International tourism slump may cause $4 trillion loss to global economy, says UNCTAD report

 

The report, jointly presented by UNCTAD and the UN World Tourism Organisation (UNWTO), states that international tourism and its closely allied sectors suffered an approximate loss of $2.4 trillion in 2020

The downturn in international tourism due to the COVID-19 pandemic will cost the global economy over $4 trillion for the years 2020 and 2021, according to a UNCTAD report published on Wednesday. 

The approximate loss has been caused by the COVID-19 pandemic's direct impact on global tourism and its domino effect on other sectors closely associated with it. 

The report, jointly presented by UNCTAD and the UN World Tourism Organisation (UNWTO), states that international tourism and its closely allied sectors suffered an approximate loss of $2.4 trillion in 2020 owing to direct and indirect impacts of a steep decline in international tourist arrivals. 

The report further warns that a similar loss may happen this year, adding that the tourism sector's revival will hinge upon the uptake of coronavirus vaccines worldwide. 

"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," UNCTAD Acting Secretary-General Isabelle Durant said. 

The report adds that with COVID-19 vaccinations being more pronounced in some countries than others, tourism losses are mitigated in most developed nations but exacerbated in developing countries. 

Coronavirus vaccination rates are lopsided across nations, ranging from below 1 per cent of the population in some countries to over 60 per cent in others. 

The uneven roll-out of vaccinations, according to the report, amplifies the economic blow tourism has suffered in developing nations, as they may constitute up to 60 per cent of global GDP losses.

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

The experts, however, do not foresee a return to pre-COVID international tourist arrival levels until 2023 or later, as per UNWTO. 

The main handicaps are travel curbs, low traveller confidence, slow containment of coronavirus, and a poor economic environment. 

Although a rebound in global tourism is expected in the second half of 2021, the UNCTAD report still shows a loss of between $1.7 trillion- $2.4 trillion this year, in contrast with 2019 levels. 

As per the report, the decline in tourism caused a 5.5 per cent increase in unemployment of unskilled labour on average, affecting a sector that employs many women and young people.

"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," said UNWTO Secretary-General Zurab Pololikashvili.