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INLAND REVENUE

China gains and the US loses in a world with no foreign tourism

A commuter waits on a platform in Marseille train station with her suitcase.
Reuters/Jean-Paul Pelissier
Going nowhere.
By Natasha Frost
Published Last updated This article is more than 2 years old.

Long after “stay home” measures have been officially lifted, we probably won’t be straying too far from our own backyards.

This summer’s travel, if it happens, will be mostly local, or at the very least domestic, with Brits swapping Biarritz for Blackpool and intrepid US tourists switching out Uzbekistan for Utah.

But a huge boom in domestic travel won’t affect every country evenly. A report from Bernstein analyst Richard Clarke, which he cautions is more a “thought exercise” than a forecast, looks at which nations stand to benefit, or suffer, “if international travel demand was redirected domestically.”

Take Germany, for instance, with a domestic travel industry worth $265 billion. “Germans then spend $77 billion abroad (excluding the airfare to get there) and Germany gets $47 billion of inbound tourism spend. If we assume that the $77 billion is now spent in Germany but they lose the $47 billion inbound, then Germany’s total tourism market would grow 10%.” The same is true for other wealthy nations with globetrotting citizens, such as Canada, while tourism-dependent countries such as New Zealand or Portugal might struggle.

Of course, the summer’s travel is extremely unlikely to shake out in precisely this way. The many who have lost their jobs due to the pandemic probably won’t spend as much as they did in previous years; moreover, it’s still unclear whether any kind of domestic travel will be possible for the hardest-hit countries. The analysis also assumes that mainland Chinese tourists could not visit Macau or Hong Kong.

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