The challenges of the tourism industry facing the enigmas of a new era


the-challenges-of-the-tourism-industry-facing-the-enigmas-of-a-new-era
As a preview of our new issue 102-103 of the journal Temas, Catalejo published this article dedicated to the challenges that the global COVID-19 pandemic represents for tourism to Cuba.

*Researcher. Chair of Caribbean Studies «Norman Girvan», University of Havana.

 

The surprising expansion of tourism beginning in the second half of the twentieth century all over the planet led many countries to inaugurate, reinforce and adjust their development policies in accordance with the changes in the tourism economy and market standards, in order to take advantage of this wave. Reality has been hasty to demonstrate that tourism alone does not develop any country.

Under those scenarios, the industry has been promoted as the principal strategy to achieve and consolidate the development of many nations, assuming it to be an important source of wealth and an activity that energizes regional and local economies. Even if there is important evidence that supports this argument, it is also true that it is very common to hide, ignore or omit the great costs of tourism development, in pursuit of objectives considered priorities, such as hard currency revenues and economic growth. In this sense, tourism promotion and management has been characterized by a reductionist perspective, that only sees the economic angle and not as a complex and fragmentary industry that is inserted in the social, environmental, cultural and economic conditions of a particular context.

There is also sufficient evidence of the undesirable and uncontrolled effects of tourism and the market, principally related to poverty, marginality, environmental damage, loss of heritage, decadence of health and productive systems; when the main goal has been to multiply the number of international tourists, large investments and market values above everything else.

Many tourism projects based on sustainable development models or ecotourism have repeated designs of accelerated growth and generate the same environmental problems, which triggers the suspicion that such models have not led to substantial changes that benefit local societies and their environment, but are based instead on the rhetoric of the hegemonic discourse of the large transnational corporations (Perelló, 2020a).

The current global scenario reflects the growing decline of the neoliberal capitalist model and reminds us of the crisis of the XIV century that marked the transition from feudalism to capitalism, characterized by climate change, the arrival of the black plague epidemic - which was responsible for somewhere between thirty and forty million victims -, economic instability and great social, political and ideological upheavals. (2020c).

«History never says goodbye. History tell us: see you later », sentenced the Uruguayan writer Eduardo Galeano.

In these new times of change of era, it has been demonstrated that it is naïve to think that the great challenges can be met with vague references to sustainable development. Every transitional period brings about enormous problems, uncertainties, doubts; it becomes difficult to understand changes in values, references; and the need to assume new paradigms. The future will be the result of the seed that we plant today, and we have to ask ourselves what seed are we planting, and what harvest do we expect, what quality of humanity and world. If the traditional model of the hegemonic market is imposed as the paradigm and there is no improvement in understanding and cooperation in international relations, there will be no positive future for the majority of the peoples of the world.

Tourism before a new reality

Beginning in early 2020, the travel and tourism industries have experienced negative circumstances, unprecedented in the last hundred years, surpassing by far the Great Depression, the Second World War, the consequences of the 9-11, 2001 terrorist attacks in New York, the SARS pandemic in 2003, the H1N1 virus and the global economic recession of 2009 (UNWTO, 2020b). The crisis caused by the current pandemic implies confronting a very long recovery. The consumers of travel and tourism will need a long time before they recover their habits under unusual conditions, which are still uncertain. In this regard, many airlines consider that it will not be until 2025 or 2026 that the demand for travel will recover to 2019 levels (IATA, 2020).

The changes required to meet this new reality will be historic in size, speed and scope. The transformations will be not only of a particular type of emerging technologies, but rather a transition toward new systems and processes erected on the basis of digital infrastructures; the introduction of contact-less technology for the travel processes, and means of prevention and detection of infections. These transformations will alter swiftly and permanently the way that we travel, communicate, produce, consume and interact.

The current pandemic represents a before and after, because the crisis is exceptional and leaves behind many and varied questions in a bleak scenario. How will it affect the survival of firms and jobs? How long will it take for the economy to recover? What will be required in order to reactivate tourism demand? How will this pandemic modify travel behavior? What aftermath will it leave in business relations? Will the world be the same?

It is estimated that the recovery of travel and tourism will be gradual: first the domestic market, then the regional and finally medium and long-distance international travel, since it will take a long time to salvage consumer trust.

The World Bank in its Global Economic Prospects Report (2020), informed on the economic projections for the next few months. According to these prognoses, the global economy will retract by 5.2%, which means facing the deepest recession since the Second World War. In Latin America and the Caribbean, regional gross domestic product (GDP) is expected to fall 7.2%, more that the world average. For Cuba the announced decline is 11% (VV. AA, 2020).

