CAPSTONE PROJECT
Course Code: TTP1012
“Impact Assessment of COVID-19 Pandemic on Insight Vacations”
(Travel & Tourism Industries)
‣ Executive Summary
This research paper aims to outline the effect of COVID-19 outbreak on Insight Vacations, a
travel and tourism company. The paper focuses on various surveys, data, trends and analyses
it to present a clear picture of the current situation of travel and tourism industry around the
world. The paper also focuses on what could be done to overcome this setback given by the
pandemic. Various online journals, company data have been referred to understand the impact
on various travel companies in-depth.
The paper is divided into various sections like Introduction, Literature Review, Environmental
Scan, SWOT Analysis etc. The paper also aims to identify and suggest some recommendation
that could lead to revival of tourism industry by analyzing the current needs and trend of people
around the globe since this pandemic has changed our life like never before it becomes
necessary to amend our business strategy to survive in this world of cut-throat competition.
The paper has also cited, studied and analyzed various reports and studies published by “United
Nations World Tourism Organization (UNWTO)” on “Impact Assessment of COVID-19
Outbreak on International Tourism”. Our paper aims to ascertain the impending effect of
coronavirus pandemic on international tourism industry using “Panel Structural Auto
Regression” on data from the year 1995 to 2020 considering 185 countries and “system
dynamic modelling” i.e. “real time data parameter connected to COVID-19”
Hence, through this we aim to present a clear dimension in the realm of tourism amid COVID-
19 worldwide.
‣ TABLE OF CONTENTS
1. Introduction…………………………………………………………………………….3
2. Literature Review………………………………………………………………………4
3. SWOT Analysis…………………………………………………………………………6
4. PESTEL Analysis………………………………………………………………………8
5. Recommendations………………………………………………………………………10
6. Conclusion………………………………………………………………………………12
2
‣ Introduction
As we know, the tourism business was considered as one of the world’s paramount businesses
until the coronavirus pandemic hit us. We know, in the past several years, tourism industry
around the world has witnessed consistent growth rate and has become the one of the fastest
growing industries globally. The fear of coronavirus worldwide has led to instability,
uncertainty and chaos among many well-established industries globally but unfortunately the
tourism industry is the one which has witnessed sharply falling revenues and is severely
affected by the pandemic economically.
The tourism sector has witnessed around 59% growth rate in the past several years in
international tourists’ advents from “1.5 billion 2019 compared to 880 million in 2009”. We
also know that tourism is also a vital aspect for socio-economic advancement, with tourism
exclusive developments in an ever-increasing number of domestic and well as international
destinations.
It becomes important to mention that tourism industry globally has contributed around $8.9
Trillion to global GDP which is equivalent to 10.3% of total contribution. It is also important
to notice that 1 in every 10 jobs around the globe relates to tourism field which is equivalent
to 330 million jobs worldwide.
Unfortunately, the strong growth that has been achieved over the past decade has been halted
in the worst year i.e. 2020 amid the global COVID-19 pandemic. Airplanes on the ground,
travel restrictions imposed, all hotels closed, it could be drawn that tourism and travel industry
is the most affected by the pandemic.
From the inception of COVID-19 in China, the effect of pandemic has been underestimated to
a very great extent. To assess the impact of COVID-19 on Insights Vacations we have made
a dynamic model using year-wise data from the year 1995-2000. Our study consists of over
185 countries and 16 regions around the world. In such complex situation it has become really
important to study the impact in order to sustain the growth of tourism industry as it co tributes
a hefty portion to global GDP.
3
‣ Literature Review
“INTERNATIONAL TOURISM TO DECLINE OVER 70% IN 2020, BACK TO
LEVELS OF 30 YEARS AGO”
~”United Nations World Trade Organization”
Our world is facing a global health crisis as well as public and financial emergency as a by-
product of COVID-19. We know that travel and tourism industry has been most affected
by this disastrous pandemic with a huge decline in international demand amid travel
restrictions, to contain the virus. As per the latest edition of “UNWTO World Tourism
Barometer”, the count of International tourist arrivals have been slashed by 72% in
January-October 2020 considering with the same period last year. Factors which led to
this was slow virus control in different nations, lack of confidence in tourist and fear.
The sharp decline in the first 10-months of the year 2020 reflects 900 million less
international travel transactions as compared to the previous year i.e. 2019.
[Picture 1.1 (Data), Source : WTO]
4
And this sharp decline of 900 million fewer transactions converts into a monetary loss of
$935 Billion in export revenues transactions from global travel and tourism industry.
A simple conclusion can be drawn from the same that our subject i.e. Insights Vacations
has also suffered the loss accordingly in proportion with the loss incurred by world tourism
industries.
Meanwhile, Asia witnessed an 82% decline in arrival in Jan to Oct 2020, as per the
UNWTO analysis the middle-east, Asia and pacific has witnessed a 73% decline.
