true for the rest of the year. Only 32% said they felt comfortable traveling by plane this year.

Yet, one segment shows more confidence than the rest of the population in using airplanes: business travelers (43% stated that they intend to use planes in 2020). This stands in a clear contrast to the 29% of leisure-focused tourists who feel comfortable traveling by plane for the rest of the year.

Besides air travel, trains, buses, ride-sharing, and cruises are also viewed with skepticism.

Cars, meanwhile, remain the favorite by far. A whopping 74% of people feel confident traveling in their own vehicles, which is more than double the number for planes.

Interesting: Automotive travel plays a higher role for Europeans compared to North Americans in 2020 (88% intended use vs. 64% respectively). Possible explanations for this trend are the shorter distances between cities in Europe, as well as the popularity of cross-border European holidays.

Automotive travel will be an interesting statistic to watch. After 9/11 (which also saw a cratering of demand for air travel), vehicular accidents skyrocketed.

One thing appears certain, however: the transportation industry will be affected. 60% of our poll participants listed it as the primary expense incurred during travel.

Intended Travel Destinations Have Changed Drastically

Long-distance trips (meaning cross-country or abroad) made up the bulk of our respondents’ travel last year.

This will likely change in 2020 as people overwhelmingly favor vacations closer to home. Feelings about international travel have soured among 54% of those polled.

“During this pandemic there should be no long distance travelling allowed unless for emergency reasons!”

One respondent’s opinion on international travel.

Interesting: in our poll, younger people (18-35 years old) are more inclined to travel abroad in 2020 compared to older generations (35+ years). This is probably linked to the increased fatality rate from the novel coronavirus for older citizens and the fear of a medical emergency abroad. Also, North Americans are twice as likely to abandon international travel for 2020 compared to Europeans (72% vs. 37% respectively).

This has the potential to devastate some economies. In the Maldives, for example, international tourism accounts for 39% of GDP. Similar, 33% of the the British Virgin Islands‘ GDP stems from tourism. Taxes from that sector go towards infrastructure projects, public services, and welfare.

Real estate may also see a major decline. In some cities over the past few years, landlords flocked to Airbnb as a means of boosting revenue. This had the effect of pricing out locals looking to buy property. Now that travel plans have been thrown into disarray, will these properties flood the market?

The impacts of a focus on local travels may be less pronounced in some cities (like Las Vegas) that receive a good chunk of their tourism revenue from domestic travel.

Hardest-Hit Countries Are the Least Popular Among Travelers

While COVID-19 is a global pandemic, a few countries have been hit harder than others.

China, Italy, and Iran suffered the most among our poll respondents. Those nations saw negative perceptions among 77%, 78%, and 85% of the group, respectively.

“Some countries didn’t take it serious enough from the start which makes me very sure that I want to avoid these countries as much as possible the following months/year.”

One respondent critizing the intital COVID-19 response.

The United States (which currently leads in the number of cases) polled negatively among 69%. The nation’s response has been widely criticized as slow and ineffective, which may be contributing to these numbers.

America has also suspended travel from much of the world, including Europe and neighboring Canada. The large percentage of foreigners in our poll could not visit the U.S. even if they wanted to until restrictions are lifted.

Negative Emotions About Travel Are Very Prevalent

As part of our poll, we also asked participants to share their emotions concerning travel.

Only 12% reported feeling the same about travel in 2020 as they did in 2019.

The most common responses, meanwhile, were rather pessimistic/negative feelings like:

• Uneasy (41%)
• Nervous (37%)
• Don’t want to travel (31%)
• Sad (28%)
• Scared (27%)

“Travel will not even be allowed this year, there will be no accommodation open, no restaurants or bars open, no tourist sites open, no point even trying to go.”

“A second wave of Covid-19 infections is on the horizon. This may undermine commercial travel for the rest of 2020.”

Respondents’ pessimistic outlook on travel in 2020.

Besides the fear of infection, a prominent reason for the prevailing negativity are trip cancelations:

“I had three trips planned for this year and they’re canceled by now which makes me sad, but I won’t travel until there’s a vaccine or something.”

“Had to cancel a family vacation to Spain. We had been looking forward to [it] for months.”

Respondents feeling sad about travel in 2020.

