Published on : Friday, November 27, 2020
US pharmaceutical giant Pfizer and German biotechnology company BioNTech announced on November 9, a jointly developed vaccine candidate was effective at preventing more than 90% of test subjects from contracting Covid-19, according to results from the third stage of testing. Two weeks later, additional testing suggested that the efficacy rate was in fact better than initially expected, at 95 per cent.
This news has raised hopes of a quick recovery from both the health-related challenges and the economic impacts of the pandemic.
The companies said they were hopeful of securing authorization to sell and distribute the vaccine – initially in the US – before the end of the month. They projected that they could produce up to 50m doses of the vaccine before the end of the year and an additional 1.3bn in 2021.
In particular, an effective vaccine is expected to be a significant boon for tourism, which has been badly affected by border closures, travel restrictions, and social distancing measures related to Covid-19.
Although the situation eased somewhat in developed markets during the middle of the year, many parts of the world are now experiencing a second spike in coronavirus cases, leading to further restrictions.
Demonstrating the extent of the impact on global travel flows, the Organisation for Economic Cooperation and Development has predicted that the international tourism economy will shrink by 80 per cent this year.
This contraction has had a significant impact on those emerging markets that draw a sizeable portion of their GDP from tourism. For example, last year tourism accounted for 11 per cent of GDP in Thailand, nine per cent in the Philippines, eight per cent% in Morocco, and seven per cent in Tunisia.
At present, it is expected to take a number of years before tourism completely recovers: consultancy McKinsey estimates that global tourism revenue will not return to 2019 levels until either 2023 or 2024.
However, with a vaccine allowing for greater movement and trade, some officials hope that it will lead to a quicker-than-expected rebound in tourism activity.
Some have pointed to China as an example of a rapid recovery: since the country managed to control infection rates, air traffic has returned to 90% of pre-pandemic levels.
While a vaccine will be key to any resumption in mass tourism, Aileen Clemente, the chairman and president of Philippine firm Rajah Travel Corporation, says that other measures will also be crucial to recovery.
“I believe that the main priority of the tourism industry is to get people travelling again safely by giving governments confidence that systematic Covid-19 testing and contact tracing are possible and reliable prior to having a vaccine programme,” she told OBG.
“As we all know, the vaccine programme will take a while to roll out to all parts of the world, so pre- and post-vaccine programmes should be concurrently available.”
One factor that could complicate any recovery is the potential difficulty associated with safely transporting vaccines.
To work effectively, Pfizer and BioNTech’s candidate must be stored at an ultra-low temperature of around -80°C. Moderna’s can be kept in a normal freezer, while researchers from the University of Oxford say that their vaccine can be stored in a refrigerator.
Aside from transportation, there are questions about whether the social and economic fallout of the crisis may further delay the recovery of the tourism industry.
“Even with the release of a vaccine, in the short to medium term people will be very cautious about leisure travel,” said Thurane Aung, CEO of Myanmar conglomerate Dagon International. “Also, due to the reduction in disposable income, we do not expect tourism to pick up as fast as business travel.”
In addition to the fiscal constraints on households, some tourism-related companies may find it difficult to return to business after spending much of 2020 either closed or operating severely below capacity.
“The tourism industry in Myanmar is particularly linked to the government sector,” Thurane Aung said. “Even in the hypothetical situation where the virus was under control in the region – thanks to the distribution of a vaccine – the sector would not recover without the government’s support.”