Has the region’s tourism sector already overcome the pandemic’s impact?

 Olga Gomez Garcia

Olga Gomez Garcia

With the onset of the pandemic, the world stopped. A previously unknown threat made us drastically change our way of living. This is the first entry in a series of blogposts about the structural changes that the pandemic brought to the tourism sector in the Caribbean.

Countries where the sector represented 30%, 40%, 50%, or even more of their GDP saw their tourist activity almost entirely disappear. Many of these countries did not have social protection networks, adding, in these cases, the human pain of the pandemic to a very complicated reality, extremely challenging to face on a personal and state level.

The income statements of many tourism businesses came to present negative income entries due to sales that were never thought to be cancelable, but that the state of emergency made them appear as liabilities without having any provision.

On top of this, half-built multimillion-dollar investments were stopped, debts to be satisfied based in cash flows that suddenly became unpayable, with almost no possibility of adjustment.

In May 2020, experts realized that the recovery would not be immediate. It was estimated that it would take, on average, three years.That is today: 2023.

Therefore, the International Tourism Day is worth analyzing how accurate these projections were and trying to extract the lessons learned that this terrible crisis has left us at a sectoral level.

The pace of recovery has been very uneven between regions and countries.

The World Tourism Organization (UNWTO) recently announced that we were approaching full recovery. Between January and July 2023, international arrivals reached 84% compared to the pre-pandemic level. The Middle East leads the recovery, having notably surpassed 2019 levels (120%), followed by Africa (92%) and Europe (91%). The Americas stands at 87%, and Asia and the Pacific Region at 61%.

As the IDB anticipated, this critical advancement toward 2019 numbers has occurred irregularly (UNWTO, 2023). At first, the recovery path was marked by the evolution of the primary critical indicators related to the prevalence and impact of the disease. Year-on-year growth in 2021 was just 12.7%, very timid considering the incredible decline of the previous year. However, in 2022, the number of international tourism arrivals increased considerably, more than doubling (+111.5%). In the first seven months of the year, the growth of this same indicator was 43%. Read more…

 Olga Gomez Garcia

Olga Gomez Garcia

Olga Gomez Garcia is a development economist specializing in the travel and tourism sector. She currently works as an Operations Lead Specialist for the Tourism Sector at the Inter-American Development Bank. Olga is the tourism focal point for several Central American and Caribbean countries. She coordinates the tourism sector policy dialogue and leads the sustainable tourism development policy, investment, and research projects for the countries assigned. Olga has a Master in Business Administration specializing in the tourism sector from Cornell University (Ithaca, USA) and ESSEC Business School (Paris, France) and a Bachelor’s Degree in Business Administration and Management from Carlos III University (Madrid, Spain).

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