OPINION – Social costs of tourism amid COVID-19 pandemic

Richard Qiu and Sílvia de Almeida

Department of Integrated Resort and Tourism Management

Faculty of Business Administration, University of Macau

The novel coronavirus disease 2019 (COVID-19) pandemic has brought upon severe impact across the world at an alarming rate. It is suggested that tourism and mobility are antecedents to further emergence or re-emergence of infectious diseases. Due to this, the consequences of the pandemic are particularly grave for tourism destinations, as travel restrictions and border shutdowns are adopted worldwide.

It is well acknowledged that tourism has direct, indirect and induced impacts on a destination, from both economic and social viewpoints. Many scientific and market researches have mainly focused on the economic benefits that tourism can bring about, while the societal impacts arising from tourism on the local residents are somewhat under-researched. Prof Richard Qiu from the University of Macau and his collaborators from Hong Kong and mainland China have looked into the issue and investigated the social cost of tourism activities during a pandemic in the eyes of local residents. The authors explored the premise that a crisis could actually moderate the residents’ negative perceptions of tourism. In essence, the study predicted that the social costs borne by the residents, such as public safety, would outweigh the economic benefits of tourism; and ultimately measuring the willingness of the residents in sacrificing such economic benefits for the sake of minimizing the possible social costs during the pandemic. The empirical results suggest that each resident would sacrifice an average of (HK$/CN¥) 200 to mitigate the potential risk of tourism activities amid the pandemic, which leads to an estimated summations of social costs of CN¥825 million, CN¥1417 million, and CN¥1215 million in Hong Kong, Guangzhou, and Wuhan, respectively.

From a different perspective, the above estimations also reflect the potential benefit of travel restriction to a tourist destination. At the same time of reducing volume of tourist arrivals and tourist receipts, strict travel restrictions and border control policies also keep the city safe from the pandemic. According to the opinion of the local residents, as one of the core stakeholders in the city, suggested that a premium could be paid to limit tourism activities and therefore virus transmission. It is demonstrated that the majority of the respondents were much more willing to pay for risk deduction and it is suggested charities could benefit by setting specific funds for the purpose of risk reduction. Looking back at Macao’s situation in the past year, and comparing it with our neighbors, we can proudly say that the strict border control policies adopted by the Macao SAR government at an early point in time, have minimized the social cost of tourism activities in terms of virus transmission. Similar findings are suggested by the scholars from Europe, where they find that the travel bans in the EU region could have potentially saved more than one million people from the infection of COVID-19 and tens of thousands of lives from death.

Looking forward, the on-going pandemic at the global level would cause increasing damage, especially affecting small and medium enterprises. The government will have no choice but to balance between safety (by strict border control) and economic benefits (by opening up to tourists). On this note, the recent policies by the Macao SAR government that stimulate domestic tourism and accept “safer” tourists from mainland China have definitely ease the case and effectively push the situation towards a more optimistic scenario. These stimulus measures can be applied to help out against the social costs suffered during the pandemic, especially to the communities that are mostly affected by the pandemic. We can already see in the case of mainland China, where the tourism industry has picked up some momentum within the region, in which local tourists have been slowly traveling domestically to various destinations. In addition, there is an increased need to adopt an innovative and holistic approach when planning the recovery at tourist destinations. Hence, the government should focus on all sectors in society, which would prompt a more well-balanced recovery.

Another interesting finding of Prof Qiu’s study was that the residents’ willingness to pay were significantly affected by age, income and tourism employment. A specific understanding of the situation was that young residents were actually more willing to pay for reducing risks. The reason behind this is the fact that younger people are more likely to be connected to the internet and are more digitally savvy, which as a result permits them to have access to the most updated information about the pandemic in real time. Therefore, local authorities as well as tourism organizations could better benefit from the influence of younger generations in order to cope with and recover from crises such as the current pandemic and rebuild for a better future as the younger generation tends to be more knowledgeable and motivated.

This article is based on: Qiu, R.T.R., Park, J., Li, S.N., & Song, H. (2020). Social costs of tourism amid COVID-19 pandemic, Annals of Tourism Research, 84, 102994, DOI:10.1016/j.annals.2020.102994.