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Impact of COVID-19 Pandemic on Tourism: Perceptions from Bangladesh

Article  in  SSRN Electronic Journal · January 2020

DOI: 10.2139/ssrn.3632798

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 Impact of COVID-19 Pandemic on Tourism: Perceptions from
Bangladesh

Santus Kumar Deb1*, Shohel Md. Nafi2

1
Departmemnt of Tourism and Hospitality Management , University of Dhaka, Dhaka-1000,
Bangladesh. santus@du.ac.bd
2
Departmemnt of Tourism and Hospitality Management, Noahkhali Science and Technology
University, Noahkhali, Bangladesh. sm_nafi@yahoo.com

Abstract
The purpose of this study was to discuss the effect of the COVID-19 pandemic on the
tourism industry in Bangladesh. This review utilized journals, historical records, newspaper
articles, World Health Organization statistics, governmental data, and website materials on
COVID-19 incidences in tourism. Secondary research was adopted in which secondary data
were collected through a comprehensive literature review. The COVID-19 outbreak has
significantly affected global travel and tourism. Bangladesh has also experienced an adverse
impact on inbound and outbound tourism. International and domestic tourists have cancelled
bookings in Bangladesh, and outbound tourism activities have also been banned. Airlines
have cancelled flights, while hotels are almost completely vacant, and as a result, supporting
tourism agencies are facing huge economic losses and employment cuts in Bangladesh. The
amplification of COVD-19 is predicted to cause a long-term adverse impact on tourism in
Bangladesh. The government of Bangladesh has declared an incentive package for early
economic recovery that is needed for businesses to survive the pandemic. This review
provides a theoretical cognitive model and literature on tourism for a better understanding of
the COVID-19 pandemic and may also guide future studies in addressing challenges for the
tourism industry.

Keywords Covid-19, Economic shock, Tourism, Pandemic, Bangladesh

Introduction
The speedy spread of novel coronavirus (COVID-19) has led to a substantial reduction in all
forms of economic activities in all over the world. The first case of COVID-19 was reported
in December 2019 in Wuhan China and spread in all over the world within March. World

Electronic copy available at: https://ssrn.com/abstract=3632798

Health Organization (WHO) declared this COVID-19 as a pandemic. This pandemic has
caused in massive shutdowns in all types of business activities and supply chain disruptions
causing global wave effects across all economic sectors that was never predictable. In
Bangladesh, the first COVID-19 case was confirmed on 8 March 2020. From a total
population of 164.64 million, Bangladesh reported 112,306 infection cases and 1464 deaths
(till 21 June 2020). The total number of COVID-19 cases in Bangladesh and around the
world shows in table 1.

Table 1: COVID-19 cases in the World and Bangladesh.

Date World Bangladesh
Total Cases Total Deaths Total Cases Total Deaths
February 14 67,100 1,526 0 0
March 14 156,520 5,841 5 0
April 14 196,9945 132,676 1,012 46
May 14 449,8702 303,447 18,863 283
June 14 801,4147 436,336 87,520 1,171
Source: Worldometers (2020); Corona Tracker (2020)

To reduce the spread of this pandemic, all countries have imposed lockdowns, restricted
domestic and international travel. Meanwhile, tourism is related to the human movement that
is adversely troubled by the travel restriction. Bangladesh's tourism industry has been
growing slowly with a vast domestic travel market. Because of travel restriction all types of
travel and tourism activities are remained closed from Mid-March of 2020. However, COVID-
19 has brought about a marked change in the lifestyle and economy of Bangladesh (Banna, 2020) as
the Bangladesh government has closed all forms of economic activity. Travel and tourism were two of
the first business sectors to be affected by COVID-19. Travel restrictions were imposed on all tourist
destinations. Hotel, motel, restaurant, and transport sector activities are mostly postponed due to the
country-wide lockdown. The airline industry has been considerably affected with the cancellation of
all domestic and international flights to and from Bangladesh. Therefore, the future of travel and
tourism industries in Bangladesh is currently unknown. This study will present an overview of the
COVID-19 pandemic and discusses the impacts on Bangladesh’s tourism industry and the
recovery strategy.

