COVID-19 sparks a dramatic 37% fall in the sector’s contribution to GDP
More than 290,000 jobs lost, while many more remain protected by the expansion of the employment scheme
However, the return of international travel this year could see GDP contribution rise sharply and jobs return
London, UK: The World Travel & Tourism Council’s annual Economic Impact Report (EIR) today reveals the dramatic impact COVID-19 had on Japan’s Travel & Tourism sector, wiping out $138 billion from the nation’s economy.
The annual EIR from the World Travel & Tourism Council (WTTC), which represents the global Travel & Tourism private sector, shows the sector’s contribution to GDP dropped a staggering 37%.
The Travel & Tourism sector’s impact on the nation’s GDP fell from USD$ 373.0 billion (7.1%) in 2019, to USD$ 234.9 billion (4.7%), just 12 months later, in 2020.
The year of damaging travel restrictions which brought much of international travel to a grinding halt, resulted in the loss of 290,200 Travel & Tourism jobs across the country.
WTTC believes the true picture could have been significantly worse, if not for the government’s job retention scheme which offered a lifeline to thousands of businesses and workers.
The Japanese government also invested significant sums to help micro and small to medium-sized enterprises through subsidies, rent support grants and reduced-rate loan programs with interest-free unsecured financing support.
These job losses were felt across the entire Travel & Tourism ecosystem in the country, with SMEs, which make up eight out of 10 of all global businesses in the sector, particularly affected.
Furthermore, as one of the world’s most diverse sectors, the impact on women, youth and minorities was significant.
The number of those employed in the Japanese Travel & Tourism sector fell from more than 5.7 million in 2019, to 5.4 million in 2020, a drop of 5.1%.
However, due to government support measures such as the Employment Adjustment Subsidy in Japan, this figure was significantly lower than the global average fall of 18.5%.
The report also revealed domestic visitor spending declined by 30.3%, while international spending fared even worse due to more stringent travel restrictions, falling by 82.9%; markedly worse than the global average decline of almost 70%. Japan is also looking to introduce a digital health pass this summer, similar to the EU’s Digital Health Certificate. This new initiative is a positive step in the right direction and could significantly aid the restoration of international travel.
Virginia Messina, Senior Vice President and Acting CEO of WTTC said: “The loss of more than 290,000 Travel & Tourism jobs in Japan has had a significant socio-economic impact across the country, leaving huge numbers of people fearing for their future.
“WTTC believes it is critical for Japan to have a clear roadmap for the reopening of its borders and to begin relaxing travel restrictions to return these jobs to the economy. With the vaccination rollout advancing and cases continuing to decrease, there should be more flexibility for fully vaccinated travellers alongside a clear roadmap for increased mobility and a comprehensive testing scheme in place.
“Another year of terrible losses can be avoided if governments around the world support the swift resumption of international travel, which will be vital to powering the turnaround of the Japanese economy.
“Our research shows that if mobility and international travel resume by June this year, the sector’s contribution to global GDP could rise sharply in 2021, by 48.5%, year-on-year.”
As it will take a significant amount of time to vaccinate the global population, WTTC strongly believes that we should not discriminate against those who wish to travel but have not been vaccinated.
WTTC says the key to unlocking safe international travel can be achieved through a clear and science-based framework to include rapid testing before departure, as well as enhanced health and hygiene protocols, including mask wearing.
These measures will be the foundation to build the recovery of the many millions of jobs lost due to the pandemic.
It would also reduce the terrible social implications these losses have had on communities reliant on Travel & Tourism and upon ordinary people who have been isolated by COVID-19 restrictions.
Download the press release.