A United Airlines Boeing 737 plane is seen at the gate at Washington's Dulles International Airport in Dulles, Virginia.
Daniel Slim/AFP via Getty ImagesRemember jetting off for long weekends in Paris, London, New York? Anywhere? Hold tight to those memories, because even with Covid-19 vaccines, it could take years for travel to return to its prepandemic glory.
That is according to new research by a team of analysts at Barclays, who see lingering damage ahead, especially for countries that rely on tourism to keep their economies going, and those with industries that require international mobility, such as emerging markets.
“Global mobility will be less spontaneous and more expensive and bureaucratic, impacting both business and leisure travel,” said debt research analysts Rahul Bajoria, Angela Hsieh, Brian Tan and Shreya Sodhani, in a report published on Tuesday.
With hopes for a fast reboot of international travel “repeatedly dashed,” the analysts warned of a “period of persistent pandemic, marked by semi-permanent restrictions such as testing requirements and passports.” The European Union, for example, is in the process of relaxing measures for nonmember visitors, but individual countries may still be able to set their own requirements and quarantine arrangements.
“Global mobility directly powered about 10% of global GDP [gross domestic product] before the pandemic. The damage will not be confined to 2020, but will linger,” said the analysts, citing data from the International Civil Aviation Organization that predict prepandemic air travel won’t likely return until 2026.
One result is a shrinking global tourism market, they said.
The World Tourism Organization estimated that for 2020, reduced global mobility triggered a $1.3 trillion loss for tourism and linked industries, nearly 11 times that of the 2008-09 financial crisis. A permanent loss in global mobility will hit other sectors such as financial services, consulting and higher education, where staff need to be able to freely travel.
Web-based connectivity has allowed businesses to carry on, but the loss of air travel, hotels and other related industries “creates risk of scarring,” said Barclays. The analysts worry that the current pandemic may fester longer than past pandemics, and the advantage of vaccines has given way to supply differences between developed and developing nations, and divergences in economies.
Meanwhile, domestic mobility has improved in bigger economies, but remains uneven. In Europe, the largest airports are still reporting 63% lower departure traffic compared with January 2020. That traffic is respectively just 4% lower in China and 18% lower in the U.S.
Another issue the analysts said to consider is that even if Covid-19 vaccine passports are adopted widely across the globe, consensus over which vaccine meets travel criteria may be challenging. For example, China recently announced that visa requirements for foreigners would be simpler if they took Chinese vaccines, which haven’t been fully recognized in many countries.
That opens the worry that travelers may need to take multiple types of Covid-19 vaccines to satisfy travel requirements. It could be a costly endeavor for an average tourist, as governments may not want to keep providing free vaccines once herd immunity has been reached, said Barclays.
Most at risk from continued restrictions is the lucrative business travel sector, with companies expected to remain cautious in restarting the need to fly for work, said the Barclays analysts. “Corporate travelers are disproportionately important for the aviation industry,” the analysts said, noting that that sector makes up just 12% of all passengers, but accounts for nearly 75% of airline profits in some cases.
May 26, 2021 at 12:19AM
https://www.barrons.com/articles/not-so-fast-barclays-has-some-hard-truths-about-postpandemic-travel-51621954051
Barclays Has Some Hard Truths About Postpandemic Travel - Barron's
https://news.google.com/search?q=hard&hl=en-US&gl=US&ceid=US:en
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