Global Tourism Crash May Cause $4 Trillion Loss to World Economy

Subscribe to the New Economy Daily newsletter, Follow us @economics, and Subscribe to our PodcastCovid-19's tourism slump will cause a global economic crisis of more than $4 trillion in 2020 and 2021. This is much worse than expected as a slow vaccination rollout can cripple developing countries who are heavily dependent on international tourists.Even though international tourism is recovering in the second half of the year in countries such as the U.S., U.K. and France with higher vaccination rates, losses could reach $1.7 trillion to $2.4 Trillion, according to a report by the United Nations Conference on Trade and Development.This study highlights the expensive impact of inequal access to vaccines across the globe. According to the Unctad, developing countries could account for up to 60% of global gross domestic product losses.Continue reading: Vaccine Shortages Cause Global Supply Program Halting RolloutsTourism slump Estimated losses as a percentage of GDP in selected regions and countries Source: United Nations Conference on Trade and Development, based on GTAP simulation.This report shows that the crisis in tourism is not over. Travel restrictions and bans are still in effect in many areas with low vaccination rates. According to the UN World Tourism Organization's study, the world might not see an increase in international tourist arrivals prior to 2023.The biggest impact was felt in countries like Thailand and Turkey that rely on foreign tourists for their economic growth. A drop in tourism can also impact closely related sectors like food, beverage, retail trade, communications, and transport.The overall impact of the tourism crash has been a 5.5% increase in unemployment for unskilled labor. This is a devastating effect on a sector that employs many young women and men.Tourism is vital for millions of people. Advancing vaccination to protect communities, support tourism's safe restart, is crucial to the recovery and development of jobs, particularly in developing countries, stated Zurab Pololikashvili, Secretary-General of UN World Tourism Organization.The prospect of taking a vacation abroad is increasing in developed countries. According to the Conference Boards June consumer confidence index, a rising number of Americans plan to travel abroad.