With respect to travel and tourism, air transportation has been the principal motor that has driven the constant growth of the sector at a global level. But in the current scenario the delay in its recovery could become a very negative factor for reactivating international tourism. The outbreak of the pandemic has shown that the aircraft is the key factor in the propagation of the infection across the world. The airlines and the large airports, with their enormous flow of passengers, created preferential routes for the virus to spread and became dynamic nuclei of contagion given the concentration of persons and the long waiting periods. The countries that have important air terminals, global interconnection hubs, became epicenters of the global transmission of the pandemic (Perelló, 2020a).

For travelers, mandatory actions have been imposed, such as social distancing, the use of facemasks, the introduction of contact-less technologies in the travel process, body temperature checks before and after flights, as well as the correct functioning of air filters inside the aircraft (High Efficiency Particulate Air (HEPA) filters) and new technologies that are being developed for the aeronautical industry that will contribute to recovery of the climate of trust.

La International Air Transport Association (IATA) estimates that it will not be until 2024 that the level of air traffic will recover to 2019 levels. In 2021, it could be between 32% and 41% below expectations before the outbreak of the pandemic. The loss of passenger volume will persist into the future. The level of traffic in 2025 is estimated to be 10% below the predictions before COVID-19 (UNWTO, 2020b).

AT the same time, the World Committee on the Tourism Crisis of the World Tourism Organization (UNWTO), in its sixth meeting held last October, announced plans for a new International Code for the Protection of Tourists. It is expected to become the first legal framework to protect their rights as consumers, harmonizing the minimum standards across the different countries. The UNWTO (2020a) claims that to achieve immunization it is necessary to vaccinate 70% of the world’s population, which amounts to 5.5 billion persons, and demands a huge effort of the pharmaceutical industry and the logistics chains of the various countries; it will require time for effectiveness and guarantees (WTTC, 2020a). The surveys taken by the different industry organizations reveal that more than half of the travelers of the world (53%) do not feel encouraged with the idea of traveling; so, it could be quite a while before we move around with the same confidence as before.

A recent study by the World Travel & Tourism Council (WTTC, 2020b) revealed that 80% of travelers surveyed fear the travel lockdowns and the possibility of viral infection during their visit, 45% are ready to carry a digital passport, and 58% give the highest priority to respectful, safe and environmentally protective tourism.

The new threats are also related to the disruptions that will affect the labor market, the future of sources of employment, income inequalities, geopolitical security and the perception of risk, even the system of social values and ethical framework.

With respect to employment, data provided by the International Labor Organization (UNILO) for the lodging and food services sector demonstrate that tourism has been a basic industry for the creation of jobs in the last decade, especially after the 2010 economic crisis. While global employment in all sectors grew at an average of 11% between 2010 and 2018, the accommodation and food services sector increased 35%. The role of this industry is especially notable in Europe, where an annual growth of 21% contrasts with the 6% employment growth in all the other sectors. It is even more important for women, which represent globally 53% of those employed in hotel and lodging, versus 39% in the other industries (UNWTO, 2020a).

Tourism in the Caribbean Islands

The Caribbean countries as a whole have registered low economic growth in the last decade, with an average annual GDP increase of 1.4%.

The decline in their growth can be explained by the fall in foreign and domestic demand and the deterioration of the terms of trade that the global crisis of 2009 generated, the slowing down of tourism and the impact of extreme natural phenomena that occurred in the last few years (Maingot, 2019).

Add to this scenario the COVID-19 beginning in early 2020, with unprecedented global consequences.

Early on, the estimate of reduction in tourism due to the pandemic was between 60% and 70% between April and December 2020, and a loss of more than a million jobs. According to data provided by UNWTO, in Latin America and the Caribbean the loss has been of 4.7 million jobs related to tourism, and more that 100 million worldwide. At the end of 2020, ILO confirmed that millions of jobs were lost and this figure does not include informal employment in tourism activities.

For decades, with few exceptions, the small Caribbean islands have based their economies on their natural advantages of sun, sand, sea, hospitable people and, above all, their relative proximity and connectivity to the principal markets of travel and tourism: Europe, the United States and Canada. These countries have exhibited, in general, the highest rates of infection and fatalities due to COVID-19 and will be subject to post-pandemic factors that will determine the long road toward the recovery of tourism, in the context of a new reality.

The Caribbean subregion is the most dependent on tourism in the world, and it is this activity that contributes the most to their economic growth and job creation (Table 1).

At the same time, their dependence on imports of food is a continuing and permanent reality. Meanwhile, their economic base is, to a great degree, dependent on a tourism that does not guarantee predictable, balanced development. For example, island countries that do not produce any wheat consume proportionally the greatest amount, relative to other countries in the hemisphere, half of it for American-style bread and other products demanded by the tourism industry. In addition, the dependence tends to be greater for those least healthy products, demanded by mass tourism, especially from the United States and Canada.