Considering the reduction in International travel, worldwide travel restrictions amid
pandemic, there have been a sharp decline in travel bookings and therefore Insights
Vacations have also seen a decline in its booking and customer base. The studies also
suggest that current trends will be consistent and would take a long time to get back on the
track.
Based on the current trends, UNWTO states that we have moved 30 years back in the
tourism sphere. UNWTO’s encompassed scenarios for the year 2021 to 2024 reflects
that return to normal in international tourism by the second half of 2021. Even so, a
return to 2019 levels in terms of international arrivals and tourism expenditure could
take from 2.5 years to 4 years approximately.
It is also pertinent to note that “UNWTO Confidence Index” remains at a sheer record low.
As per the panel experts of UNWTO, rebound in international tourism may take place till
third quarter of 2021 and the reports suggest that it might return to pre-pandemic stage not
before 2023.
5
6
‣SWOT Analysis
‣STRENGHTS
• Proven competence of tourism industry in past pandemics : In the past year too
when the pandemic hit this world, tourism industries have recovered in a short-span
after the pandemic is over like in the case of Ebola, h1n1 and bird flu.
• Domestic tourism can be proved to a boom : domestic tourism industry can pave it’s
way amid this crisis because people would prefer to explore within their nation for a
recreation rather than take a risk.
• Adaptive Behaviour : tourism industry can be back on track once it’s assure its
customer that it is safe by adopting hygiene protocols and maintaining new social
distancing rules
• Government Aid : The government wants the economy back on track for which it
would provide some incentives and privileges to tourist and the tourism industry
‣WEAKNESSES
• People affected with COVID-19 are also high spenders, so the recovery would take
time.
• Major halt in the airline industry with worldwide travel ban.
• Dearth of references in previous recessions like during Ebola and H1N1 Flu.
• People have a perception of risk in travelling and a fear in mind.
• Social distancing makes it harder to recover as tourism is all about proximity and
socialising.
7
‣OPPORTUNITIES
• Re-organize business strategy : The pandemic life has given us a chance and a
challenge to rethink about our business model and make it more alluring for our
customers base.
• Digitalization & Innovation in industry : COVID-19 has given us an opportunity to
digitalize our entire industrial framework in order to make it more accessible to people
around and far.
• Sustainable-oriented goals and services : The pandemic has provided us with an
opportunity to think and engage towards sustainable goals.
• De-escalation phases commenced by many nations against the ‘new normal‘
• Introduction & Adoption of new plans keeping in mind changed circumstances
‣THREATS
• Worldwide recession, employment and jobs scarcity; increasing gender gap, unstable
income, COVID-19 risk, low wages are some of the major threats to tourism industry
persisting today.
• Unpredictable nature of COVID-19 pandemic and non-availability of vaccines.
• Frequent lockdown and ban on travels in various nations are some of the primary threat
which create a sense of fear in common people’s perception for travelling.
• New Normal hasn’t been defined yet or no trends are available for the same as to adapt
to the business model accordingly.
8
‣ PESTEL Analysis
‣ Political Factors : The government is trying it’s best to overcome such crisis in every nations,
moreover as the tourism industry is the one which is most affected by the pandemic
economically, the government should instigate some incentives and welfare schemes as to
bring back the pre-covid participation of people, as we know the tourism and travel industry
have contributed to global GDP a hefty amount. Therefore it becomes an obligation on the part
of the govt. to retrieve the losses and bring back the lost charm of this industry.
‣ Economic Factors : This pandemic have affected the travel and tourism industry to a very
great extent, this sheer loss could be estimated by the number $935 billion. After the pandemic,
the people will have less money to spend on leisure, so we expect that there would be less
sales/bookings on Insights Vacations, considering the same we should provide some discount
offers and combo plan in order to allure customers on our platform.
‣ Social Factors : Our perception of life has changed a lot after this global health crisis hit us
in the most unfortunate way, the new era is about social distancing and less physical contact
which has led to sharp decline in the services of our venture insights vacations. People are
scared to move out of their home, vacation is like a dream now. In this new normal, regaining
the credibility of tourism industry is of utmost importance right now. The tourism industry
needs to focus more on health, hygiene, cleanliness in order to gain the trust of people.
‣ Technological Factors : Technology has proved to be a boon for the ventures like Insights
Vacations and other tourism companies. Today, technology has not only increased the
accessibility but also feasibility. Technology has not only made things easier but has also
bridged the communication gap between the customers and the service provider. With such
advancement, insights vacation could reach to numerous people in a hast and connect with
them like never before.
‣ Environmental Factors : After the global health crisis COVID-19, perception of people
about life, nature and environment has changed a lot. Considering these amended trends the
tourism company should focus on such destination and places which offer environmental safety
related to health and life. Tourism company should now focus more on not only providing
9
physical comfort but also mental comfort considering the changed circumstances.
