Will Tourism Take Off Again in 2021?

by -
Will the vaccine save tourism in 2021?

With lockdowns, travel restriction, closed bars and restaurants, tourism professionals have experienced a catastrophic decline in demand for their services.

As many countries launch vaccination campaigns, hope appears to have returned!

Will traveling fever hit the planet in 2021? According to several studies, tourism should experience a new boom in the second quarter.

Tourism, collateral damage to a pandemic

In 2020, global tourism showed a dizzying drop of 70%, “or more than eight times the loss recorded after the global financial crisis of 2009”, reported the World Tourism Organization.

According to French magazine Geo, the sector contributes 10% of global GDP and employs more than 313 million people. In 2019, there were nearly 1.5 billion leisure and holiday trips.  

The fall of the sector represents a loss of 730 billion dollars for the world tourism sector.

Read on Alvexo: “British Pound is Facing a Historical Plunge”

America is stumbling, Europe is stabilizing

In the United States, exceptional government assistance of $15 billion could soon allow more than 32,000 employees to return to work, on top of a $900 billion stimulus deal. 

United Airlines stock price fell earlier this week after news of the death of a passenger on a domestic flight caused by COVID-19, the New York Times reported. The stock was trading at $42, a staggering 50% drop from the end of 2019 when it was valued at $85.

In France, some companies will receive aid, as the government has announced. The French state, which already owns 14% of Air France’s capital, will double its share in the company by injecting an additional 4 to 5 billion euros next spring, reports RTL.

The Netherlands has announced aid of 3.4 billion euros to KLM. Air France’s share rose to 5.3 euros at the end of November. 

The vaccine, the industry’s getaway?

The arrival of a vaccine could well rebound the economy. Since mid-December, several countries have started their vaccination campaigns: United Kingdom, France, United States or Switzerland…

The vaccine, backed by the entire medical profession, including Dr. Fauci at the White House, who particularly encouraged the use of the Moderna vaccine, developed by the National Institute of Allergies and Infectious Diseases.

According to a poll published by Tom Travel, 55% of confined residents plan to travel for at least two weeks in 2021.

Bank J.P. Morgan has already advised its shareholders to buy shares in Royal Caribbean and Carnival, confident that travel will resume in the first quarter of the year.

The above content is considered to be market commentary information and shall not be perceived as independent investment research or investment advice.

Note: The opinions expressed in this article are the author's own and do not necessarily reflect the view of Alvexo on the matter.