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Thursday , August 13 2020

Travel and tourism faces ‘biggest’ looming economic crisis since ’08

KUWAIT CITY, March 11, (KUNA): The travel-tourism sector has incurred substantial losses due to states’ extraordinary restrictions to minimize peoples’ movement amid global spread of the novel coronavirus (COVID-19).

Travel and aviation agencies are grappling with emerging issues and problems emanating from the mushrooming disease; embroiled in the worst crisis of global dimensions, unprecedented since the world economic crisis that began 2008.

The International Air Transport Association (IATA) estimated in a recent report losses forecast to be suffered by international travel companies at USD 113 billion in case the coronavirus continued to claim more victims in many countries.

IATA has warned that the losses in the aviation sector might be equal in dimension and volume to those incurred during the global economic crisis that broke out in 2008, noting that companies might lose 15 percent of operations if the virus is not contained soon.
Nabila Al-Anjari, Managing Director at Leaders Group for Consulting and Development, said in an interview with Kuwait News Agency (KUNA) the virus spread in first-degree infected countries would be quite negative and tremendous. Ninety percent of flights’ booking for the coming three or four weeks have been cancelled.

Meanwhile, top hotels across the globe are struggling to cope with repercussions of the serious health issue. In Kuwait, room occupation at hotels has dropped 20 percent although this period of time is the peak season, Al-Anjari said.

The virus spread has prompted authorities in Dubai to cancel the Arabian Travel Market, the largest promotion exhibition and event for the sector at the regional level. Abroad, the International Travel and Trade Show, the top world tourism fair, has been postponed. Global tourism sector will suffer the most drastic decline since 2001, in stark contrast to the ongoing boom it had witnessed since 2009, she added.

Meanwhile, Nassib Adnan, manager of the Tourism and Travel Office Company said booking in the travel and hotels’ sector dropped, during March and April, adding that clients were awaiting “positive news,” such as a substantial decline in the virus spread, to confirm their summer holidays’ booking. Adnan predicts decrease of travel booking by 70 percent for April, compared to the same month of the last year.

In the event its spread has receded or a vaccine is found, the losses can be compensated in May and June, he added. Manager of Tawaf Travel and Tourism Company Mahmoud Al-Saleh told KUNA that clients’ plans were adversely affected with extraordinary precautions, taken in countries afflicted with the contagious disease.

Tourism expert Kamal Kabsha noted that some travel agencies “are threatened with bankruptcy” due to the global health issue. The Arab Tourism Organization said in a statement that demand in the sector fell by six percent, contrary to a previous growth forecast of 4.8 percent.

Booking at the international level has dropped by 11 percent since the epidemic breakout, it added. Many Arab countries have suspended flights to and from countries, and/or closed border land checkpoints, with states afflicted with the scary health hazard that has already claimed thousands of lives worldwide.

By Mohammad Al- Mutairi and Abdullah Al-Dabbous

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