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Tourism losses seen reaching $4 trillion

By LIU YINMENG in Los Angeles | China Daily | Updated: 2021-07-02 07:40
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The first foreign tourists to arrive under a quarantine-free initiative make their way through Phuket's airport on Thursday. Visitors to the Thai resort island must be fully vaccinated. JORGE SILVA/REUTERS

The pandemic's hit to tourism could wipe more than $4 trillion from the global economy by the end of this year, a United Nations agency warned in a report released on Wednesday.

The UN Conference on Trade and Development, or UNCTAD, came up with the estimate for the combined losses for 2020 and 2021 in recognition of the threats to the tourism industry's recovery posed by the inequitable distribution of COVID-19 vaccines and the resulting sluggish vaccination programs in many developing countries.

"The world needs a global vaccination effort that will protect workers, mitigate adverse social effects and make strategic decisions regarding tourism, taking potential structural changes into account," UNCTAD acting Secretary-General Isabelle Durant said.

The agency said in the report that 2021 was on track for a tourism-related economic loss of between $1.7 trillion and $2.4 trillion.

Compared with 2019, international arrivals at destinations around the world plunged 74 percent in 2020, or about 1 billion trips, resulting in a $2.4 trillion cut to global gross domestic product. In many developing countries, the number of international tourists fell by 80-90 percent.

The UNCTAD expects a similar loss to the $2.4 trillion figure from last year, "depending on the uptake in COVID-19 vaccines", it said in the report, which was jointly produced with the UN World Tourism Organization.

At the beginning of the pandemic last year, the UNCTAD estimated that a 12-month lockdown would result in a $3.3 trillion loss to the global economy, which included indirect costs. Ultimately, lockdowns have been applied unevenly and for varying durations by governments. With the pandemic in its second year, international travel remains mired in its slump.

Trying conditions

For most destinations, 2021 began under even more trying conditions than in 2020, with an average global decline of 88 percent in the first quarter of 2021, compared with the pre-pandemic level, the report said.

Almost half the tourism experts interviewed for the UN report don't expect the sector to fully recover to the pre-pandemic level in 2019 until at least 2024.

Developing countries, where the ranks of international arrivals have plunged by an estimated 60-80 percent, have borne the brunt of the pandemic's impact on tourism, the UN agencies said.

These nations have also been hurt by the "asymmetric rollout of vaccines", which "magnifies the economic blow tourism has suffered in developing countries", the agencies said in a statement. Developing countries could account for up to 60 percent of the global GDP losses, they said.

The tourism industry is expected to recover faster in some countries with higher vaccination rates, such as Israel, the United States and Britain, but for many developing countries the outlook isn't as bright, the UN report said.

Despite a surge in infections in Thailand, the first international travelers under a quarantine-free scheme touched down on Thursday in the holiday hotspot of Phuket, as the country tries to reboot its tourism industry while also enduring its worst coronavirus outbreak.

Tourism makes up almost a fifth of the Thai economy, and the COVID-19 pandemic has led to its worst performance since the 1997 Asian financial crisis.

Agencies contributed to this story.

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