Publication: How the Tourism Sector in Emerging Markets is Recovering from COVID-19
Loading...
Date
2020-12
ISSN
Published
2020-12
Author(s)
Editor(s)
Abstract
Summary of Note 95, how the Tourism Sector in Emerging Markets is Recovering from COVID-19 Tourism is an important sector that accounts for 10 percent of global gross domestic product and one in every 10 jobs. As a result of COVID-19-related travel restrictions, the United Nations World Tourism Organization (UNWTO) has estimated that international tourist arrivals in 2020 will drop between 58 and 78 percent, which puts 100 to 120 million direct tourism jobs at risk. The effects of COVID-19 are felt throughout the extensive tourism value chain, including airlines, hotels, restaurants, tour operators, food suppliers, farmers, retailers, and a wide range of other small and medium enterprises. Although all tourist destinations strongly feel the impact from the pandemic-related crisis, not all have the same vulnerabilities or capacity to recover. This note explores the factors in specific tourism destinations that contribute to pandemic-related vulnerability, as well as the factors that support the resilience of the tourism sector. Examining all these factors together provides a snapshot of the countries as well as the subsectors that are most likely to recover first, as well as those that will require greater support to weather and recover from the crisis.
Link to Data Set
Citation
“Mekharat, Nisachol; Traore, Nouhoum. 2020. How the Tourism Sector in Emerging Markets is Recovering from COVID-19. EMCompass;No. 95. © International Finance Corporation. http://hdl.handle.net/10986/34901 License: CC BY-NG-ND 3.0 IGO.”
Associated URLs
Associated content
Other publications in this report series
Publication Financing Deep Tech(World Bank, Washington, DC, 2021-10)Deep tech companies - those built on advances in biotechnology, robotics, electronics, artificial intelligence, and other advanced technologies—aim to solve complex social and environmental challenges. Today the majority of deep tech companies are being launched in developed countries, yet the solutions they can provide are applicable globally. Many of these solutions are especially critical to emerging markets, as the intractable challenges of climate, health, and connectivity, among other issues, disproportionately affect these nations. Addressing these challenges is a strategic priority for development finance institutions and governments worldwide, so financing deep tech companies and boosting deep tech ecosystems in order to deliver new solutions globally is a pressing matter. Doing so, however, requires substantial capital and carries a higher degree of risk than ordinary venture investments. This note examines the process of financing a deep tech company, including the benefits and drawbacks of currently available types of financing, and suggests examples of promising but not yet widespread alternatives.Publication Banking on FinTech in Emerging Markets(International Finance Corporation, Washington, DC, 2022-01)Despite near-universal access to financial services in advanced economies, financial exclusion is stubbornly persistent in many emerging markets, leaving huge swaths of low-income populations unbanked or underbanked. FinTech companies, which apply innovative technologies to deliver such services in new ways, have begun to tap into the enormous unmet demand that this represents. These companies are starting to thrive in emerging markets, though regulatory issues, particularly weak consumer protection measures, remain to be resolved in many countries. If these can be overcome, and more progress toward universal access to digital infrastructure can be made, FinTechs will continue to scale and spread.Publication Sustainability-Linked Finance(International Finance Corporation, Washington, DC, 2022-01)Sustainability-linked finance is designed to incentivize the borrower’s achievement of environmental, social, or governance targets through pricing incentives. Launched in 2017, it has now become the fastest-growing sustainable finance instrument, with over $809 billion issued to date in sustainability-linked loans and bonds. Yet these instruments are still nascent in emerging markets, which represent only 5 percent of total issuance to date. This note shares examples of recent sustainability-linked financing, including several involving IFC in various roles, to highlight how investors can utilize these new instruments in emerging markets and mitigate greenwashing risksPublication Blended Concessional Finance(International Finance Corporation, Washington, DC, 2021-07)Blended concessional finance, the combination of commercial finance from the private sector and development finance institutions (DFIs) with concessional finance from public and other sources, is increasingly being used by DFIs to support developmentally important projects where normal DFI or commercial finance is not available because of the high risks involved. This can be especially significant in lower-income and fragile and conflict-affected situations (FCS), where risks are high and innovative and pioneering projects can be critical to economic growth, market creation, and poverty reduction. Blended concessional finance is also being used during the COVID-19 pandemic to help sustain struggling businesses hurt by demand and supply shocks, and to rebuild economies toward green, resilient, and inclusive growth. As blended concessional finance involves the use of concessional public or philanthropic1 funds to enhance the viability of private sector projects, strong processes, particularly in the areas of transparency, access, and governance, are necessary to ensure that these resources are used effectively and without distorting markets.Publication Artificial Intelligence Innovation in Financial Services(International Finance Corporation, Washington, DC, 2020-06)Artificial intelligence technologies are permeating financial services sectors around the world. The application of these technologies in emerging markets allows financial service providers to further automate their business processes and to leverage new and big data sources to overcome obstacles, including the high cost of serving rural and low-income customers and establishing customer identity and creditworthiness, that prevent the delivery of financial services to many consumers. Realizing financial inclusion benefits through the adoption of artificial intelligence relies on its responsible adoption by firms, on competitive market settings, and on continued investment in the necessary infrastructure.
