Welcome to our latest blog on the current development and market update from the EU with a special focus on the Dutch tourism market. In this blog post, I will talk about what the tourism sector might look like in the months and what are the expectations in terms of business growth for the Hospitality & Tourism industry for the year 2021.

As we are based in the Netherlands, I have given more emphasis on the Dutch Travel & Tourism Market. All data has been derived from trusted sources like the UNWTO, NBTC, and many others. For a complete list of sources (with their links), please scroll down to the end of the blog. 

An overview of all Global regions

Covid-19 has left a devastating impact on global tourism and as per the latest trend report from the UNWTO, we see an 87% fall in international tourist arrivals as compared to the first quarter of 2020. The outlook for the rest of the year isn’t great either as many countries continue to have entry restrictions, test and quarantine on arrival and outright flight ban which further impacts movement of people and tourism globally.

Looking ahead: Outlook for 2021

About a major chunk of global destinations being completely closed to international tourists (approximately 32%) at the beginning of February, the UNWTO has painted a bleak picture for the next few months of 2021.

If current trends continue, UNWTO anticipates international tourist arrivals to be down about 85% in the first quarter of 2021 over the same period of 2019. This means a loss of around 260 million international arrivals when compared to the pre-pandemic levels. 

Looking ahead, UNWTO has outlined two scenarios for 2021, which consider a possible rebound in international travel in the second half of the year. These are based on a number of factors, most notably a major lifting of travel restrictions, the success of vaccination programmes or the introduction of harmonized protocols such as the Digital Green Certificate planned by the European Commission.

The first scenario points to a rebound in July, which would result in a 66% increase in international arrivals for the year 2021 compared to the historic lows of 2020. In this case, arrivals would still be 55% below the levels recorded in 2019. The second scenario considers a potential rebound in September, leading to a 22% increase in arrivals compared to last year. Still, this would be 67% below the levels of 2019. 

Expectations of inbound tourism in the Netherlands for 2021

Just as we witnessed globally, tourism in the Netherlands has also taken a major hit due to the Covid-19 pandemic. In the early half of 2020 (March-April), tourism abruptly came to a halt and some accommodations were seeing only around 5-10% occupancy rate. They were considered the fortunate ones to still have guests staying overnight. Many others weren’t that fortunate and had to completely shut down due to poor business. 

We also saw a short period during summer 2020 when business picked up although with dramatically low ADR and RevPAR and some businesses could cash in whatever they could. However, these summer months could not compensate for the enormous losses incurred during Spring and Fall. 

Despite the start of vaccinations, we know for a fact that tourism will be affected by the coronavirus in 2021. There is still a lot of uncertainty regarding tourism around the world, as many countries continue to be in lockdown or have some form of restrictions. Several international firms have come up with scenarios and forecasts which mention a rebound in tourism somewhere in the second half of 2021. Based on the current available information, the Netherlands Board of Tourism and Conventions (NBTC) along with the Centraal Bureau voor de Statistiek (CBS), have come up with a guidance and three-point scenario for 2021.

Scenario I:

1. Somewhere in the 2^nd quarter of 2021, the coronavirus situation in the Netherlands may improve
2. The risk level can be reduced and will continue to do so in the summer
3. However, in spring the first international tourists arrive in the Netherlands from our neighbouring countries.
4. From the third quarter (July) onwards travel within Europe is possible again

Scenario II:

1. The coronavirus is only pushed back by the summer in the 3^rd quarter.
2. Therefore, travel within Europe will start again from October. 
3. In this scenario, most Dutch will spend their summer holiday in the Netherlands.

Scenario III:

1. In this case, the coronavirus will continue to impact tourism all throughout 2021. 
2. There will be periods where some travel is possible but the virus is not controlled yet. 
3. As a result, subsequent travel restrictions and negative travel advise from governments can return at any moment. 
4. Tourism in 2021 will be similar to 2020.

The expectation of inbound tourism is positive for countries surrounding the Netherlands. Keeping an eye on the recovery pattern, we expect domestic tourism to first grow, followed by tourists arriving from Germany (our main market). This trend will be followed by incoming tourists from Belgium, France, and the United Kingdom. Lastly, other European markets are expected to recover followed by an influx of tourists from outside the EU. 

Key Takeaways

Based on the research it is clear that travel will no longer be the same at least for a sizable amount of time in the near future. Prospective travellers deciding on a destination will have to factor in many additional points before booking their trip. From a human perspective we know that everyone will crave to travel the moment restrictions are eased, however, the choice of destination will most likely be near home.

If you have read all the way until here, then below are a few key takeaways that indicate how travel will unfold this year in the Netherlands and in Europe:

1. Multiple stages of recovery: Domestic > Neighbouring countries (car) > Europe (airplane) > Intercontinental
2. Less capacity (hotels/ Airbnb) as a result of the 1.5meter rule
3. Destinations that offer a calm environment (allow to be in nature) will gain popularity
4. Health and safety will gain importance in traveling. People will prefer to avoid having to be quarantined at the destination or when arriving back home.
5. Business travel will recover much later. As a result, countries with a relatively big share of business tourism will have implications longer.
6. Restaurants and Catering establishments will open to a stronger start – business will be mainly driven by locals 
7. Revenge Tourism: People who are fed up with restrictions and are adventurous to go out
8. Depending on the ease of restrictions, hotels will start to see the business grow after 4-6 weeks of restaurants picking up (if the situation allows)
9. A significant proportion of trips will be funded by vouchers and credits (previously accrued in 2020).
10. This could potentially further stall the economic recovery of the travel industry.

If you would like to discuss further, perhaps give your inputs, please feel free to contact us directly. 

Links to Sources:

UNWTO, NBTC, CBS, UNSTATS, WEF, CELTH