Airplanes Grounded by COVID-19... 100 Million Travel and Tourism Jobs Disappear Worldwide

On the 29th, the duty-free shop at Terminal 1 of Incheon International Airport is quiet. Photo by Mun Ho-nam munonam@

[Asia Economy Reporter Seungjin Lee] The travel and tourism industry, hit hard by the novel coronavirus infection (COVID-19), is expected to lose more than 100 million jobs worldwide, according to an analysis.

On the 4th, according to the Korea Culture and Tourism Institute's tourism knowledge information system 'TourGo,' the World Travel & Tourism Council (WTTC) recently projected that 100.8 million jobs will be lost in the global travel and tourism industry due to COVID-19. Established in 1990, the WTTC is headquartered in London, UK, and is composed of CEOs from the world's top 100 companies related to travel and tourism, including airlines and hotels.

The WTTC cited the contraction of the tourism industry due to overseas travel restrictions and bans imposed by countries worldwide as the main reason for the job losses. By continent, the Asia region, including Korea, is expected to see the largest loss of 63.4 million tourism jobs due to COVID-19.

In fact, the domestic travel and tourism industry is currently facing a severe crisis due to the impact of COVID-19. According to the Korea Hotel Association, the hotel industry suffered losses amounting to 580 billion KRW in March alone due to a sharp decline in reservations caused by COVID-19. In addition to the huge damage from the decrease in customers, some hotels had to temporarily close for several days after confirmed patients stayed, reluctantly shutting down operations.

Small businesses that could not withstand the sharp drop in sales went bankrupt one after another. According to data from the Korea Association of Travel Agents (KATA) Travel Information Center, from January 20, when the first COVID-19 case was confirmed, to the 10th of last month, 192 domestic and international general travel agencies reported closures to local governments or districts. This means that two travel agencies closed every day. Travel agencies such as Hana Tour, Modetour, and Interpark Tour are implementing high-intensity self-help measures such as paid leave and a three-day workweek.

The situation is also serious for hotels and duty-free shops. Due to the decrease in foreign arrivals, domestic hotels have been experiencing an extreme state of 'room occupancy rates below 10%' for more than two months since March. In the case of Hotel Shilla, it recorded an operating loss for the first time in 20 years on a quarterly basis. Hotel Shilla's first-quarter sales were 943.7 billion KRW, down 29.7% compared to the same period last year. Operating losses amounted to 66.8 billion KRW, turning to a deficit compared to the previous year, as both its main businesses, hotels and duty-free shops, were severely impacted by COVID-19.

In particular, the duty-free industry has seen inbound and outbound travelers decrease by 93% as of March compared to last year, resulting in virtually 'zero' sales. In this situation, the duty-free industry has complained of management difficulties and accumulated inventory, leading the Korea Customs Service to take an unprecedented temporary measure allowing the domestic distribution of duty-free goods in stock.

Assuming that 20% of the long-term inventory currently held by duty-free shops is consumed through this measure, the Korea Customs Service estimates that the duty-free industry could secure about 160 billion KRW in liquidity. Only duty-free goods in long-term inventory for over six months are allowed to be sold domestically, with department stores and outlets mentioned as the primary sales channels.

This content was produced with the assistance of AI translation services.