€3 trillion loss for global tourist sector predicted by UN

€3 trillion loss for global tourist sector predicted by UN
Credit: Belga

Coronavirus restrictions are expected to result in a shortfall of between $1.2 trillion and $3.3 trillion (between €1.06 trillion and €2.9 trillion) in tourism and related sectors in the coming months, according to a UN estimate released Wednesday.

Tourism is one of the sectors most affected by the new coronavirus (Covid-19), according to a new study by the United Nations Conference on Trade and Development (UNCTAD). The sector accounted for around 300 million jobs worldwide in 2019.

The paper is based on a recent assessment by the World Tourism Organisation (UNWTO) that the fall in demand for international travel could result in a drop of anywhere from 850 million to 1.1 billion international tourists.

Related News

In light of these figures, UNCTAD has developed three scenarios to assess “the shortfall for tourism and closely related sectors, such as hotels and restaurants, but also producers who sell their agricultural products to hotels, banks that have granted loans to hotels, energy producers, construction, etc.,” Ralf Peters, Chief of the UNCTAD Trade Information Section, told AFP.

The intermediate scenario developed by UNCTAD, which is the closest to the assessment made by the UNWTO, assumes an interruption of international tourism for eight months and estimates the loss of income at $2,200 billion (around €1,900 billion), or 2.8% of world gross domestic product (GDP).

It should reach $1,200 billion (€1,065 billion), or 1.5% of world GDP, if the interruption lasts only four months, and $3,300 billion (€2,9302 billion), or 4.2% of world GDP, if it lasts one year.

“These numbers are a clear reminder of something we often seem to forget: the economic importance of the sector and its role as a lifeline for millions of people around the world,” said Pamela Coke-Hamilton, director of UNCTAD’s International Trade Division.

“For many countries, like the small island developing states, a collapse in tourism means a collapse in their development prospects. This is not something we can afford,” she added.

In the intermediate scenario envisaged, Jamaica will be the country most affected by the tourism crisis, in terms of the weight of the sector in the national economy, according to the UNCTAD study. Jamaica is followed by Thailand, Croatia and Portugal.

In absolute terms, however, the United States and China will record the largest shortfalls, followed by Thailand, France, Germany, Spain, the United Kingdom and Italy.

The Brussels Times

Copyright © 2023 The Brussels Times. All Rights Reserved.