Highlights

Abstract

Keywords

Introduction

Review of previous studies

Tourism before and after outbreak of COVID-19

Modelling the economic impact of COVID-19

Direct impacts of COVID-19 from the international tourism market

Economy-wide impacts of the international tourism market

Conclusions

Declaration of competing interest

References

Vitae

Abstract

The pandemic COVID-19 has severely impacted upon the world economy, devastating the tourism industry globally. This paper estimates the short-run economic impacts of the inbound tourism industry on the Australian economy during the pandemic. The analysis covers effects both at the macroeconomic as well as at the industry and occupation level, from direct contribution (using tourism satellite accounts) to economy-wide effects (using the computable general equilibrium modelling technique). Findings show that the pandemic affects a range of industries and occupations that are beyond the tourism sector. The paper calls for strong support from the government on tourism as the recovery of tourism can deliver spillover benefits for other sectors and across the whole spectrum of occupations in the labour market.

Introduction

Tourism has for some decades experienced rapid growth worldwide, serving as an important source of export income for many countries, accounting for around 10% of global GDP (World Travel and Tourism Council, 2020). Tourism becomes the main driver of growth in many countries and regions. With a strong social interaction nature, the industry is prone to recession, terrorism, natural disasters and infectious diseases. The outbreak of the coronavirus disease in late 2019 (hereafter, COVID-19) has severely and rapidly impacted human life on a global scale with respiratory illness that has effected more than 67 million infected cases and more than one and half million of deaths at the time of writing, an unprecedented crisis. Governments across the globe have taken wartime-like actions to curtail the spread of the illness and deaths by imposing strong restrictions on travel, social gathering and social distancing regulations. The social distancing measures constrain both the demand and supply sides of tourism services, causing significant flow-on effects throughout affected countries (OECD, 2020a, 2020b) with large reductions in employment and losses to household income. Even if a vaccine is available soon, with demand side recovery aided by progressive lifting of travel and social distancing restrictions, tourism supply chains may take years to adjust to the new circumstances of the travel experience (Gössling et al., 2020)