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06/22/2021

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Tourism is (very) slowly recovering. What does this mean for Poland, the world, and investment prospects?
Domestic tourism is slowly recovering, especially in the USA and China, but international tourism is returning to life decidedly more slowly. Experts indicate that an improvement is visible in the Polish tourism sector, but a return to pre-pandemic conditions will not be possible without a significant contribution from foreign tourists. Tourism is one of the largest global industries. Its cumulative turnover before the pandemic amounted to nine trillion dollars and accounted for over 10% of global GDP. The COVID-19 pandemic hit this sector with immense force, causing a nearly 50% drop in generated turnover last year. Currently, tourist traffic is slowly recovering, but a full recovery is still a distant prospect. Experts from the International Tourism Organization indicate that international tourism will not return to pre-pandemic normality before 2023. Domestic Tourism: A New Global Trend Paweł Majtkowski, an analyst at the eToro trading platform, points out that domestic tourism is recovering first, particularly in places where it has always been most popular, such as the United States or China. He adds that domestic tourism accounts for 70% of global tourism revenue, with international tourism making up the rest. Furthermore, leisure tourism accounts for 80% of the industry's revenue, while business tourism constitutes the remainder. The country where tourism has the largest share in GDP (15%) is Mexico. Spain (14%), Italy (13%), China (11.5%), and Turkey (11%) follow. In Poland, this share is very small (more on that shortly). The growing demand for tourism services is particularly evident in the United States, where American spending on airline tickets has increased over fivefold year-on-year. "In the US, there is a growing level of spending on travel. Current reports on American spending using credit cards show that spending on flights increased by 548% year-on-year, car rentals by 301%, and hotels by 277%. This is happening alongside a general increase in consumer spending of 36%," the eToro analyst enumerates. What About Poland? In Poland, tourism's share in GDP is around 4.5%. According to data from the World Travel & Tourism Council, this is the lowest percentage among a subjectively selected group of 35 European countries, which includes European Union member states, European Economic Area countries (excluding Liechtenstein), as well as Turkey, Serbia, Ukraine, Russia, and the United Kingdom. Analysts from the Polish Economic Institute, a public think tank, indicate that the partial recovery of Polish tourism, likely to be brought by the summer months, will be driven by the increasing number of vaccinated individuals and the relatively good financial condition of households. They expect an increase in the number of tourists compared to the previous year, but significantly lower than in 2019. "In the whole of 2020, the number of tourists using accommodation in Poland was 17.9 million, which means a 50% decrease compared to the previous year, when 35.7 million tourists used accommodation. In the coming year – assuming a 90% recovery in tourist traffic in July and August and a collapse in traffic during the autumn months – we can expect 20 million tourists," the PIE economists predict. The expected partial recovery of tourist traffic will be based mainly on domestic tourist traffic, as the return of foreign tourists will take until 2023.