Electronic copy available at: https://ssrn.com/abstract=3632798

Method and materials
In this study, secondary research approach has been adopted. This study accomplished the
analysis by reviewing different articles, newspaper, World Tourism Organization (WTO)
data, World Health Organization (WHO) data etc.

Findings and Discusssion

COVID-19 and Tourism Industry in Bangladesh
Tourism is a way for most of the human movement in the modern world. According to WTO
(2020) the international tourism has showed continues growth for the 10th successive year
reporting 1.5 billion international tourist arrivals in 2019. It is projected to be reached by 1.8
billion international tourist by 2030. The tourism industry in Bangladesh is a growing
economic sector which is comprising 4.4 percent of total GDP in 2018 (World Bank, 2019).
The international tourism expenditure in Bangladesh was US$ 1208 million which is
relatively reasonable value among the South Asian countries. Figure 1 shows international
tourism expenditure in South Asian countries.

Figure 1: International Tourism Expenditure in South Asian Countries.

Tourism Expenditure (US$)

30000

25000

20000

15000

10000

5000

0
India Pakistan Sri Lanka Bangladesh Nepal Maldives Bhutan

Source: LightCastle Analytics Wing (2020).

The tourism sector of Bangladesh has been negatively impacted by the COVID-19 outbreak
since the beginning of March. The number of patients in Bangladesh with COVID-19 has
continually increased since the beginning of April. From the mid-March, local governments
of Bangladesh initiated strict embargos on visiting tourist spots. Hotel and motel owners were
asked to discourage tourists from residing in their establishments. Therefore, travel- and

Electronic copy available at: https://ssrn.com/abstract=3632798

tourism-related activities stagnated. Moreover, a multitude of domestic and international
flights were canceled, worsening the current economic situation. To prevent the spread of
COVID-19, all on-arrival visas for tourists from all countries were suspended.

From the beginning of the pandemic, China's temporary suspension of trading in response to
the COVID-19 outbreak will impact not only China's GDP, but also the global economy, as
China accounts for approximately 15% of global GDP and has trade ties with nearly all
countries worldwide. In terms of both goods and services, Bangladesh has an exceptional
trading relationship with China. Bangladesh has exported goods worth USD 861 million to
(2.2% of total exports) and imported goods worth USD 15.1 billion from (34% of total
imports) China. The tourism sector of Bangladesh may face a loss of Tk 60.00 billion from
January through December this year due to COVID-19 outbreak, as thise sector is was the
most affected by the pandemic. TOAB has reported that tour operators have lost close to Tk
15 billion as of April 2020, as well as cut 5000 jobs. However, losses of Tk 3.40 trillion were
reported followed by a ticket value of Tk 3.05 trillion, and losses of Tk 1.86 trillion and Tk
1.00 billion during the last three months were mostly from outbound tour operators (TOAB,
2020). In Bangladesh, about 4 million people are directly or indirectly worked in tourism and
travel sector. PATA (2020) estimated that about 0.3 million jobs in this sector are currently at
risk because of COVID-19. Figure 2 shows the estimated number of jobs at risk in tourism
sector.

Figure 2: Estimated Number Of Jobs At Risk In Tourism Sector.

Number of Jobs
160000
140000
120000
100000
80000
60000
40000
20000
0

Number of Jobs

Source: PATA Bangladesh Chapter (2020)

Electronic copy available at: https://ssrn.com/abstract=3632798

Tourism industry in Bangladesh has largely developed based on the major cities i.e. Dhaka,
Sylhet, Chittagong, Cox’s Bazar, Khulna are the major cities and tourism destinations in
Bangladesh along with other destinations. Moreover, Cox’s Bazar is known as the tourism
capital in Bangladesh. Most of the tourism infrastructure and superstructures are developed
on these cities and these cities largely contribute to the tourism economy. Both the inbound
and outbound tourism market has increased significantly in the last few years. International
inbound leisure travel trips tourists’ arrival in Bangladesh recorded 1.02 million tourists in
2017 and also recorded 0.83 million in 2016. Bangladeshi residents' outbound leisure trips
are projected to approximately 2.6 million trips by 2021, compared to the 2016 estimate of
2.3 million. The pandemic has an adverse effect on inbound tourism in and outbound
Bangladesh because of the coronavirus (Covid-19).