The small economies with the greatest dependence on tourism exhibit low performance since the international financial crisis, the risk factor and the effects of natural disasters. In the medium and long terms, the limits of physical space could impose new restrictions on the development of tourism in some small Caribbean island states, to the degree that tourism operations and carrying capacity approach maximum potential thresholds.

On the other hand, climate change disturbs the environment and the natural ecosystems, favoring ideal conditions for the emergence and propagation of epidemics, especially those transmitted by viruses. vectors and persons (Perelló, 2020b). It is necessary to take into account that the environment is the set of physical, chemical, biological, social, economic and cultural components capable of causing direct and indirect effects, not only in the space where life takes place, but also on living beings, objects, water, soil, air, and the relations between them, as well as on intangible elements such as culture.

Before the arrival of the pandemic, the sub-region was already experiencing a low rate of growth and questioning the economic and social models applied, given that, despite a slight reduction in poverty indices, the levels of inequality and social vulnerability remain high.

In this context, the COVID-19 pandemic bursts into a weakened and highly indebted region, which has profound implications for its future social and economic development.

At the same time, the health crisis produced by the illness will change the priority of the health sector in the realm of public policies and will induce a permanent increase in public health budgets. It is predicted that disruptive climate and epidemic events will become more frequent. (Perelló, 2020b)

The current scenario suggests that the recovery of international tourism (post-COVID), for the Caribbean as a whole will depend essentially on five factors:

• the intensity of the economic crisis and unemployment in the principal emitting countries;

• the reactivation of international trade and chains of supply, necessary to guarantee the resources for tourism;

• renewal of the climate of trust among consumers when faced with a fragmented reality and generalized fear of the pandemic in order to travel to medium and long-distance destinations;

• recuperation of the aeronautical industry, airlines and hubs of global interconnection, which will continue to be the principal engines of tourism growth in the Caribbean; and

• adaptation to climate change and mitigation of environmental damages and weather-related disasters.

A difficult scenario for tourism in Cuba

The largest of the Antilles islands recognizes that international tourism is a strategic industry for economic growth and a driving force for other sectors. Nevertheless, the index of tourism dependency of Cuba is much lower (12.6) compared to the rest of the insular Caribbean, because of its larger territory, greater diversification and variety of exports.

Tourist arrivals, which have exhibited moderate growth in the previous few years, fell 9.3% in 2019 compared to 2018.

When the US government imposed new restrictions on travel, prohibited its airlines from landing in Cuban airports with the exception of Havana, and suspended cruises to Cuba, the moderate advances achieved were wiped out.

After the first ten weeks of 2020, right in the middle of the high season, the country had received 894,125 foreign visitors, which represented a 33.2% decrease [compared to the same period in 2019], while the Caribbean sub-region decreased 26.1% in the same period (Minister of Tourism, 2019-2020). Flights were suspended starting in April with the closing of airports and seaports as a result of the pandemic. The Cuban tourism industry faced a hitherto unknown crisis, both in depth and in reach. At that moment, the country’s hotel infrastructure boasted 75,771 rooms, distributed among 394 [state-owned] hotels that employed 67,390 workers. In addition, some 23,240 rooms and over a thousand restaurants («paladares») were available in the private sector, which represented more than 50,000 additional persons dependent on international tourism.

The gradual opening of the tourist destinations and hotel installations, initially to domestic tourism and then to international tourism in the high season, will benefit from an extensive renovation of the hotels aimed at the integral security and health of the vacationers, according to the newly established regulations and protocols. In response to the new requirements, they will all have medical clinics staffed by Cuban health professionals, with permanent presence at the service of the tourists, which will include the capacity to carry out PCR tests in real time and make available the rest of the products of the Cuban biopharmaceutical industry used to treat the coronavirus and other illnesses. This will make Cuba a healthy, secure and hospitable destination for tourism, that respects the environment and preserves its ecosystems.

When the year 2020 ended, the figure for «arrival of international tourists» accumulated 1,085,000 visitors, 25.4% less compared to the previous year, which had already declined 9.3%. The impact of the pandemic, intensified by the restrictive measures imposed by the Trump administration against Cuba, caused the country’s tourism performance to backtrack to 1996, when it reached its first million international visitors (Sierra, 2020).

Faced with the reality of a new era, it will be necessary to accept that many of the premises that have served as paradigms during all these years, are now being questioned and restated for the new times, in order to meet the great challenges now and in the future. The changes do not occur after time passes, rather, while time passes.

