The Impact of Covid-19 on the Travel and Tourism Industry
Added on 2021-01-04
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20023129 Liew Chun EeThe impact of Covid-19 on the Travel and Tourism industry of Thailand and its nation’s economy The virus of COVID-19 was first reported by officials in China, in the month of December 2019. Fast forwarding to a few months, the virus had been declared as a pandemic in 11th of March 2020. As a result of this virus, numerous countries have implemented a prevention protocol in attempt to stop the spread of the virus, such as lockdowns and social distancing etc until a solution is found. As lockdowns are being implemented by countries, although it helps slowing down the spread of the virus, the economy is susceptible to take a hit. In this report, I will be focusing on the impact caused by the virus on the economy of Thailand and its Travel and Tourism industry.To understand the impact of Covid-19, we must first look and compare the statistics from the before and after of the appearance of the Covid-19. Thailand’s GDP was considered to be growing well before the appearance of the virus. According to the statistics shown by (R1) https://tradingeconomics.com/thailand/gdp#:~:text=GDP%20in%20Thailand%20is%20expected,according%20to%20our%20econometric%20models, the total GDP accumulated by the year of 2019 is valued at $543.65bn USD which was the official data collected from the World Bank. The forecasted GDP for the year of 2020 is valued at $526.72bn USD.1015030045060020102011201220132014201520162017201820192020526.72543.65506.51456.29413.43401.34407.34420.33397.56370.82341.10Annual Gross Domestic Product (GDP) / billion USD($)Figure 1
Furthermore, the (R2) https://tradingeconomics.com/thailand/gdp-growth-annual, official data collected by the Office of the National Economic and Social Development Council in Thailand shows that in the year of 2019, the GDP growth rate averages at 2.35%, with its last quarter from October to December lowest compared to the rest of the quarters at 1.5%. Following the appearance of the virus in December 2019, the first quarter of 2020 ended with a GDP growth of -2%. This was the worst economic downturn that Thailand has experienced since the second quarter of 1998. These data shows that before the appearance of the virus in the country, the economy was doing well although it was not as good as it other neighboring countries in the ASEAN community. As countries begin to worry about the spread of the virus, more countries are closing down their borders and so did Thailand. Non-essential businesses were shut down and everyone had to stay home as much as possible.Page of 217Thailand’s GDP Growth Rate from Q3 2017 to Q2 2020Figure 2
As we all know that lockdown decreases activity, the imports and exports of Thailand will be affected by other nations too. The bar chart consists of information collected from (R3) https://tradingeconomics.com/thailand/imports, (R4) https://www.ceicdata.com/en/indicator/thailand/total-exports#, (R5) https://www.statista.com/statistics/332201/export-of-goods-to-thailand/, (R6) https://www.statista.com/statistics/332113/import-of-goods-to-thailand/. The data shows that in 2019, the import amounted to $236.64bn USD whereas the export amounted to $246.24bn USD, a surplus of $9.6bn USD. As the year of 2020 has not ended yet, information of the last quarter is not available. However, by totaling up the three quarters in the current year, the total import is at $153.9bn USD while the total export is at $173.1bn USD. It is highly unlikely for the imports and exports to exceed last year’s value due to the impact of corona virus. Both imports and exports have declined by 34.96% and 29.70% respectively.Page of 317$0$17$35$52$69$87$104$121$139$156$173$191$208$225$243$2602019Jan 2020 to Sep 2020Q1 2020Q2 2020Q3 202058.751.762.7173.1246.2448.846.458.7153.9236.64Thailand's Import / bn USD($)Thailand's Export / bn USD($)Thailand’s import and export in the year of 2020 Figure 3
These charts collected from (R7) https://www.weforum.org/agenda/2020/05/coronavirus-covid19-consumers-shopping-goods-economics-industry shows how consumer spending has been affected by Covid-19. The research are separated into 6 different categories, household, food & grocery, entertainment, services, travel & transportation and apparel. In categories like household, food & grocery and entertainment, we are able to observe various colors like pink and purple which symbolize more spending. For instance, household supplies, grocery and home entertainment. The least spending items in each of the three categories are skin care & make up, as people do not go out as often they consume less of it. Restaurants and outside entertainment, because people are afraid of catching the virus, they do not visit restaurants as much. Services such as personal-care services are the least spend on during Covid-19. In general, the service category is mostly covered in black because of the frequent human interaction within these services. It is a no brainer for the travel & transportation and apparel categories to be the least spend category. This is due to Covid-19 restricting flights or travel around the world and people are at home most of the time so they do not have to spend money on dressing themselves up. Page of 417Figure 4
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