While the global impacts of the COVID-19 outbreak persist, both the hotel/motel and tourism
industries have been badly affected in Bangladesh. Due to fear over a large-scale COVID-19
outbreak, many overseas tourists have canceled their hotel bookings, resulting in significant
financial losses for the hotel and tourism industries due to the lack of tourists, particularly in
Dhaka, Cox's Bazar, Sylhet, Chittagong and the other part of the country. According to The
New Nation (2020), hotels were previously 80% booked by expatriates and tourists from
Bangladesh and abroad.

The IATA projects that global air transport revenue will be abridged by 11% in 2020, which
means a loss of US$163 billion dollars (IATA, 2020). More than two million flights have
been canceled until 30 June, 2020. Approximately 65.5 million jobs are associated with the
aviation sector, and the IATA (2020) forecasts that approximately 25 million aviation-related
jobs are at risk globally. Figure 3 shows the change in occupancy level of luxury hotels in
Bangladesh due to COVID-19.

Electronic copy available at: https://ssrn.com/abstract=3632798

Figure 3: Occupancy Level of Luxury Hotels in Bangladesh

100
90
80
70
60
50
40
30
20
10
0
Amari Dhaka Dhaka Regency Inter Continental Pan Pacific Radission Blu Le Meridien
Hotel Dhaka Sonargaon Chattogram Dhaka

Occupancy level before COVID-19 (%) Occupancy level after COVID-19 (%)

Source: LightCastle Analytics Wing (2020)

The global airline industry of Bangladesh has suffered huge losses due to the COVID-19 pandemic.
Concurring to the International Air Transport Association (IATA), revenue losses could reach USD
252,000,000 for airlines this year compared with the earlier $113,000,000 estimates, due to the
COVID-19 Outbreak.

The global outbreak of COVID-19 has greatly affected airlines in Bangladesh. The global
travel ban directly affected the airlines and placed operators under extreme financial pressure.
Global travel restrictions have a direct impact on the airline industry and create extreme
pressure on financial conditions. Hossain (2020) identified that Biman Bangladesh Airlines,
the national flagship airline carrier of Bangladesh, experienced a loss of USD 30 million from
January to March 2020. This figure will be two to three times when including other domestic
airlines. Biman Bangladesh airlines have implemented some initiatives to reduce their losses,
including a 10% reduction of basic salaries for employees, the suspension of overtime pay,
and the reduction of all extra allowances. Biman representatives have stated that Taka 270
crore had been from was lost between February to March this year (Hossain, 2020).

Building Readiness for a Post-COVID-19 Bangladesh

WTO has revised 2020 forecasts for international tourist arrival to a negative growth of 1
percent to 3 percent and US$ 30 to US$ 50 billion loss in international tourist receipts.
However, WTO projected a positive growth of 3 to 4 percent for this year. The global

Electronic copy available at: https://ssrn.com/abstract=3632798

shutdown has clogged the global tourism activities. However, Bangladesh tourism industry
largely depends on domestic tourists. About 10 million domestic tourists travel every year
and the turnover is around 250 billion a year. The international tourist arrival is also growing
at a gradual rate. But all types of tourist activities are stopped due to COVID-19 situation.
Hundreds of travel and Tour Companies will close, a significant number of small hotels,
motels, resorts, restaurants will shut down, thousands of people will be jobless just after
COVID -19 effect. Table 2 shows the forecasted data of the first six months of the tourism
industry.