Journal
Journal Volume
Journal Issue
Collections
Related items
Showing items related by metadata.
Publication Lessons for Electric Utilities from COVID-19 Responses in Emerging Markets(International Finance Corporation, Washington, DC, 2020-09)The Coronavirus (COVID-19) pandemic and the resulting economic shutdown have severely depressed electricity demand across the globe, with acute consequences for the revenues and financial health of utilities, as well as smaller providers of utility services and off-grid companies. In many places, utility service providers also must manage the inability of consumers to pay for their services. Government support has been forthcoming, but utilities need to work closely with policymakers to ensure that programs are carefully designed in order to maintain ongoing system reforms, competitiveness, and affordability, and avoid long-lasting market disruptions. These support measures should avoid redundancy among sectors and ensure that resources are efficiently allocated and that welfare improvements are fairly distributed across the country in a sustainable manner. Investors must also understand changes to utilities’ finances and should work to support further reforms.Publication COVID-19 and Tourism in South Asia(World Bank, Washington, DC, 2020-06)COVID-19 (coronavirus) is affecting nearly 47.7 million travel and tourism jobs across South Asia, many held by women and vulnerable communities working in the informal sector. Losses of over 50 billion US dollars in gross domestic product in the region are expected in the travel and tourism sector alone as a result of the crisis. Governments are already responding with emergency programs to help small and medium enterprises stay afloat and save jobs. As the South Asia region moves from crisis to recovery planning, governments and destinations have an opportunity to think strategically about the future of their tourism sectors and implement policies that will improve the industry. This regional brief is designed to raise awareness of the importance of tourism to the region and to the World Bank's regional portfolio, highlight some measures being taken by governments and the Bank to address the crisis, and provide recommendations for short- and medium-term sustainable regional recovery, including through greater intraregional tourism. The brief covers Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka. Afghanistan was excluded due to a lack of data.Publication Rebuilding Tourism Competitiveness(World Bank, Washington, DC, 2020-07)The travel and tourism industry was one of the first sectors to be affected by COVID-19. Since March, the entire value chain that defines the industry — spanning airlines, bus and train companies, cruise lines, hotels, restaurants, attractions, travel agencies, tour operators,online travel entities, and others — has entered a state of suspended animation. While bankruptcies of major airlines and large tour operators have been widely reported, the effectsof the crisis are perhaps being most acutely felt by the Small and Medium-sized Enterprises(SMEs) that make up around 80 percent of licensed tourism and tourism-related businesses, and are at the greatest risk of failure. Their potential collapse threatens to adversely affect millions of people across the world, including many vulnerable communities, who depend on tourism for their livelihoods. According to the World Travel and Tourism Council, as many as 100 million jobs supported by travel and tourism are currently at risk.Publication Financial Sector Policy Response to COVID-19 in Emerging Markets and Developing Economies(Elsevier, 2021-05-21)This paper introduces a new global database and a policy classification framework that records the financial sector policy response to the COVID-19 pandemic across 155 jurisdictions and over time. It documents that authorities around the world have taken a diverse array of measures to mitigate financial distress in the markets and for borrowers, and to support the provision of critical financial services to the real economy. Using Cox proportional hazards and Poisson regressions, the paper takes initial steps to analyze the determinants of policy makers’ responsiveness and activity in emerging markets and developing economies, respectively. The results indicate that policy makers in richer and more populous countries have been significantly more responsive and have taken more policy measures. Belonging to a monetary union is also significantly associated with a faster and more frequent intervention. Countries with higher private debt levels tend to respond earlier with banking sector and liquidity and funding measures. The spread of COVID-19, macro-financial fundamentals, pressure on foreign exchange markets, political settings, and fiscal and containment policies appear to play a limited role in determining policy response. In a substantially smaller sample, the paper explores the role of banking sector characteristics and finds that emerging markets and