Impact on tourism could cost world economy more than €3 trillion

By TPN/Lusa, in News, Travel, Economy, Business · 03-07-2021 08:00:00 · 0 Comments

The world economy could lose more than four trillion dollars (three trillion Euros) due to the impact of Covid-19 on tourism, the United Nations Conference on Trade and Development (UNCTAD) said on 30 June.

In a report published jointly with the World Tourism Organisation (WTO), it is noted that the losses are greater in developing countries, as the absence of a widespread vaccination programme against Covid-19 keeps tourists away from these regions.

According to the document, the drop in international tourism due to the pandemic could cause a loss of "more than four trillion dollars in global GDP [gross domestic product] during the years 2020 and 2021."

The estimated loss is due to the pandemic's direct impact on tourism and its effect on closely related sectors.

The report, published in conjunction with the United Nations' WTO, states that international tourism and its sectors "suffered an estimated loss of $2.4 trillion [about two trillion Euros] in 2020 following a sharp drop in international tourist visits".

And for this year the estimates are not much better, admitting a "similar loss", with the recovery of the tourism sector going to depend "to a large extent" on the global implementation of Covid-19 vaccines.

"The world needs a global vaccination effort that protects workers, mitigates adverse social effects and that strategic decisions are taken regarding tourism, taking into account possible structural changes," UNCTAD secretary-general Isabelle Durant said in the statement.

For his part, the secretary-general of the WTO, Zurab Pololikashvili, said tourism "is a lifeline for millions of people" and moving forward with vaccination "to protect communities and support the safe resumption of tourism is critical for the recovery of jobs and the generation of much-needed resources, especially in developing countries," many of which depend heavily on international tourism.

According to the report, vaccination against Covid-19 "is more pronounced in some countries than others, so the economic losses derived from tourism" are minor in most developed countries, but worsen "in developing countries, where the absence of vaccines drives away tourists."

Vaccination rates against Covid-19 are uneven among countries, ranging from less than 1 percent of the population in some countries to more than 60 percent in others.

This asymmetry in vaccination has an economic impact on developing countries, as they can account for up to 60 percent of global GDP losses.

The tourism sector is expected to recover "more quickly" in countries with high vaccination rates, such as France, Germany, Switzerland, the United Kingdom and the United States.

But experts "do not expect to return to pre-pandemic international tourism flow levels until 2023 or even later," according to the WTO. The main obstacles are travel restrictions, slow containment of the virus, people's low confidence in travelling and a poor economic environment.

For this year, the UNCTAD report points to losses of between $1.7 and $2.4 trillion (€1.4 and €2 trillion) from 2019 levels.

The reduction in tourism causes an average 5.5 percent increase in unskilled labour unemployment, with a range between 0 percent and 15 percent depending on the importance of tourism in economies.

Labour represents about 30 percent of the expenditure on tourism services in both developed and developing economies.

UNCTAD recalls that in July last year it had estimated that a paralysis of between four and 12 months of international tourism would cost the world economy between 1.2 and 3.3 trillion dollars, including indirect costs.

However, "the losses are worse than expected" as international travel remains at low levels more than 15 months after the pandemic began.

Photo:Luis García



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