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#TourismPostCOVID19 | Responsible Tourism

22-05-2020

COVID-19 and the prospects for the radical transformation of tourism

Raoul Valerio Bianchi

Despite advances in the argument for a transformation of tourism brought about by the pandemic crisis, there is a need for a more robust, multi-scale policy of intervention to challenge the power of tourism capital.


Photography by: Harare, Zimbabwe. ILO.

Following the outbreak of the Covid-19 pandemic all tourist destinations worldwide have imposed travel restrictions while 45 per cent are partially or fully closed. Despite experience of previous disruptions, whether caused by terrorism, financial crises or indeed previous pandemics, few could have predicted the scope and severity of the impact Covid-19 has had on societies and economies worldwide.  Such is the belief in tourism’s resilience that in late January the UNWTO was predicting 3 to 4 per cent growth in tourism for 2020 while the Secretary-General stressed that “in these times of uncertainty and volatility, tourism remains a reliable economic sector”. 

The pandemic has not only highlighted the magnitude and scope of tourism’s global economic importance. It has underscored the manner in which the interconnected global architecture of tourism and associated flows of mobility act as a vector for the transmission of such pathogens, nowhere more so than on densely-crowded cruise ships that act as floating petri-dishes of incubation. The UNWTO forecasts that international arrivals could fall by 20 to 30 per cent relative to 2019 while revenues will decline by US$350-400 billion. The OECD forecasts a 45 per cent decline in international tourism in 2020 rising to 70 per cent if the recovery is delayed until September.

That this constitutes a profound crisis and major turning point for global tourism is beyond doubt. It nevertheless remains vital that we resist calls to simply ‘aid’ the recovery of the industry, and to challenge interpretations of the crisis as a mere “bump in the road”. While it is too early for a comprehensive analysis of the pandemic’s repercussions for the political-economic structure of tourism going forward, many are optimistic that the abrupt collapse of tourism will enable destinations to take stock and to challenge the current growth trajectory of tourism and align it with the social and ecological limits. Certain destinations have already begun to rethink how to rebuild their tourism sectors in line with sustainability goals. For some, such as Hawaii, this involves limiting visitor numbers and redirecting marketing towards smaller groups of higher-paying tourists seeking cultural and natural experiences. Amsterdam meanwhile has embraced Raworth’s regenerative model of doughnut economics in order to realign the urban economy with social and environmental goals. 

However, many of the responses thus far fail to consider the political logics of the impending struggles to shape the structural and organisational contours of the global tourism industries following the unprecedented shock brought about by the Covid-19 pandemic. This reflection will consider some of the challenges for a radical, transformative break with growth-led, corporate-managed, resource-intensive models of tourism development, in the light of the current and emerging political-economic configurations of tourism.

The great disruption and emerging corporate landscapes of tourism 

Despite signs of progress a systemic paradigm shift towards more sustainable and equitable forms of tourism remains inconsistent and hindered by the relentless pursuit of growth and tourism’s integral role in the continuous expansion of capitalism, a fact recognised even by many in the mainstream media. Prior to the outbreak of the pandemic, sustainable tourism dialogues had begun to pivot around the UNWTO’s 2015-2030 sustainable tourism development agenda - framed by the 17 United Nations Sustainable Development Goals (SDGs) -  the central premise of which is that the transition to inclusive and sustainable tourism can be engineered through the managed growth of tourism. Despite having acknowledged the problems associated with over-tourism the UNWTO has renewed its commitment to “sustainable growth” in response to the pandemic.

That said, the pandemic has hastened the decline of the neoliberal economic orthodoxies that have fuelled three decades of hyper-globalisation and market-led growth, as states have stepped in to prevent the collapse of businesses and mitigate the effects of spiralling unemployment. As a result of the suspension of travel and related ‘lockdowns’ the WTTC has forecast an unprecedented loss of 100 million tourism jobs worldwide together alongside a 30 per cent decrease (US$2.7 billion) in tourism’s contribution to global GDP.  Further to the immediate cost in terms of bankruptcies, unemployment and lost livelihoods the precise structure and power coordinates of the global political economy of tourism that will emerge in the pandemic’s wake is difficult to predict. This fact is further complicated by the hybrid and composite nature of the tourism ‘industries’ characterised as they are by manifold inter-connections between firms of different size and capitals organised across globally-differentiated regions in an unequal division of tourism labour

The pandemic has also laid bare vulnerabilities where tourism comprises higher than average proportions of GDP and employment, not least in Spain and Italy, in many ways the European epicentres of the pandemic. Even when travel restarts, domestic markets cannot easily compensate for lost international demand, although an increased emphasis on domestic tourism is likely in the short-term. Tourism supply is by its very nature perishable, nor can tourism and hospitality infrastructures be easily repurposed for alternative economic usage. An exception perhaps are hotel real estate assetsthat can potentially be sold to release liquidity, although commercial real estate activity has also slowed considerably

It is estimated that global hotel supply will contract by 2 per cent. While most corporate hotel groups are likely to survive thanks to a combination of state aid and private financing, the many thousands of small to medium sized firms which make up around 80 per cent of global tourism struggle to access emergency government assistance. Despite sizeable cash reserves and access to finance many of the corporate digital platforms which had been driving significant market concentration in recent years have announced major restructuring plans and job losses, although it is likely that some will consolidate and expand their market position. 

The crisis has also laid bare the tensions between the interests of global capital and transnational corporations on the one hand and those of states on the other. Companies that have consistently preached the virtues of low tax-regulatory regimes are now amongst the most fervent proponents of state aid, not least the airline industry which may face global revenue losses of US$250 billion and a permanent loss of 750,000 jobs in the US alone. Aggressive lobbying has enabled airlines to secure vital state aid to stay afloat. While there is a clear rationale and urgent need to provide support for laid-off workers in industries that employs tens of millions of workers, cheap air travel has been a major contributor to the relentless growth of tourism and carbon emissions.  

