By Babajide Okeowo
Following the announcements that efficient vaccines for COVID 19 could be on the horizon, there are renewed hopes that a recovery for the Tourism sector which has been badly affected by the pandemic may come sooner than expected.
Some officials and stakeholders in the sector argued that with a vaccine allowing for greater movement and trade, it will lead to a quicker-than-expected rebound in tourism activity.
They cite the example of China as an example of a rapid recovery, they posited that since the country managed to control infection rates, air traffic has returned to 90% of pre-pandemic levels.
According to Aileen Clemente, the chairman, and president of Philippine firm Rajah Travel Corporation, while a vaccine will be key to any resumption in mass tourism other measures will also be crucial to recovery.
“I believe that the main priority of the tourism industry is to get people traveling again safely by giving governments confidence that systematic Covid-19 testing and contact tracing are possible and reliable prior to having a vaccine program.
As we all know, the vaccine program will take a while to roll out to all parts of the world, so pre- and post-vaccine programs should be concurrently available” she told OBG.
However, there is a call for cautious optimism.
Demonstrating the extent of the impact on global travel flows, the Organisation for Economic Cooperation and Development, OECD has predicted that the international tourism economy will shrink by 80% this year.
This contraction has had a significant impact on those emerging markets that draw a sizeable portion of their GDP from tourism. For example, last year tourism accounted for 11% of GDP in Thailand, 9% in the Philippines, 8% in Morocco, and 7% in Tunisia.
Global consultancy firm, McKinsey estimated that global tourism revenue will not return to 2019 levels until either 2023 or 2024.
“At present, it is expected to take a number of years before tourism completely recovers: consultancy McKinsey estimates that global tourism revenue will not return to 2019 levels until either 2023 or 2024” the company posited.
Similarly, Thurane Aung, CEO of Myanmar conglomerate Dagon International in an interview with OBG posited that there will still be a cautious approach to leisure travel.
“Even with the release of a vaccine, in the short to medium term, people will be very cautious about leisure travel. Also, due to the reduction in disposable income, we do not expect tourism to pick up as fast as business travel” he said.
Another factor that could complicate any recovery is the potential difficulty associated with safely transporting vaccines.
To work effectively, Pfizer and BioNTech’s vaccines must be stored at an ultra-low temperature of around -80°C. Moderna’s can be kept in a normal freezer, while researchers from the University of Oxford say that their vaccine can be stored in a refrigerator.
Although cold storage requirements pose particular challenges in less developed countries, such factors could offer also opportunities for logistics companies.
For example, Kuwaiti logistics firm Agility Public Warehousing is in discussions with governments and vaccine producers to help distribute doses once they become available. The company, which has a logistics network covering 120 countries, says it has significant cold storage capability in many emerging markets.
Recall that on November 9 US pharmaceutical giant Pfizer and German biotechnology company BioNTech announced that a jointly developed vaccine candidate was effective at preventing more than 90% of test subjects from contracting Covid-19, according to results from the third stage of testing. Two weeks later, additional testing suggested that the efficacy rate was in fact better than initially expected, at 95%.
The companies said they were hopeful of securing authorization to sell and distribute the vaccine – initially in the US – before the end of the month. They projected that they could produce up to 50m doses of the vaccine before the end of the year and an additional 1.3bn in 2021.
This was followed on November 16 by the news that US biotechnology company Moderna had also produced a vaccine candidate with 95% efficacy. Meanwhile, testing for another vaccine developed in the UK by the University of Oxford, in collaboration with British-Swedish pharmaceutical firm AstraZeneca, showed an effectiveness of 70% – which could be increased as high as 90% by tweaking the dose.
This positive news has raised hopes of a quick recovery from both the health-related challenges and the economic impacts of the pandemic.
In particular, an effective vaccine is expected to be a significant boon for tourism, which has been badly affected by border closures, travel restrictions, and social distancing measures related to COVID 19.