The Strategist

UN: Global economy could lose up to $4T to international tourism slowdown

07/01/2021 - 08:13

The United Nations Conference on Trade and Development (UNCTAD) has published a report showing that the downturn in international tourism could cost the world economy $4 trillion by 2020-2021.

The report, prepared jointly with the World Tourism Organization (UNWTO), notes that the tourism sector and businesses dependent on tourist traffic lost $2.4 trillion in 2020 alone. And almost as much could be lost by these sectors in 2021 if the COVID-19 pandemic does not improve. Depending on the effectiveness of the fight against coronavirus infection, it is estimated that the global tourism sector will generate $1.7-2.4 trillion less revenue than in 2019. The top end of that range is the worst-case scenario, which is based on a repeat of 2020, when international tourist arrivals collapsed by 75%.

"The world needs a global vaccination effort that will protect workers, mitigate adverse social impacts and make strategic decisions about tourism in light of potential structural changes," said Isabelle Durand, UNCTAD's acting secretary-general.

The study notes that the pandemic has hit the tourism sector of developing countries hardest, as vaccination tends to be slower there than in developed countries. Business will recover most quickly in countries such as Germany, France, the UK, Switzerland and the US. However, experts interviewed by the UNWTO do not expect the tourism sector to fully recover before 2023.