Coronavirus impact on tourism to cost $4 trillion: UN report

Web DeskWeb Editor

30th Jun, 2021. 04:28 pm

UNITED NATIONS: The impact of the coronavirus pandemic on tourism could result in an over $4 trillion loss to the global economy, the UN trade and development body, UNCTAD, said on Wednesday in a report issued jointly with the UN World Tourism Organisation.

The estimate is based on the losses caused by the pandemic’s direct impact on tourism and the ripple effect on related sectors, and is worse than previously expected.

Last July, UNCTAD estimated that the standstill in the international tourism would cost the global economy between $1.2 trillion and $3.3 trillion

The steep drop in tourist arrivals worldwide in 2020 resulted in a $2.4 trillion economic hit, the report said, and a similar figure is expected this year, depending on the uptake in the 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,” Isabelle Durant, the UNCTAD acting secretary-general, said.

“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 [the] much-needed resources, especially in [the] developing countries, many of which are highly dependent on international tourism,” UNWTO Secretary-General Zurab Pololikashvili added.

International tourist arrivals declined by around $1 billion, or 73 per cent, last year, while in the first quarter of 2021, the drop was around 88 per cent, the report said.

The developing countries have 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 the Covid-19 vaccines has magnified the economic blow to the tourism sector in these nations, as they could account for up to 60 per cent of global GDP losses.

It is expected that tourism will recover faster in the countries with high vaccination rates, such as France, Germany, the United Kingdom and the United States.

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

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

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

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

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