developing economies with higher private bank credit to GDP and that have adopted Basel III reforms have taken fewer policy measures.Publication The Early Labor Market Impacts of COVID-19 in Developing Countries(World Bank, Washington, DC, 2021-01)The economic crisis caused by the COVID-19 pandemic has sharply reduced mobility and economic activity, disrupting the lives of people around the globe. This paper presents estimates on the early impact of the crisis on labor markets in 39 countries based on high-frequency phone survey data collected between April and July 2020. Workers in these countries experienced severe labor market disruptions following the COVID-19 outbreak. Based on simple averages across countries, 34 percent of the respondents reported stopping work, 20 percent of wage workers reported lack of payment for work performed, 9 percent reported job changes due to the pandemic, and 62 percent reported income loss in their household. Stopping work was more prevalent in the industrial and service sectors than in agriculture. Measures of work stoppage and income loss in the high-frequency phone survey are generally consistent with gross domestic product growth projections in Latin America and the Caribbean but not in Sub-Saharan Africa. This suggests that the survey data contribute new and important information on economic impacts in low-income countries.
Users also downloaded
Showing related downloaded files
Publication Digital Progress and Trends Report 2023(Washington, DC: World Bank, 2024-03-05)Digitalization is the transformational opportunity of our time. The digital sector has become a powerhouse of innovation, economic growth, and job creation. Value added in the IT services sector grew at 8 percent annually during 2000–22, nearly twice as fast as the global economy. Employment growth in IT services reached 7 percent annually, six times higher than total employment growth. The diffusion and adoption of digital technologies are just as critical as their invention. Digital uptake has accelerated since the COVID-19 pandemic, with 1.5 billion new internet users added from 2018 to 2022. The share of firms investing in digital solutions around the world has more than doubled from 2020 to 2022. Low-income countries, vulnerable populations, and small firms, however, have been falling behind, while transformative digital innovations such as artificial intelligence (AI) have been accelerating in higher-income countries. Although more than 90 percent of the population in high-income countries was online in 2022, only one in four people in low-income countries used the internet, and the speed of their connection was typically only a small fraction of that in wealthier countries. As businesses in technologically advanced countries integrate generative AI into their products and services, less than half of the businesses in many low- and middle-income countries have an internet connection. The growing digital divide is exacerbating the poverty and productivity gaps between richer and poorer economies. The Digital Progress and Trends Report series will track global digitalization progress and highlight policy trends, debates, and implications for low- and middle-income countries. The series adds to the global efforts to study the progress and trends of digitalization in two main ways: · By compiling, curating, and analyzing data from diverse sources to present a comprehensive picture of digitalization in low- and middle-income countries, including in-depth analyses on understudied topics. · By developing insights on policy opportunities, challenges, and debates and reflecting the perspectives of various stakeholders and the World Bank’s operational experiences. This report, the first in the series, aims to inform evidence-based policy making and motivate action among internal and external audiences and stakeholders. The report will bring global attention to high-performing countries that have valuable experience to share as well as to areas where efforts will need to be redoubled.Publication Global Economic Prospects, January 2025(Washington, DC: World Bank, 2025-01-16)Global growth is expected to hold steady at 2.7 percent in 2025-26. However, the global economy appears to be settling at a low growth rate that will be insufficient to foster sustained economic development—with the possibility of further headwinds from heightened policy uncertainty and adverse trade policy shifts, geopolitical tensions, persistent inflation, and climate-related natural disasters. Against this backdrop, emerging market and developing economies are set to enter the second quarter of the twenty-first century with per capita incomes on a trajectory that implies substantially slower catch-up toward advanced-economy living standards than they previously experienced. Without course corrections, most low-income countries are unlikely to graduate to middle-income status by the middle of the century. Policy action at both global and national levels is needed to foster a more