‣ Legal Factors : An organization must recognize what is legal or right, with the changing
social dynamics and the society there are numerous changes into laws by the legislatures or
even the courts. As we are very much aware that law is dynamic i.e. it changes with the
perception and needs of the society and time. The organization must keep up to date it’s office
bearers in order to avoid any altercation with the stakeholders of the society and not cause
discomfort to it’s customers.
There are many factors, external, which are responsible for the changing institutional
framework and according to me, these framework should be dynamic rather than static because
society and needs of the people changes with time and to cater those needs a dynamic approach
is a must and in order to have achieve excellency in the file of tourism or otherwise, caering
with utmost effectiveness in the key to success. So, the officer bearer should look out for a
change that is taking place in the society and the factors affecting their organisation and amend
their business structure accordingly, in order to negate the negative growth due to changing
dynamics and needs i.e. Adaption turns out be a key element here.
10
Recommendations:
COVID-19 pandemic has changed everything for us, our perception about life, habits and
everything. With these social and cultural changing dynamics, it is necessary for a business to
sustain to amend its strategy accordingly.
Tourism Companies should connect more with people with the help of modern-day
technologies like social media and provide them dedicated and exclusive service to create an
aura of personal touch.
To survive this crisis, companies should renegotiate their 20 biggest expenses to cut down
on surplus expenditure and all their party contracts should be reviewed after the changed
dynamics of this coronavirus pandemic.
Revise cancellation policy, do not offer 100% refunds like before and make an earning
through the same by amending the cancellation policy, like if a person cancels his trip 7 days
prior to the scheduled date, he shouldn’t get any refund, but make sure to mention that previous
refunds policy would be back on track once the coronavirus pandemic is over
Government Aid or Assistance, try to secure a zero interest or subsidy based government
loan and pay all the remaining wages and rent that have been pending and your organization
couldn’t pay it because of no earning in the lockdown period.
Marketing Changes, cut down on any expensive radio or TV advertisement and get you way
back to essentials and basic that drive the most of your traffic.
Product/Services Development, This is the best time to think about your services that you are
offering to your customers and change your business plan accordingly in order to suite their
interest.
11
Conclusion:
The social and cultural dynamics of today’s society, as well economical and technical
advancement, primarily in the transport framework, have led to drastic changes in the tourist
demands side. Nevertheless, other factors, such as the amplified geopolitical steadiness and the
inaugural of many countries borders, are reasons for an all-round advancement in the realm of
tourism industry “(Franklin, 2003; Weaver, 1998)”. Despite a drastic decline in the growth rate
of international tourism, this industry has contributed to the world and have catered the global
GDP in a hefty manner.
At last, the result of this research concludes that tourism sector is a sensitive realm and is easily
affected by global crisis, numerous factors regulating the growth of this industries have seen a
downfall of the same.
The global health emergency that have started with the inception of COVID-19 pandemic has
now become primary concern of travelers around the globe. It is now almost every day that
explorers or travelers cancele their booked tickets everyday with the news of spread of this
virus.
We have fought with pandemics like this before and we will fight this again. It’s just a matter
of time when everyone gets vaccinated, then the virus gets contained and everything get back
to where it was in the pre-pandemic life.
12
References:
1. United Nations World Trade Organization. (2020, December). Impact assessment of the
COVID-19 outbreak on international tourism | UNWTO. World Trade Organization.
https://www.unwto.org/impact-assessment-of-the-covid-19-outbreak-on-international-
tourism
2. Akbıyık, A., & Güliz Uğur, N. (2020, September 6). Impacts of COVID-19 on global tourism
industry: A cross-regional comparison. PubMed Central (PMC).
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7474895/
3. Sbai, A. (2020, September 28). How COVID-19 Impacted Travel & Tourism Industry
Globally. Infomineo. https://infomineo.com/covid-19-impacted-travel-tourism-industry/
4. Aburumman, A. A. (2020, November 5). COVID-19 impact and survival strategy in business
tourism market: the example of the UAE MICE industry. Humanities and Social Sciences
Communications.https://www.nature.com/articles/s41599-020-00630-
8?error=cookies_not_supported&code=eedcab12-81ba-4046-a165-afb173b3fa86
5. Richter, F. (2020, September 2). This is the economic impact of the coronavirus on tourism.
World Economic Forum. https://www.weforum.org/agenda/2020/09/pandemic-covid19-
tourism-sector-tourism/
6. Staista. (2020, October 20). Global change in travel and tourism revenue due to COVID-19
2019–2020. https://www.statista.com/forecasts/1103426/covid-19-revenue-travel-tourism-
industry-forecast
7. Fas, J. (2020, March 17). This is how coronavirus could affect the travel and tourism
industry. World Economic Forum. https://www.weforum.org/agenda/2020/03/world-travel-
coronavirus-covid19-jobs-pandemic-tourism-aviation/
8. H T, S. K. (2020, February 2). Impact of COVID-19 on Tourism Industry: A Review. IDEAS.
https://ideas.repec.org/p/pra/mprapa/102834.html
13
