COVID-19, TOURISM AND THE ECONOMY-EVIDENCE FROM PANDEMIC EPICENTERS OF EUROPE

ABSTRACT

The outburst of the COVID-19 pandemic put the world in quarantine, tourism being the most severely affected of all major economic sectors. The paper aims to capture the impact of COVID-19 shock on the tourism industry and economic progress using a dynamic distribution lag model. The data from 2001 to 2019 along with the epidemic shock are used to produce forecasts for Germany, France, Spain, and Italy until 2030. The results reveal that Germany's "smokeless industry" will fall by 6.9%, which puts 1.09 million jobs at risk. The declining trends will continue until 2023;however, they will match the current trends in 2024. Similarly, the expected losses for France, Spain, and Italy during 2020 are 9.63%, 9.35%, and 9.34%, respectively. The lockdown situation will shrink the real output and dampen GDP per capita. The highest per capita losses of 7.31% are recorded for Spain, while individual outputs in Germany, France, and Italy will fall by 6.55%, 6.73% and 7.2%, respectively. Thus, public-private cooperation is required for responsible tourism after the travel bans are lifted. The Governments should develop and communicate post-pandemic policies for the tourism value chain, go for smart lockdowns in order to protect jobs, and uplift the real outputs. © 2022, Institute for Economic Forecasting. All rights reserved.