Final Comments

In the medium-term post-pandemic scenario, Cuba must reestablish, under new structures, the promotion and commercialization of the traditional sun-and-beach product to the established markets of Canada and Europe, in synergy with health, security and wellness tourism. At the same time, it must encourage visits of Cuban residents abroad, which represents one of the main segments of the tourism market.

In all cases it is important to achieve a notable differentiation of the various tourism products, with higher standards of quality, more productive linkages and economies of scale beginning at the local level, and prioritizing import substitution.

In the forefront, a new productive sector has emerged, one which links tradition, modernity and ingenuity: the creative economy, which encompasses the cultural and creative industries, with a high, positive impact on economic growth, inclusive development and innovation that should be characterized by an increase in productivity, and an important source of employment for young persons. Creativity is destined to be one of the principal stimuli of a sustainable socialist society.

Tourism, as a social activity, demands the creation and promotion of secure, healthy, encompassing, accessible, natural, quality public spaces, that further social and economic development of the various regions. The aim is to take advantage, in a sustainable manner, of their potential in order to generate greater social and economic value. This includes property values, land use and resource preservation, combining the management of tourism in the destination with foreign investment, domestic projects, local initiatives and the private sector, as well as new opportunities to generate a way of life for all within the framework of the economic reordering.

For the recovery period of the industry, in the short and medium terms, there is the opportunity to resume development strategies within the framework of the new realities, and a possible scenario of fewer restrictions under the new Democratic administration in the United States, that could improve relations and increase travel to Cuba, which could include cruise tourism and reestablish licenses for US citizens to visit the country through people-to-people travel.

Undoubtedly in the coming years the world will assume new forms of living, traveling, behaving and relating to others, including the preservation and respect for ecosystems. The lessons learned in these times of profound social, political, environmental and economic crisis should serve as an alert to approach the new era with fewer errors.  

 

References

Banco Mundial (2020) Global Economic Prospects. Informe, enero. Washington D. C. Disponible en <https://bit.ly/3br3J4i> [consulta: 19 febrero 2021].

IATA (International Air Transport Association) (2020) «Passenger Confidence Key to the Post-COVID-19 Recovery in Air Travel».

IATA Economic´s Chart of the Week, 20 de abril. Disponible en <https://bit.ly/3se78Kv> [consulta: 19 febrero 2021].

Maingot, A. P. (2019) «Retos compartidos a la integración and el development. Un análisis de largo alcance». Études caribéennes, n. 42, abril. Disponible en <https://bit.ly/3sbizTy> [consulta: 19 febrero 2021].

Ministerio de Tourism (2019-2020) Informes de trabajo and documentos internos. La Habana.

Mooney, H. and Zegarra, M. A. (2020) Extreme Outlier: The Pandemic’s Unprecedented Shock to Tourism in Latin America and the Caribbean. Washington, D. C.: Inter-American Development Bank. Disponible en <https://bit.ly/3qBFTt9> [consulta: 19 febrero 2021].

UNWTO (Organización Mundial del Tourism) (2020a) El futuro del trabajo en el tourism and el development de competencias. Madrid. Disponible en <https://bit.ly/3dtLKgl> [consulta: 19 febrero 2021].

______ (2020b) How Are Countries Supporting Tourism Recovery? Madrid. Disponible en <https://bit.ly/2ZDMtDn> [consulta: 19 febrero 2021].

Perelló, J. L. (2020a) «El sector tourism hacia una nueva normalidad». Horizonte Cubano, 12 de agosto. Disponible en <https://bit.ly/3boydEg> [consulta: 19 febrero 2021].

______ (2020b) «Tourism en el Caribe. Desafíos ante la adversidad». XIV Conferencia Internacional de Estudios del Caribe. Celebrada el 7 diciembre en la Universidad de La Habana.

______ (2020c) «Una mirada al tourism internacional en Cuba and el Caribe». Conferencia para directivos en el Ministerio de Tourism, La Habana. Sierra, A. (2020) Escenario tourism luego del colapso provocado por la pandemia de la COVID-19. Tesis de maestría. Facultad de Tourism, Universidad de La Habana.

VV. AA. (2020) COVID-19 in Developing Economies. Londres: Centre for Economic Policy Research. Disponible en <https://bit.ly/2NCobqN> [consulta: 19 febrero 2021]

WTTC (World Travel & Tourism Council) (2020a) «Containing the Spread of Panic Is as Important as Stopping the Coronavirus Itself, Says WTTC», 24 de enero. Disponible en <https://bit.ly/37wxz6j> [consulta: 19 febrero 2021].

______ (2020b) Travel & Tourism: Global Economic Impact & Trends 2020, 30 de junio. Disponible en <https://bit.ly/3bqKw2l> [consulta: 19 febrero 2021].

Traducción: Rafael Betancourt
 


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