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The collapse of tourism could cost the global economy more than 4 trillion dollars

The collapse of tourism could cost the global economy more than 4 trillion dollars

The United Nations Trade and Development Organization (UNCTAD) said today, Wednesday, in a report issued jointly with the United Nations World Tourism Organization, that The impact of the COVID-19 pandemic on tourism It could lead to a loss of more than $4 trillion to the global economy.

The estimate is based on losses due to the direct impact of the epidemic on tourism, and the multiplier effect on related sectors, which is worse than previously expected.

Last July, UNCTAD estimated that stagnating international tourism would cost the global economy between $1.2 trillion and $3.3 trillion.

The report said that the sharp decline in the number of tourist arrivals around the world in 2020, led to an economic loss of $2.4 trillion, and the number is expected to be similar this year depending on vaccinations against the COVID-19 virus.

A global vaccination plan is crucial

“The world needs global vaccination efforts that protect workers, mitigate negative social impacts, and make strategic decisions on tourism, taking into account potential structural changes,” said Isabelle Durant, Acting Secretary-General of UNCTAD.

UNWTO Secretary-General Zurab Pololikashvili said: “Tourism is a lifeline for millions, and promoting vaccination to protect communities and support the restart of safe tourism is critical to restoring jobs and generating much-needed resources, particularly in developing countries, many of which are highly dependent. on international tourism.

Damage to developing countries

The report indicated that the number of international tourist arrivals decreased by about one billion tourists, or 73%, last year, while the decline in the first quarter of 2021 was about 88%.

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Developing countries have borne the brunt of the pandemic’s impact on tourism, with declines in arrivals estimated at between 60% and 80%.

They have also been hit by the unequal distribution of vaccines, as the “uneven distribution” of COVID-19 vaccines has compounded the economic blow to the tourism sector in these countries, which can account for up to 60% of global GDP losses.

Recovery amid losses

Tourism is expected to recover faster in countries with high vaccination rates, such as France, Germany, the United Kingdom and the United States. However, tourist arrivals will not return to pre-pandemic levels until 2023 or later, due to obstacles such as travel restrictions, slow containment of the virus, low traveler confidence, and a poor economic environment.

While tourism is expected to rebound in the second half of this year, the report estimates a loss of between $1.7 trillion and $2.4 trillion in 2021, based on simulations that exclude similar stimulus programs and policies.

Possible scenarios

The report’s authors identify three possible scenarios for the tourism sector this year, the most pessimistic of which reflects a 75% drop in international arrivals.

This scenario sees a drop in global tourism receipts by about $950 billion, which could cause a real GDP loss of $2.4 trillion, while the second scenario reflects a 63% drop in international tourist arrivals.

The third looks at varying rates of local and regional tourism, and assumes a 75% decrease in tourism in countries with low vaccination rates, and 37% in countries with relatively high vaccination levels, particularly developed countries and some smaller economies.

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