Tourism impact of COVID-19

Assessing the impact of COVID-19 on global tourism

A new Tourism and COVID-19 Policy Brief issued by the United Nations outlines the consequences of the pandemic for the global tourism sector, and small developing countries in particular.

UN Secretary-General Antonio Guterres has underlined the role and importance of tourism on the global economy with a new policy briefing that assesses the scale of the challenges presented by the COVID-19 crisis.

Crucially, the huge drop in revenues from tourism could reduce global GDP by as much as -2.8%, says the UN. Its World Tourism Organization (UNWTO) agency has said that international tourist numbers could decline by -58% to -78% year-on-year in 2020, and visitor spending from US$1.5 trillion in 2019 to between US$310 and US$570 billion.

The Tourism and COVID-19 Policy Brief puts the global tourism market in a broader economic context.

According to 2019 data, tourism generated 7% of global trade, employed one in every ten people globally and provided livelihoods to millions of people in developed and developing countries.

“As borders closed earlier this year, hotels shut and air travel dropped dramatically, international tourist arrivals decreased by -56% and US$320 billion in exports from tourism were lost in the first five months of 2020 – more than three times the loss during the Global Economic Crisis of 2009.”

Scenarios for the sector suggest that over 100 million direct tourism jobs are now at risk, many of them in micro, small and medium sized enterprises (MSMEs) which employ a high share of women and young people.

What is at stake?

The policy brief notes that Small Island Developing States (SIDS) and Least Developing Countries (LDCs), including many African nations, are most vulnerable due to their reliance on tourism for jobs and economic growth.

The report says: “No country has escaped the decimation of its tourism sector, from Italy where tourism accounts for 6% of the country’s GDP to Palau where it generates almost 90% of all exports. This crisis is a major shock for developed economies and an emergency for the most vulnerable people and developing countries.”

It adds: “In recent years, tourism has become a growing export sector for LDCs, representing 7% of exports in goods and services (10% for non-oil LDC exporters). International tourist arrivals in LDCs grew at +9.7% between 2000 and 2019, against +4.8% worldwide.

International tourist arrivals January to May 2020

With 5% less international travellers US$320 billion were lost in exports from tourism in five months ­­­­­- over three times what was lost in the 2009 economic crisis

WORLD 2019: 1.5 billion (+4%) Jan-May 2020 -56%

Source: World Tourism Organisation (UNWTO), August 2020

“Though the role of tourism on development varies across countries, the sector was instrumental in the graduation of Cape Verde, Maldives and Samoa from the LDC category. Similarly, tourism is a dynamic sector for Africa with tourism exports representing 10% of all exports in 2019, up from 5% in the mid-80s. In SIDS, tourism makes an even-larger economic contribution. The sector accounts for over 30% of total exports in the majority of SIDS, and up to 80% in some. COVID-19 is yet another reminder of how vulnerable SIDS are to global shocks.”

The UN report adds that women, youth and workers in the informal economy are most at risk from job losses and business closures across the tourism sector.

The Policy Brief also underlines how the crisis affects jobs, economies, wildlife conservation and the protection of cultural heritage. Importantly it says, the consequences for the UN’s Sustainable Developments Goals (SDGs) could potentially be devastating.

International tourist arrivals

(% change over same period of the previous year)

Source: World Tourism Organisation (UNWTO), August 2020

“The linkages of tourism to so many other areas of society means this crisis also puts at risk the contribution of the sector to other SDGs, such as gender equality or the reduction of inequalities among and inside countries,” says the UN.

Commenting, Antonio Guterres says: “It is imperative that we rebuild the tourism sector in a safe, equitable and climate friendly manner and so ensure tourism regains its position as a provider of decent jobs, stable incomes and the protection of our cultural and natural heritage.”

Recovery to be gradual

International tourist arrivals in 2020: three scenarios (y-o-y monthly change, %)

Note: Actual data through May includes estimates for countries which have not yet reported data.

Source: World Tourism Organisation (UNWTO), July 2020

The Policy Brief outlines five priorities for the restart of tourism, aimed at ensuring a more resilient, inclusive and carbon neutral sector. These priorities are:

1. Mitigate socio-economic impacts on livelihoods, particularly women’s employment and economic security. 2. Boost competitiveness and build resilience, including through economic diversification and encouragement of MSMEs. 3. Advance innovation and digital transformation of tourism 4. Foster sustainability and green growth 5. Enhanced focus on coordination, and responsible leadership.

International tourism risks returning to levels of 20 years ago

International tourism receipts, 2000-2019 and scenarios for 2020 (US$ billion)

Note: (e) Estimate, (sc) Scenario-based

Source: World Tourism Organisation (UNWTO), July 2020

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The Moodie Davitt eZine

Issue 282 | 2 September 2020

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