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Global Economy May Lose $4trn Due to COVID-19 Impact on Tourism – UN

UN Conference on Trade and Development (UNCTAD) said the global economy could lose four trillion dollars due to the impact of the Coronavirus (COVID-19) on international tourism.

UNCTAD in a report jointly issued with the UN World Tourism Organisation (UNWTO), stated that the estimate was based on losses caused by the pandemic’s direct impact on tourism and the ripple effect on related sectors.

It said the outlook ”is worse than previously expected.”

In July 2020, UNCTAD estimated that the standstill in international tourism would cost the global economy between 1.2 trillion dollars and 3.3 trillion dollars.

The steep drop in tourist arrivals worldwide in 2020 resulted in a 2.4 trillion dollars economic hit, the report said, and a similar figure is expected this year depending on the uptake in COVID-19 vaccines.

“The world needs a global vaccination effort that will protect workers, mitigate adverse social effects and make strategic decisions regarding tourism, taking potential structural changes into account,” said Isabelle Durant, the UNCTAD acting Secretary-General.

“Tourism is a lifeline for millions, and advancing vaccination to protect communities and support tourism’s safe restart is critical to the recovery of jobs and generation of much-needed resources.

“Recovery of jobs and generation of much-needed resources, especially in developing countries, many of which are highly dependent on international tourism,” the UNWTO Secretary-General Zurab Pololikashvili said.

According to the report, international tourist arrivals declined by about one billion (or 73 per cent) in 2020 while in the first quarter of 2021 the drop hovered around 88 per cent.

The report indicated that developing countries had borne the brunt of the pandemic’s impact on tourism, with estimated reductions in arrivals of between 60 per cent and 80 per cent.

They have also been hurt by vaccine inequity.

The agencies said the “asymmetric roll-out” of COVID-19 vaccines had magnified the economic blow to the tourism sector in the countries mentioned as they could account for up to 60 per cent of global GDP losses.

It is expected that tourism will recover faster in countries with high vaccination rates.

Such countries include France, Germany, the United Kingdom, and the United States.

However, international tourist arrivals will not return to pre-pandemic levels until 2023 or later, due to barriers such as travel restrictions, slow containment of the virus, low traveller confidence and a poor economic environment.

While a tourism rebound is anticipated in the second half of the year, the agencies anticipate a loss of between 1.7 trillion dollars and 2.4 trillion dollars in 2021 based on simulations which exclude stimulation programmes and similar policies.

The authors outline three possible scenarios for the tourism sector in 2020, with the most pessimistic reflecting a 75 per cent reduction in international arrivals.

This scenario sees a drop in global tourist receipts of nearly 950 billion dollars, which would cause a loss in real GDP of 2.4 trillion dollars, while the second reflects a 63 per cent reduction in international tourist arrivals.

The third considers varying rates of domestic and regional tourism.

It assumes a 75 per cent reduction in tourism in countries where vaccine rates are low, and 37 per cent reduction in countries with relatively high vaccination levels, mainly developed countries and some smaller economies. (NAN)

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