favorable external environment, enhance macroeconomic stability, reduce structural constraints, address the effects of climate change, and thus accelerate long-term growth and development.Publication Global Economic Prospects, January 2024(Washington, DC: World Bank, 2024-01-09)Note: Chart 1.2.B has been updated on January 18, 2024. Chart 2.2.3 B has been updated on January 14, 2024. Global growth is expected to slow further this year, reflecting the lagged and ongoing effects of tight monetary policy to rein in inflation, restrictive credit conditions, and anemic global trade and investment. Downside risks include an escalation of the recent conflict in the Middle East, financial stress, persistent inflation, weaker-than-expected activity in China, trade fragmentation, and climate-related disasters. Against this backdrop, policy makers face enormous challenges. In emerging market and developing economies (EMDEs), commodity exporters face the enduring challenges posed by fiscal policy procyclicality and volatility, which highlight the need for robust fiscal frameworks. Across EMDEs, previous episodes of investment growth acceleration underscore the critical importance of macroeconomic and structural policies and an enabling institutional environment in bolstering investment and long-term growth. At the global level, cooperation needs to be strengthened to provide debt relief, facilitate trade integration, tackle climate change, and alleviate food insecurity.Publication Global Economic Prospects, June 2025(Washington, DC: World Bank, 2025-06-10)The global economy is facing another substantial headwind, emanating largely from an increase in trade tensions and heightened global policy uncertainty. For emerging market and developing economies (EMDEs), the ability to boost job creation and reduce extreme poverty has declined. Key downside risks include a further escalation of trade barriers and continued policy uncertainty. These challenges are exacerbated by subdued foreign direct investment into EMDEs. Global cooperation is needed to restore a more stable international trade environment and scale up support for vulnerable countries grappling with conflict, debt burdens, and climate change. Domestic policy action is also critical to contain inflation risks and strengthen fiscal resilience. To accelerate job creation and long-term growth, structural reforms must focus on raising institutional quality, attracting private investment, and strengthening human capital and labor markets. Countries in fragile and conflict situations face daunting development challenges that will require tailored domestic policy reforms and well-coordinated multilateral support.Publication The Container Port Performance Index 2023(Washington, DC: World Bank, 2024-07-18)The Container Port Performance Index (CPPI) measures the time container ships spend in port, making it an important point of reference for stakeholders in the global economy. These stakeholders include port authorities and operators, national governments, supranational organizations, development agencies, and other public and private players in trade and logistics. The index highlights where vessel time in container ports could be improved. Streamlining these processes would benefit all parties involved, including shipping lines, national governments, and consumers. This fourth edition of the CPPI relies on data from 405 container ports with at least 24 container ship port calls in the calendar year 2023. As in earlier editions of the CPPI, the ranking employs two different methodological approaches: an administrative (technical) approach and a statistical approach (using matrix factorization). Combining these two approaches ensures that the overall ranking of container ports reflects actual port performance as closely as possible while also being statistically robust. The CPPI methodology assesses the sequential steps of a container ship port call. ‘Total port hours’ refers to the total time elapsed from the moment a ship arrives at the port until the vessel leaves the berth after completing its cargo operations. The CPPI uses time as an indicator because time is very important to shipping lines, ports, and the entire logistics chain. However, time, as captured by the CPPI, is not the only way to measure port efficiency, so it does not tell the entire story of a port’s performance. Factors that can influence the time vessels spend in ports can be location-specific and under the port’s control (endogenous) or external and beyond the control of the port (exogenous). The CPPI measures time spent in container ports, strictly based on quantitative data only, which do not reveal the underlying factors or root causes of extended port times. A detailed port-specific diagnostic would be required to assess the contribution of underlying factors to the time a vessel spends in port. A very low ranking or a significant change in ranking may warrant special attention, for which the World Bank generally recommends a detailed diagnostic.