Collapse of international tourism due to pandemic ‘could cost $4 trillion’

The collapse of international tourism due to the pandemic could cause a loss of more than $4 trillion to the global GDP for 2020 and 2021, a new report warns.

The estimated loss has been caused by the direct impact of Covid-19 on tourism and its ripple effect on other associated sectors.

The study, jointly presented with the UN World Tourism Organisation (UNWTO) today (Wednesday), says international tourism and its closely linked sectors suffered an estimated loss of $2.4 trillion in 2020 due to direct and indirect impacts of a steep drop in international tourist arrivals.

It warns that similar loss may occur this year, with the tourism sector’s recovery largely dependent on the uptake of Covid-19 vaccines globally.

The tourism sector is expected to recover faster in countries with high vaccination rates, such as France, Germany, Switzerland, the UK and the US, the report says.

But experts do not expect a return to pre-Covid-19 international tourist arrival levels until 2023 or later, according to UNWTO.

The main barriers are travel restrictions, slow containment of the virus, low traveller confidence and a poor economic environment.

A rebound in international tourism is expected in the second half of this year, but the report by the UN Conference on Trade and Development (UNCTAD) still shows a loss of between $1.7 trillion and $2.4 trillion in 2021, compared with 2019 levels.

UNCTAD estimated a year ago that a four- to 12-month standstill in international tourism would cost the global economy between $1.2 trillion and $3.3 trillion, including indirect costs.

But the losses are worse than previously expected, as even the worst-case scenario projected last year has turned out to be optimistic, with international travel still low more than 15 months after the pandemic started.

International tourist arrivals declined by about one billion or 73% between January and December 2020. In the first quarter of 2021, the UNWTO points to a decline of 88%.

Developing countries have borne the biggest brunt of the pandemic’s impact on tourism. They suffered the largest reductions in tourist arrivals in 2020, estimated at between 60% and 80%.

The most-affected regions are north-east Asia, south-east Asia, Oceania, North Africa and South Asia, while the least-affected ones are North America, western Europe and the Caribbean.

With Covid-19 vaccinations being more pronounced in some countries than others, tourism losses are reduced in most developed countries but worsened in developing countries.

Vaccination rates are uneven across countries, ranging from below 1% of the population in some countries to above 60% in others.

The asymmetric roll-out of vaccines magnifies the economic blow tourism has suffered in developing countries, as they could account for up to 60% of the global GDP losses, according to the report.

UNCTAD acting secretary-general Isabelle Durant said: “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,”

UNWTO secretary-general Zurab Pololikashvili added: “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, especially in developing countries, many of which are highly dependent on international tourism.”

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