Most governments have stopped short of taking airlines into public ownership, with the exception of Alitalia. Rather than simply bail out this sector the crisis provides an opportunity for states to orchestrate a transition to sustainable transport systems aligned with improved working conditions and binding emissions targets. Indeed, Air France-KLM has been granted a combined French-Dutch state aid package of around  €10 billion in return for a commitment to halve emissions by 2030 and suspend dividend payments. US airlines in contrast have merely been encouraged to “refrain” from using bailout money for share buy backs or dividend payments until September 2021, and to limit executive pay until late March 2022.  Although it too is a major employer the ‘US’ cruise industry – in which three companies account for 75 per cent of the global cruise market – was nevertheless excluded from the US$500 billion corporate bail-out fund by virtue of the fact that they have worked to systematically minimize their tax liabilities and circumvent strict labour and environmental standards by sailing under overseas ‘flags of convenience’. 

There are signs too that the pandemic may hasten geo-political and economic power shifts that were already apparent prior to the outbreak. While weaker states may suffer as foreign investment moves out of emerging markets, Chinese investors had already been busily acquiring Western tourism, hotel and property assets prior to the pandemic, including such iconic European tourism brands as Club Mediterranée and Thomas Cook. Thanks to sizeable foreign currency reserves and demand for domestic travel, well-capitalized state-backed Chinese enterprises are well placed to withstand the economic fallout and to step up investments into major tourism, hospitality, aviation and real estate assets

Those most severely impacted by the pandemic are the millions of vulnerable workers and small enterprises in small islands and other low-income tourism destinations across the Global South. Without international financial assistance these states will be hard pressed to keep local tourism businesses afloat and furlough workers and are likely see their public debt burdens rise. A major proportion of global tourism and hospitality workers comprise women and/or migrants often working in the informal sector with little or no recourse to state support and social protection. Notwithstanding greater access to state support, tourism and hospitality workers in wealthy states too have not been spared. In the US 98 per cent of Unite Here trade union members have lost their jobs while trades unions in Europe estimate that almost the entire 12m strong hospitality workforce has either been furloughed, or been made redundant. Meanwhile a significant number of low-paid cruise ship workers, many of whom hail from developing countries, remain stranded at sea and unable to return home.  

Towards democratic, equitable and sustainable tourism?

In her critically acclaimed analysis of “disaster capitalism” The Shock DoctrineNaomi Klein cites noted free market thinker Milton Friedman to underscore how crises serve to catalyse sharp transitions towards new political-economic orders:

“Only a crisis – actual or perceived – produces real change. When that crisis occurs, the actions that are taken depend on the ideas lying around”.  

The Covid19 pandemic has all the attributes of just such a crisis but whose repercussions are global in scale and of potentially greater severity than the 1930s depression. Much has been made of the fact that the pandemic has given us time to take breath and to rebuild tourism economies along more sustainable and regenerative principles. However, the restructuring of post-pandemic tourism economies will entail much more than appeals to morality or simply for tourism to “grow back better” as proposed by the UNWTO. 

To paraphrase climate activist Bill McKibben, progressive voices in tourism may have begun to win the argument but we are far from winning the struggle to catalyse the transformation towards a just, sustainable and democratically-managed tourism political economy.  Further to the challenges posed by the complex structure and organisation of the tourism ‘industries’, without a coordinated transnational programme of action to neutralize the grip of markets and capital on tourism governance, it will be hard for states to resist commercial pressures to restore growth and profitability and to push back against corporate lobbying demanding the loosening of fiscal ‘burdens’ and "restrictive" social and environmental regulations.

Progress is also hindered by the lack of an agreed consensus regarding the precise form equitable and sustainable post-pandemic models of tourism might take.  hese range from scattered micro-alternatives to mass tourism, modest innovations and market remedies to more radical proposals for degrowth. What many proposed solutions have in common is a disconnection from political economyand the invisibility of the contested class relations that shape and determine distributive outcomes and which are often concealed in pluralist framings of tourism political economy. The danger is that technocratic and possibly authoritarian recovery strategies will be by delivered governments and corporations merely in consultation with ‘stakeholders’. The expertise of digital tech companies may also be harnessed by states to deploy data analytics and ‘smart’ technologies for the management of tourist mobility and border crossings in the interests of ‘public safety’. Such responses promote technical solutions abstracted from politics. As such they risk accentuating an expanding architecture of corporate-managed surveillance capitalism that undermines principles and structures of democratic participation

The precise pathways to recovery and transformation will vary according to the structure and organisation of tourism in local contexts and the changing tectonics of global macro-economic forces.  The emerging landscapes of global tourism capitalism will nevertheless present considerable challenges for any kind of coordinated response from labour and civil society as renewed struggles over strategically located ‘tourism assets’ intensify.  

There have been promising proposals ranging from localizing destination value-chains  to fostering the inclusion of women in decision-making. However, a more radical shift to an equitable-green model of tourism will require a multi-scalar and robust politics of intervention that can challenge the nexus of commercial-financial-political interests who have abetted the relentless growth of tourism and expansion of capital accumulation through land grabs, privatizations, regulatory liberalization and real estate-driven strategies of tourism development. The resurgence of states as critical economic actors nevertheless provides a vital opportunity to decouple tourism development decision-making from speculative capital flows and short-term profiteering and, looking further ahead, to widen and deepen democratic-civic participation in the management and socialisation of the assets and resources upon which tourism and associated human livelihoods depend.

 

Raoul Bianchi is reader in International Tourism and Development, University of East London.

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