Table 2: Forecasted Effect of COVID-19 on the Tourism Industry

No. Sectors Total Taka in Total Jobless

crores (till June (till June
2020) 2020)
01 Aviation: Private airlines 600 2,000
02 Hotels/Resorts/Inns (2*- 5*) 1500 1,00,000
03 Travel Agents 3000 15,000
04 Tour Operators:
Inbound: 100 1,000
Outbound: ( Land packages only) 2500 15,000
Domestic: 1000 20,000
UMRAH (Land packages only) 450 5,000
05 Restaurants, coffee shop, first food, BAR and 500 1,50,000
others.
06 Transportations directly involve in Tourism:
Vehicles using for tourism (Car/Micro/Mini coach) 40 1,000
Tourist Vessels: 15 500
07 Total turnover in word Tk. Nine Hundred Seventy Tk. 9,705 crores 3,09,500
One point Five billion
Source: PATA Bangladesh Chapter (2020)

To overcome this situation, all the public and private sectors company should act closely to
fight with the COVID-19 situation. Bangladesh should look forward to struggling this combat
with cooperative efforts from the public and private sectors. In this situation, rebuilding
confidence among public and private sectors are vital for the recovery. While designing any
special stimulus packages, industries should be ranked as their economic vulnerability. The
government of Bangladesh has already declared a stimulus package for various industries but

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the effectiveness of the package for tourism industry is questionable. Moreover, policymakers
of Bangladesh should introduce an inclusive package to ensure the post COVID-19 recovery
and sustainability of the tourism business.

Conclusion

This study provides a brief background of the COVID-19 outbreak and examines the impact
of this pandemic in the Bangladesh tourism industry. In the early assessment, it is clear that
COVID-19 adversely impact on the travel and tourism industry. Both domestic and
international tourists cancelled their bookings due to the pandemic. However, travel
restriction in different countries has led to the cancellation of all air travels. For that reason,
businesses are losing their revenue, and employees are losing their jobs. In this situation,
special stimulus package from the government is necessary for the travel and tourism
industry to survive the current situation and revive after the pandemic.

References

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Available at: https://tbsnews.net/thoughts/minimising-economic-impact-coronavirus-
bangladesh-56449 (viewed 11 April 2020).

Corona Tracker (2020). Bangladesh COVID-19 Ttacker.

https://www.coronatracker.com/country/bangladesh/. (viewed 12 June 2020).

Hossain, S. (2020). “COVID-19 forces crash-landing” Available at:

http://www.theindependentbd.com/post/242818 (viewed 10 April 2020).

IATA (2020). “IATA Updates COVID-19 Financial Impacts -Relief Measures Needed.”
Available at: https://www.iata.org/en/pressroom/pr/2020-03-05-01/ (viewed 05 April 2020).

IATA (2020). “Remarks of Alexandre de Juniac at the IATA Media Briefing on COVID-19, 7
April 2020.” Available at: https://www.iata.org/en/pressroom/speeches/2020-04-07-01/
(viewed 08 April 2020).

LightCastle Analytics Wing (2020). COVID-19 & Tourism: A Tragic End to the Thriving
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thriving-industry-
11643?fbclid=IwAR38rssRnAsJj34OSmZmtpZQDXk72FpAEV3ZL_bm7QdAceKRgdGNm
ML9hMQ. (viewed 10 June 2020).

Electronic copy available at: https://ssrn.com/abstract=3632798

New Nation (2020). Coronavirus impact hits Cox's Bazar tourism business. Available at:
http://thedailynewnation.com/news/250486/coronavirus-impact-hits-coxs-bazar-tourism-
business.html. (viewed 10 June 2020).

PATA Bangladesh Chapter (2020). PATA Bangladesh Chapter: COVID-19 impact on the
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(viewed 1o June 2020).

TOAB (2020), “Impacts on Bangladesh Tourism and TOAB due to COVID-19” Available at:
https://m.theindependentbd.com/online/travel-tourism (viewed 04 May 2020).

World Tourism Organization (2020). “World Tourism Barometer.” Volume 18, Issue 1.
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01/UNWTO_Barom20_01_January_excerpt_0.pdf (viewed 10 April 2020).

World Tourism Organization (2020). “International tourist arrivals could fall by 20-30% in
2020. Available at: https://www.unwto.org/news/international-tourism-arrivals-could-fall-in-
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https://www.worldometers.info/coronavirus/?utm_campaign=homeAdvegas1?. (viewed 12
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