Economic losses in tourism during the COVID-19 pandemic. The case of Sorrento

Abstract

ABSTRACT The tourism sector is facing its most severe crisis under the COVID-19 pandemic. Social distancing measures, global travel restrictions, stay-at-home orders, and other lockdown measures brought tourism to a halt in 2020. We estimate the potential economic losses thereof in terms of added value and number of tourists by nationality. By using the city of Sorrento as prominent and representative case study, we implement time-series analysis with autoregressive-integrated moving average models on monthly data from January 2013 to December 2019. We thus forecast the loss of tourists and added value in 2020. The results reveal that the pandemic has significantly affected the tourism sector, the added value of tourism in Sorrento might decrease by over 70%, and tourist arrivals might similarly fall or even reach zero foreign arrivals. The local government should reassess the sustainability of tourism proposals by factoring in the lack of tourist arrivals and focusing on loyal tourists and proximity tourists, two fundamental target audiences. Highlights We analyse the potential economic effect of COVID-19 on tourism in 2020 A forecast analysis estimates the changes in added value and number of tourists An ARIMA model is employed on monthly data COVID-19 might negatively and severely affect the tourism economy Foreign tourism risks attracting zero travellers in the post-pandemic period