The lack of activity and worst decline of international tourism due to the COVID-19 pandemic could cause losses in excess of US$4 trillion to the global GDP for 2020 and 2021, according to a new UNCTAD report.

This estimated loss emanates from the direct impact of the pandemic on tourism and its attendant effects on other closely linked sectors.

The report, jointly presented with the UN World Tourism Organization (UNWTO), indicates that international tourism and its closely linked sectors suffered an estimated loss of $2.4 trillion in 2020 due to direct and indirect impacts of a steep drop in international tourist arrivals.

In like manner, the report warns that a loss is likely to occur this year, 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,” UNCTAD Acting Secretary-General Isabelle Durant indicated.

UNWTO Secretary-General Zurab Pololikashvili commented: “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.”

COVID-19 vaccination rates are uneven across countries, ranging from below 1 per cent of the population in some countries to above 60 per cent in others. With vaccination rates higher in developed economies than developing, the loss in tourism is likely to be pronounced in developing than in developed.

Return of international tourism to pre-pandemic levels to delay

According to the report, 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.

However, experts are of the view that a return to pre-COVID-19 international tourist arrival levels is unlikely until 2023 or later according to UNWTO.

The main barriers are travel restrictions, slow containment of the virus, low traveller confidence and a poor economic environment.

A rebound in international tourism is expected in the second half of this year, but the UNCTAD report still shows a loss of between $1.7 trillion and $2.4 trillion in 2021, compared with 2019 levels.

Projections made by UNWTO reflects a reduction of 75 per cent 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 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 per cent 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 per cent reduction of tourism in countries with low vaccination rates, and a 37 per cent reduction in countries with relatively high vaccination rates, mostly developed countries and some smaller economies.

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 per cent and 80 per cent.

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.