Global Tourism Crash May Cause $4 Trillion Loss to World Economy

Global Tourism Crash May Cause $4 Trillion Loss to World Economy

A lull in international tourism brought on by the COVID-19 pandemic, which is costing global economies trillions of dollars, probably won’t return to normal levels for another two years, according to a joint United Nations report published Wednesday.

The assessment, compiled by the United Nations Conference on Trade and Development and World Tourism Organization, projects that sagging tourism will amount to a combined total of $4 trillion in global economic losses for 2020 and 2021.

The report expects international tourism to stagnate for the rest of this year, except for a few Western markets. Further, it says a return to pre-pandemic tourism could take another two years or more.

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It notes that the rate of COVID-19 vaccinations is playing a major factor in the return to normal. The availability of coronavirus vaccinations remains uneven worldwide, which the report says could account for up to 60% of the economic losses.

“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 in a statement.

Travel & Tourism Economic Impact | World Travel & Tourism Council (WTTC)

The experts say vaccinations are limited in developing countries where tourism losses have worsened. Rates also widely vary from country to country; as high as 60% in some nations and less than 1% in others.

“Tourism is a lifeline for millions, and advancing vaccination to protect communities and support tourism’s safe restart is critical to the recovery,” UNWTO Secretary-General Zurab Pololikashvili said in a statement, emphasizing that most developing nations heavily rely on money generated from tourism.

A loss in tourism also results in losses in other sectors like food, beverages, retail trade, communications and transport, the assessment says.

For example, international tourism in Turkey typically contributes to about 5% of its gross domestic product. With the disruption, it could see a loss of $33 billion. In 2020, foreign tourist arrivals in Turkey plummeted by almost 70%, the groups said.

The groups performed three simulations to show possible global tourism outcomes for 2021. The worst of the three shows an overall decline of 75%, worth $2.4 trillion. The best of the three showed a loss of $1.7 trillion.

The countries that performed the worst across all three simulations were Turkey, Ecuador, South Africa, Ireland and Switzerland. The regions that performed the worst were Central America, East Africa, Southeast Asia, North Africa and the eastern European Union.

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