Travel bans are (finally) lifting.
As COVID vaccination rates continue to rise across the globe, countries are easing their international travel bans at long last.
Even Australia, which perhaps earned the superlative for the tightest lockdown, announced that fully vaccinated citizens can begin to travel internationally for the first time since March 2020.
Due to its restrictions, which resulted in relatively low rates of infections, Australians were able to maintain a fairly normal daily life throughout most of the pandemic. However, certain sectors of the economy — including tourism, which generated 45 billion Australian dollars each year — have certainly been hurting.
Unfortunately, it will be a few months before relief comes. Australia will not welcome international visitors until it hits an 80% vaccination rate among adults, which is expected in March at the earliest. Then, the country’s first priorities are skilled migrants and international students. No guidance has been announced about when international tourists will be allowed in, causing frustration for industry operators who are eager to get back to business.
But, the reopening of outbound travel is welcome news for global tourism. In 2019, 11.3 million Australians traveled aboard, with top destinations including New Zealand, Indonesia, America, the UK, and China.
Recently, the US announced that it would begin letting vaccinated travelers from 33 countries enter its borders beginning November 8. The greenlit countries include a number of European nations, the UK, Brazil, China, and India. It is also reopening land borders to Mexico and Canada.
These travel bans have made a significant impact on the US economy. According to the US Travel Association, America lost $500 billion in travel spending during the pandemic, costing nearly $1.1 trillion in economic output. Additionally, prior to the pandemic, direct travel jobs accounted for 6% of the workforce and total travel-supported jobs for 11%. But in 2020, these sectors accounted for 35% and 65% of jobs lost, respectively.
In short: America reopening its borders is critical to its post-pandemic recovery.
For those who have been separated from their families for nearly 18 months, as well as the global economy, this is excellent news. However, we should also be cautious of the new frustrations it may create for travelers — particularly around the holidays.
For example, the influx of tourists may cause prices of certain flights — especially at popular hub airports — to rise. To meet increasing demand, airlines have said they will bring more planes back in service and add more flights to their schedules. But time will tell how well that works.
Lines at the airport are also expected to get longer, both due to volume and because international travelers are required to show their vaccination and COVID testing documentation. There could also be a shortage of and/or increasing prices for hotels and rental cars.
The combination of these factors could discourage domestic travelers from booking flights, and potentially hinder the boost the tourism industry is expecting.
However, I am very optimistic. These are the first signs that we are getting back to normal. Or at least a new kind of normal.
Danilo Diazgranados is an independent investor in the global food and wine, financial services, real estate, and the hospitality sectors.
