General Impacts of COVID-19 on the Leisure and Tourism Industries

There is no doubt that the global impact on the tourism and leisure industries have been greatly altered or impacted by the COVID-19 virus. According to McKinsey & Company, 10 percent of global GDP was attributable to the tourism industry in 2019 and was worth almost $9 trillion.

McKinsey reports that COVID-19 has caused an unprecedented crisis for the tourism industry. International tourist arrivals are projected to plunge by 60 to 80 percent in 2020, and tourism spending is not likely to return to pre-crisis levels until 2024. This puts as many as 120 million jobs at risk.

It is always difficult to fully quantify all activity in the tourism and leisure sectors because not all leisure activity is countable as “tourism” activity. In spite of all of downward pressure, statistics from the U.S. Department of Labor still show a rosy outlook for many of the industries that come under the tourism and leisure umbrella. For example, meeting and events planners are predicted to have a growth rate of 8% from 2019 to 2029 which is double the average rate for job growth in all fields. Other sub-sectors also show growth on the Department of Labor site, but as always so many jobs in the leisure and tourism industry are not tracked or adequately tracked.

The following are general impacts of COVID-19 on the industry and some examples of these impacts:

Hesitation of the public to engage in activities due to the perceived risks of catching the virus. Sometimes these risks are perceived to be much greater than they are in reality. This goes along with a less than adequate amount of research on how the virus is actually transmitted. The fear of air travel appears, for example, to be largely unfounded. The CDC’s web site states: ”Most viruses and other germs do not spread easily on flights because of how air circulates and is filtered on airplanes. However, social distancing is difficult on crowded flights, and sitting within 6 feet of others, sometimes for hours, may increase your risk of getting COVID-19.” Reuters reports that studies have confirmed that there is virtually no chance that you will contract COVID-19 on an airplane if you are properly masked.

Conflicting information: For example, The World Health Organization (WHO) states that we should not wear masks while exercising. Yes, this is probably shocking to some readers, however, it is stated as follows on the WHO site. People should NOT wear masks when exercising, as masks may reduce the ability to breathe comfortably. Sweat can make the mask become wet more quickly which makes it difficult to breathe and promotes the growth of microorganisms. The important preventive measure during exercise is to maintain physical distance of at least one meter from others.

Another excellent example of the misleading information is the general feeling that airline travel is unsafe (as mentioned above), where perhaps it is the safest environment you can currently be in. One study illustrates that you have less than a one in a million chance of contracting COVID-19 on a plane. Given this it is clear that many restrictions and fears are basically untrue or misconceptions placed on us mostly by politically motivated statements. This has been most unfortunate for the tourism and leisure related industries and hopefully will not be repeated in future such situations.

Uneven Application of Rules: The uneven application of rules has indeed driven industry people crazy. This has been caused in part by the politicization of COVID-19, but also is simply inherent in each State, Region, and or Country setting their own guidelines.

Severe changes in the competitive environment have occurred. When all is done with COVID-19 it appears that it will have continual impacts on the competitive environment for many entities in the tourism and leisure industries.

Some of these include: The substitution of home based activities for those that were previously done out of the household and the addition of more home based activities to make the new “COVID-19 life” more pleasant. For example, Netflix saw a global increase of ten million subscribers after the COVID-19 lockdowns began after seeing a more lackluster period of subscriber growth. At the same time on the brighter side some attractions such as theme parks, haunted hayrides and houses, historical attractions, national parks, etc. are not as privy to home based competition. Even during COVID-19 they have done well when allowed to be open. Many of these attractions have shown their muster during COVID-19 by modifying their operations. There are many examples of these modifications. One of these was the adaptation of operating hours along the lines that this author mentioned in the June 2020 issue of Park World where they divided the operating days into separate admission segments each with different themes or services such as featuring only roller coaster operations and craft beer. The Headless Horseman Hayrides and Haunted Houses, noted as the nations #1 Halloween attraction, substituted attendees driving their cars through the former hayride path to meet social distancing requirements. With various other cost cutting measures this enabled the attraction to operate during the COVID-19 2020 Halloween Season.

Major shifts in tourism markets are occurring. Lake George, New York, based on three visits by the authors in August, September, and October 2020 indicated that the largely “outdoor oriented” tourism destination has succeeded amazingly well during the summer of COVID-19. Boat rentals, for example, caused people to go to boat rentals and beg for boats even though the average three day rental was over $1,000. The local area cancelled several special events, and even though they were still cancelled people showed up in droves for them and basically put them on themselves.

The American Dream Entertainment Complex originally scheduled to be 45% retail space and 55% entertainment space announced that it would now be 75% entertainment. Given the retrenchment of brick and mortar retailing which was accelerated by the COVID crisis this comes as no surprise and possibly provides a sigh of relief for the seven predominately shopping malls in northern New Jersey. Recently the American Dream lost several major retail tenants including Lord & Taylor and Century 21 department stores due to bankruptcy of these companies and decisions to go out of business. This development may be a real blessing for the illfated complex because at the same time New York City has lost a lot of its glow as a tourism destination. With crime increasing, restaurants closing, and the theatres still shut down, the door is wide open for the American Dream to become a major place for New York/New Jersey Metro area tourists to go for some safe family fun. It is further recommended that the “Dream” develop convention space in the vacated department store areas which when coupled with a reopening of the former “Izod” arena would provide an amazing home run economic development for Northernm New Jersey. Such development would also ensure the success of the now predominately entertainment complex.

The restaurant business has been changed drastically by COVID-19. It is a known fact that large numbers of brick and mortar restaurants have had to close their doors. They will be permanently affected by the proliferation of delivery services of all types. It is also apparent that chain restaurants will benefit greatly from COVID-19. As many mom and pop restaurants go out of business the chain restaurants will benefit greatly when all is back to normal. In the long run, however, we will probably see many of these businesses come back. But of course there will be many failures of upstarts as they scramble to get market share.

These are just some of the impacts of the COVID-19 situation on the Leisure and Tourism industries. Additional ones will be included in the full article written by Dr. Samuels and Dr. Yawei Wang in a forthcoming issue of “Visions in Leisure and Business,” an academic on-line journal. For additional information please contact Dr. Samuels at samuelsj@mail.montclair.edu.