Despite the current negative feelings, one important question these results raise is how tourism will be affected after the initial threat of COVID-19 has subsided.

Will people jump right back into business as usual or will the negativity linger?

The comments submitted to our survey indicate that people predict their outlook on travel as being very positive once COVID-19 has passed:

“I will travel a lot once we are able to again!”

“After COVID-19 has calmed down, I would have no issue traveling.”

“I had my annual (domestic) vacation booked for this very week! I have since postponed to July, and I am hoping things improve by then.”

“I had a very large travel year planed. 6 trips. 4 canceled. I’m dead set on the last 2 regardless of the plague.”

Respondents expressing their optimism and willingness to travel in 2020.

Whether these views hold true will likely depend on how much longer restrictions last.

The segments that declared the highest degree of impatience for traveling in 2020 were frequent travelers (23%), Europeans (22%) and millennials (18%, twice as impatient as older generations).

General Approval of Imposed Travel Restrictions

While feelings about travel in 2020 are largely negative, our survey indicates widespread approval of the government’s measures to limit COVID-19’s spread.

More than 40% of participants fully agree with the lockdown while 35% somewhat agree. Only 7% disagree.

One respondent’s comment mirrored the general consensus quite accurately:

“For me, COVID-19 just takes priority, safety first. Travel is a luxury.”

This would have been hard to predict mere weeks ago, prior to restrictions being implemented. In February, experts spoke out against the idea of travel bans, stating that they would be ineffective.

As the situation with COVID-19 has progressed, however, tight borders have become key tools in limiting the spread and people seem to be very accepting of that.

“Non-essential travel should be banned for the time being, and the definition of “essential” should be extremely narrow.”

“Basically restrictions should be implemented more strictly while the virus continues, so that way it can end sooner.”

“I agree with the travel restrictions being imposed in relation to COVID19.”

“Travel restrictions need to be stricter.”

Respondents agree to the imposed travel restrictions.

This is especially true for Europeans whose countries are amongst the hardest-hit globally. 88% of them voted in favor of the travel restrictions, while only 70% of North Americans agree with the imposed measures.

However, as a global economic recession looms, it is not a surprise that business travelers tend to disagree the most with the restrictions (17% vs. 7% respectively for the overall population).

“End the lockdowns, in 2, 3, 4 or 10 weeks they won’t be able to guarantee safety so people will be taking risks anyway. All lockdowns are doing is destroying the economy.”

One respondent criticizing the shutdown.

Further surveys will prove whether these perceptions shift drastically. Death predictions have already plummeted due to social distancing, which has had the ironic effect of raising skepticism among some concerning the disease’s severity.

Conclusion

COVID-19’s impact on the travel industry has been substantial, to say the least. Airlines, just weeks ago the benefactors of an increasingly interconnected and wealthy economy, now face immense losses.

Our goal with this survey was to contextualize this data by uncovering the attitudes among consumers towards tourism in 2020.

While much of what we found confirms the existence of a logical skepticism towards travel, there were some interesting points.

For one, people appear to be much more open about traveling near their hometown than going abroad or even cross-country. This stands in contrast to the preference people had towards traveling longer distances in 2019.

Further, while much noise has been made in certain countries (particularly the United States) about shutdowns, participants in our survey overwhelmingly expressed approval.

Lastly, while feelings about travel in 2020 are understandably negative, they lean towards uncertainty rather than outright anger.

These results (and others we’ve mentioned) raise a number of important points worth watching for the future.

As the COVID-19 situation evolves, it will be interesting to see if these attitudes shift and what the ultimate consequences are.

Survey Methodology

Date

We sent our poll out via email and social media in the last week of March 2020.

Who We Polled

Of the 662 respondents, 56% were female, 43% were male and 1% declined to specify.

As far as age goes, the biggest chunk of respondents was in the 18-24 range, followed by those between 25-34 years of age.

In terms of nationality, the breakdown was as follows:

• North America: 48%
• Europe: 41%
• Asia: 7%
• Australia: 2%
• Africa: 1%
• South America: 1%

How We Polled

The poll consisted of several multiple-choice and multiple-response questions designed to gauge how travelers have adjusted their plans and mindsets in the wake of COVID-19.

Participants were also able to submit a general comment in order to expand on their feelings. We’ve include a few of those comments to contextualize the data further.