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Global tourism, related industries devastated by COVID-19 pandemic

Global tourism, related industries devastated by COVID-19 pandemic

The novel coronavirus (COVID-19) pandemic continues to adversely affect global tourism, catering, hotel, aviation, and entertainment industries as more and more countries close their borders to contain the virus.

According to a forecast from global trading firm eToro, the pandemic continues to cause a slowdown in the said businesses and that recovery can only be expected in the latter part of 2020.

One hard-hit country is Thailand which depends heavily on the billions of tourism dollars to fuel its economy.

Significant impacts

Toby Wu, senior analyst for eToro, noted that the catering, tourism, hotel, aviation, and entertainment sectors have been significantly impacted by the coronavirus pandemic in Q1 2020 and are “unlikely to recover until Q3 2020.”

But there seem to be indications that countries are making headway toward containing the virus and minimizing economic impacts.

Wu said the current situation in China has been “stabilizing thanks to the Chinese government’s strict measures to curb the virus.”

He added that the Chinese government “has implemented new monetary policy by providing low-interest debt to tech companies who are gaining significant market share over coronavirus in areas such as big data, cloud services, AI, sustainable energy and vaccine development.”

“These firms boost China’s supply chain and mean China is less dependent on the EU and US. The term ‘new infrastructure’ is being used to describe this new growth driver,” Wu said.

Less financial firepower

According to Wu’s analysis, comparatively, western economies have less financial firepower to minimize the impact of COVID-19 on their economies.

COVID-19 is the disease caused by the new coronavirus. Cases have been increasing and Europe is the most hard-hit. Europe is now considered the new epicenter of the virus.

Wu further said Europe and Japan are already in negative rates territory while the Fed has been cutting rates since 2019 and the effects of monetary policy are weakening.

“The most recent rate cut has shown limited impact to help avoid a market meltdown. The Fed appears to be losing its grip on interest rates,” Wu said.