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United Nations Conference on Trade and Development (UNCTAD) estimates that for every $1 million in lost international tourism revenue, a country’s national income could fall by $3 million. The effects on employment could be dramatic.
The global tourism sector could lose at least $2 trillion (two thousand billion), or 1.5% of the world’s gross domestic product (GDP), after being stranded for nearly six months due to the coronavirus pandemic, UNCTAD said in a recently released report.
The United Nations Trade and Development Organization warned that the loss could reach $2.2 trillion or 2.8 per cent of global GDP if the suspension of international tourism lasts for 10 months, in line with the expected decline in tourism predicted by the United Nations World Tourism Organization (UNWTO). The organization projected a 60-80% decrease in international arrivals for 2020.
In the worst-case scenario, UNCTAD estimates the losses, with a 12-month interruption of international tourism, at $3.3 trillion or 4.2% of world GDP.
According to UNWTO, global tourism, whose revenues have more than tripled over the past 20 years from $490 billion to $1.6 billion, is the backbone of many countries’ economies and a lifeline for millions of people around the world. In some Small Island Developing States, for instance, tourism has accounted for as much as 80% of exports.
But Covid-19 has brought this sector to a halt, with serious economic consequences worldwide. According to UNWTO, 90% of the world’s museums were forced to close at the height of the pandemic, and more than 10% may never reopen. Lock-in measures in some countries, travel restrictions, reduced consumer disposable income and low levels of confidence could significantly slow the sector’s recovery.