INTERNATIONAL. According to a UNCTAD report, the collapse of international tourism caused by COVID-19 could result in a global GDP loss of more US$4 trillion for 2020 and 2021.According to the agency, the estimated loss was caused by the pandemic's direct effect on tourism and its ripple effects on other closely related sectors.This report was jointly produced with UN World Tourism Organization (UNWTO). It estimates that international tourism and closely related sectors suffered a loss of US$2.4 trillion in 2020 as a result of the direct and indirect effects of a sharp drop in international tourists arrivals.The report warns that similar losses could occur in the coming year. It also notes that tourism sector recovery will heavily depend on global uptake of COVID-19 vaccinations.According to UNCTAD Acting Secretary General Isabelle Durant, the world needs a global vaccine effort that will protect workers and mitigate negative social effects. It will also make strategic decisions about tourism, taking into consideration potential structural changes, said Isabelle Durant.Zurab Pololikashvili, Secretary General of UNWTO, said: Tourism is vital for millions. Advancing vaccination to protect communities, support tourisms safe start, is crucial to the recovery and creation of jobs, particularly in developing countries which are heavily dependent on international tourists.Vaccine inequityThe report states that COVID-19 vaccinations are more prevalent in certain countries than in others. This means that tourism losses in developed countries have decreased, but become worse in developing countries.The COVID-19 vaccination rates vary from below 1% in some countries to over 60% in others.The report states that the asymmetric rollout of vaccines can increase the economic damage tourism has suffered in developing nations, which could lead to up to 60% of global GDP losses.According to the report, tourism will recover quicker in countries that have high vaccination rates like France, Germany and Switzerland. UNWTO says experts don't expect a return of pre-COVID-19 levels of international tourist arrivals until 2023 or later. Travel restrictions, slow containment, low traveller confidence, and poor economic conditions are the main obstacles.2021: Losses increaseAlthough international tourism will rebound in the second half this year, the UNCTAD report still shows that there is a loss between US$1.7 trillion to US$2.4 trillion for 2021 compared to 2019.These simulations only capture the impact of international tourism reduction, and not on policies like economic stimulus programmes that might soften the sector's pandemics effect.The report examines three scenarios that could have economic consequences for the sector, all of which would result in a decrease in international tourists arriving in 2021.UNWTO projects the first scenario, which represents a decrease of -75% international tourist arrivals. This is the most pessimistic projection based on 2020's tourist declines. This scenario shows that a decrease in global tourist receipts by US$948 trillion would result in a loss of real GDP of US$2.4 trillion. That's a two-and a half-fold increase. This ratio can vary greatly between countries, ranging from onefold to threefold or even fourfold.For example, Turkey's international tourism contribution to GDP is about 5%. In 2020, the country saw a 69% drop in international tourists.According to estimates, the country's decline in tourism demand amounts to US$33 billion. This causes losses in closely related sectors like food, beverages and retail trade. Turkey's total output decline is US$93Billion, which is three times as severe as the initial shock. A decline in tourism alone has contributed to a real GDP drop of around -9%. The decline in tourism was partially offset by fiscal measures that stimulated the economy.The second scenario represents a -63% decrease in international tourists arrivals. This is a more optimistic forecast by UNWTO. UNCTAD has also created a third scenario that considers the different rates of regional and domestic tourism in 2021. It assumes that there will be a -75% decrease in tourism in countries with low vaccination rates and a 37% drop in tourism in countries with high vaccination rates. This includes both developing countries and smaller economies.According to the report, a decrease in tourism results in a +5.5% increase in the unemployment rate of unskilled labor on average. There is a wide variance of 0% to 15% depending on how important tourism is for the economy. Around 30% of all tourist services spending in developed and developing countries is accounted for by labour. The sector is highly populated by young women and has low entry barriers.Losses that are more than expectedUNCTAD calculated that the global economy would suffer from a four-to-12 month stoppage in international tourism between US$1.2 trillion to US$3.3 trillion last July. This includes indirect costs.However, the losses are much worse than expected. Even the worst-case scenario UNCTAD predicted last year is optimistic. International travel has remained low for more than 15 months since the pandemic began.UNWTO reports that international tourist arrivals fell by approximately 1 billion, or -73%, between January 2020 and December 2020. The UNWTO World Tourism Barometer shows a drop of -88% in the first quarter 2021.The greatest impact of pandemics on tourism has been felt in developing countries. These countries saw the greatest drop in tourist arrivals between 60% and 80% in 2020.Northeast Asia, Southeast Asia and Oceania are the most affected, North Africa, South Asia and North Africa are the least affected. North America, Western Europe, and the Caribbean are the least affected.
