Reading Time: 7 minutes

Will COVID-19 impact the future of travel in 2021?

  • Countries could make Coronavirus vaccines mandatory to resume international travel in 2021
  • UK requires all passengers entering the country to provide evidence of a negative COVID test
  • Greece calls for vaccination certificates to be introduced in the EU
  • Pound Sterling (GBP) exchange rates hit six-week lows

International travel has been burdened with uncertainty over the past year as countries across the globe have imposed travel bans, mandated quarantine periods and introduced travel corridors to prevent the coronavirus from spreading.

However, with COVID-19 vaccines being rolled out worldwide, it won’t be long before the aviation industry shakes off coronavirus headwinds and international travel resumes once more.

But what will the future of travel look like in 2021? Has the Covid pandemic reshaped the travel industry?

No country has made vaccination a legal requirement to travel as of yet. Still, Sharona Hoffman, co-director of the Law-Medicine Center at Case Western Reserve University School of Law, believes this could become the case once supply levels are no longer an issue.

However, Sharona Hoffman noted a significant number of people are reluctant to have a COVID-19 vaccine, which could severely affect countries who rely on tourism to boost their economy.

According to a recent survey published by Ipsos with the World Economic Forum, only 69% of Americans are willing to be vaccinated against COVID-19, a different picture when compared to residents of other countries.

The survey showed that 80% of Australian citizens are willing to receive a COVID-19 vaccine, followed by Mexico (77%), the UK (77%) and Australia (75%). However, residents in countries such as Russia and France are even less inclined to get vaccinated, at 43% and 40% respectively.

The International Air Transport Association (IATA) director-general and CEO Alexandre de Juniac has said that the travel sector could not afford to wait for vaccines to reopen borders.

World Travel and Tourism Council (WTTC) CEO Gloria Guevara is also against mandating vaccines for travel.

Ms Guevara made headlines after stating that imposing vaccine requirements for travel would be discriminatory and urged airlines and countries to support testing on departure.

Britons summer holiday plans

UK imposes fines for holiday abroad

With the future of travelling abroad still uncertain, the UK has recently stated that holidays abroad will become illegal from Monday 29th March 2021. Those travelling abroad without a valid reason will be subject to a GBP 5,0000 fine. The rule is set to remain in force until 30th June, though UK Health Secretary Matt Hancock has stated that holidays abroad could be allowed potentially before this date.

At the beginning of 2021, the UK government said all international travellers arriving in the UK after Monday 18 January at 4 am would need to provide proof of a pre-travel negative COVID test to enter the country.

Under-Secretary of State for Transport, Robert Courts, said the government had decided to mandate negative COVID tests to add another “layer of protection to safeguard public health.”

The rule applied to all travellers arriving into the UK, including those on the travel corridor list, except Northern Ireland, Scotland, Wales, Ireland, the Isle of Man, Jersey or Guernsey, Ascension, Falkland Islands and St Helena.

The UK’s travel corridors are currently suspended as the covid pandemic rages on, and governments worldwide report new clusters of the virus.

The UK’s testing rules introduced at the beginning of the year came alongside the launch of the controversial government-back vaccine passport trials. Reportedly, millions of Britons who have already received their vaccine jabs will be offered a “vaccine passport”, which will be issued via a free app created by biometrics firm iProov and cybersecurity company Mvine.

According to both firms, the vaccine passport will allow authorities to see how many vaccines a person has had and help the NHS keep track of the number of people receiving it.

Other nations also appear to be following the same line of thinking as Greece’s Prime Minister, Kyriakos Mitsotakis, is urging the European Commission to introduce COVID-19 “vaccination certificates” to facilitate travel across the EU.

COVID vaccine passports to be launched

Greece urges EU to introduce vaccination certificates

According to SchengenVisaInfo.com, Kyriakos Mitsotakis has asked European Commission President Ursula von der Leyen, to launch “vaccination certificates for those who have received their jabs against COVID” so that international travel can resume across the bloc.

The news came alongside an announcement from the country’s civil aviation authority, which extended restrictions on all international flights due to the recent uptick in COVID-19 cases.

According to the Embassy’s website, “Greece will only be allowing EU residents and travellers from specific non-EU countries such as Australia, New Zealand and the United Arab Emirates into the country.”

While the UK is also on the exemption list; arrivals will have to self-isolate for a week upon arrival and take a second test before being released from quarantine. If the test comes back positive, travellers will have to quarantine for a further seven days.

Spiralling coronavirus cases in the UK prompted other European countries to impose stricter measures against Britain earlier this year. Spain extended its travel ban against Britain until February due to reports of mutant strains spreading like wildfire across the country.

Despite Britain’s struggles, the UK remains a frontrunner in vaccine rollouts, investors continue to find UK assets and pound Sterling (GBP), with over 28 million people receiving the first dose of the vaccine. That being said, vaccine progressions no longer appear to be buoying the British pound (GBP), slipping against its major currency competitors this week.

Pound Sterling slips to six-week lows against euro

With the UK accelerating its vaccination programme, coronavirus cases in the country are declining and Brexit trade fears are fading, pound Sterling (GBP) was outperforming across the board, and was recognised as one of the best performing currencies in 2021.

The British pound to US dollar (GBP/USD) exchange rate is trading 0.25% lower during today’s session at USD 1.3719, with the US economic outlook becoming increasingly positive following US President Biden’s coronavirus stimulus plan.

The British pound to euro (GBP/EUR) exchange rate has hit six week lows, trading at EUR 1.1592, while the British pound to Japanese yen (GBP/JPY) exchange rate is 0.19% lower at JPY 149.088.

It was thought that pound Sterling (GBP) would gain traction last week after Bank of England (BoE) Governor Andrew Bailey suggested implementing negative interest rates was not likely to happen anytime soon, though there was little reaction from the British pound (GBP).

Like many financial professionals, most BoE policymakers believe that the UK could stage a strong recovery post-March due to the government’s army-led vaccination programme and reopening of the economy.