Crash in international tourism may cut $4t in global GDP

Tourism unlikely to recover to pre-pandemic levels within next year or 2, UN body projects

ANKARA:

Pandemic's blow to international tourism has cost the global economy more than $4 trillion in 2020 and 2021, UN Conference on Trade and Development (UNCTAD) said on Wednesday.

International tourism and its closely linked sectors suffered an estimated loss of $2.4 trillion in 2020, said a report jointly presented with the UN World Tourism Organisation (UNWTO).

International tourism is projected to rebound in the second half of this year, but the UNCTAD report still shows a loss of $1.7-$2.4 trillion in 2021 compared to 2019 levels.

The crash in tourism increased unemployment of unskilled labor by 5.5% on average, with a high variance of 0% to 15% depending on the importance of tourism to the economy, it added.

Labor accounts for around 30% of tourist services’ expenditure in both developed and developing economies.

Pointing to a similar loss this year, the report underlined that the recovery in tourism will largely depend on the global uptake of Covid-19 vaccines.

Commenting on the report, UNCTAD Acting Secretary-General Isabelle Durant stressed the importance of a global vaccination effort to protect workers, mitigate adverse social effects, and make strategic decisions regarding tourism, taking potential structural changes into account.

UNWTO Secretary-General Zurab Pololikashvili also highlighted that advancing vaccination to protect communities and support tourism’s safe restart is critical to the recovery of jobs and generation of much-needed resources.

As Covid-19 vaccination rates are varied by country, tourism losses are reduced in most developed countries but worsened in developing countries, which could account for up to 60% of global GDP losses, the report noted.

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

However, experts do not expect a return to pre-virus international tourist arrival levels until 2023 or later due to travel restrictions, slow virus containment, low traveler confidence, and a poor economic environment, according to UNWTO.