The crash in international tourism due to the coronavirus pandemic could translate to over $4 trillion loss in global Gross Domestic Product (GDP) for 2020 – 2021.
Ironically, tourism losses are reduced in most developed countries but worsened in tourist-dependent developing countries because of vaccine inequity.
South-East Asia was among the most affected regions.
And pre-COVID-19 international tourist arrival levels is not expected to return until 2023 or later.
This was according to a United Nations Conference on Trade and Development (UNCTAD) report , jointly presented with the UN World Tourism Organization (UNWTO), today (June 30).
International tourism and its closely linked sectors suffered an estimated loss of $2.4 trillion in 2020 alone, due to the direct and indirect impact of a steep drop in international tourist arrivals.
A similar loss, of $1.8 trillion to $2.4 trillion is expected in 2021, the report warned, noting that the tourism sector’s recovery will largely depend on the uptake of COVID-19 vaccines globally.
“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,” says UNCTAD Acting Secretary-General Isabelle Durant.
“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,” stressed UNWTO Secretary-General Zurab Pololikashvili.
However, developing countries are hurt by vaccine inequity, with COVID-19 vaccinations being more pronounced in some countries than others, the report says.
COVID-19 vaccination rates are uneven across countries, ranging from below 1% of the population in some countries to above 60% in others.
According to the report, the asymmetric roll-out of vaccines magnifies the economic blow tourism has suffered in developing countries, as they could account for up to 60% of the global GDP losses.
The tourism sector is expected to recover faster in countries with high vaccination rates, such as France, Germany, Switzerland, the United Kingdom and the United States, according to the report.
The main barriers are travel restrictions, slow containment of the virus, low traveller confidence and a poor economic environment.
While rebound in international tourism is expected in the second half of this year, but the UNCTAD report still shows a loss of up to $2.4 trillion in 2021, compared with 2019 levels.
The results are based on simulations that capture the effects of international tourism reduction only, not policies such as economic stimulus programmes that may soften the pandemic’s impact on the sector.
The report assesses the economic effects of three possible scenarios – all reflecting reductions in international arrivals – in the tourism sector in 2021.
The first one, projected by UNWTO, reflects a reduction of 75% in international tourist arrivals – the most pessimistic forecast – based on the tourist reductions observed in 2020.
In this scenario, a drop in global tourist receipts of $948 billion causes a loss in real GDP of $2.4 trillion, a two-and-a-half-fold increase. This ratio varies greatly across countries, from onefold to threefold or fourfold.
This is a multiplier and depends on the backward linkages in the tourism sector, including the unemployment of unskilled labour, according to the report.
The second scenario reflects a 63% reduction in international tourist arrivals, a less pessimistic forecast by UNWTO.
And the third scenario, formulated by UNCTAD, considers varying rates of domestic and regional tourism in 2021.
It assumes a 75% reduction of tourism in countries with low vaccination rates, and a 37% reduction in countries with relatively high vaccination rates, mostly developed countries and some smaller economies.
Furthermore, reduced tourism causes a 5.5% rise in unemployment of unskilled labour on average, with a high variance of 0% to 15%, depending on the importance of tourism for the economy.
Labour accounts for around 30% of tourist services’ expenditure in both developed and developing economies. Entry barriers in the sector, which employs many women and young employees, are relatively low.
In July last year, UNCTAD estimated that a four- to 12-month standstill in international tourism would cost the global economy between $1.2 trillion and $3.3 trillion, including indirect costs.
But the losses are worse than previously expected, as even the worst-case scenario UNCTAD projected last year has turned out to be optimistic, with international travel still low more than 15 months after the pandemic started.
According to UNWTO, international tourist arrivals declined by about 1 billion or 73% between January and December 2020. In the first quarter of 2021, the UNWTO World Tourism Barometer points to a decline of 88%.
Developing countries have borne the biggest brunt of the pandemic’s impact on tourism.
They suffered the largest reductions in tourist arrivals in 2020, estimated at between 60% and 80%.
The most-affected regions are North-East Asia, South-East Asia, Oceania, North Africa and South Asia, while the least-affected ones are North America, Western Europe and the Caribbean.
In a separate report earlier this month, the World Travel & Tourism Council’s annual Economic Impact Report (EIR) revealed that COVID-19 pandemic’s impact on the Philippine’s Travel & Tourism sector last year wiped out $37 billion from the nation’s economy and caused two million to lose their jobs.

Source: Manila Bulletin (