Coronavirus Will Cost Tourism Industry Nearly $3 Trillion

Coronavirus Will Cost Tourism Industry Nearly $3 Trillion

08/07/2020 0 By M Zaman

Global tourism industry revenues are likely to fall up to $3 or £2 trillion because of Coronavirus restrictions worldwide.

There are chances US to lose the most. According to a U.N. study reveals.

The study released by The United Nations Conference on Trade and Development (UNCTAD) divide scenarios with lockdown measures lasting upto 4 months, 8 months and 12 months.

There are chances revenues will fall $1.17 or £1 trillion, $2.22 or £1.8 trillion and $3.3 or £2.63 trillion respectively or between 1.5-4.2 percent of the world’s gross domestic product (GDP)

However, over the past 20 years tourism has become a backbone of many countries’ economies and a millions of people around the world rely within the sector for livelihood.

Barcelona, Spain

Barcelona, Spain (Image: Pixabay)

This figure has grown from $490 or £391 billion to $1.6 or £1.27 trillion between these periods.

Many countries across the world are reopening tourism sector. Despite all of this the report states “even as tourism slowly restarts in an increasing number of countries, it remains at a standstill in many nations”.

UNCTAD’s director of international trade, Pamela Coke-Hamilton said, “These numbers are a clear reminder of something we often seem to forget: the economic importance of the sector and its role as a lifeline for millions of people all around the world,”.

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“For many countries, like the small island developing states, a collapse in tourism means a collapse in their development prospects. This is not something we can afford,” she added.

It also reveals that deloping countries like Jamaica and Thailand will experience “steepest GDP losses”. There are chances these countries will lose out nearly 11% and 9% of GDP respectively.

Chiang Mai Temple, Thailand

Chiang Mai Temple, Thailand (Image: Pixabay)

On the other hand, tourism hotspots like Kenya, Egypt and Malaysia may lose over 3% of their GDP.

Popular European and North American destinations, including France, Greece, Italy, Portugal, Spain and the United States may lose billions of dollars because of dramatic fall in international tourism.

As there are massive fall in tourist arrivals, this will left a growing number of skilled and unskilled workers unemployed or with less income. Thailand, Jamaica and Croatia will be affected mostly.

It further estimates that every $1 or £1 million lost in international tourism revenue, a country’s national income may decline by $2 or £1.60 million to $3 or £2.39 million.

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Men workers within the industry will suffer mostly in comparison to women.

James Bond Beach in Jamaica

James Bond Beach in Jamaica (Image: Wikimedia)

As women are more likely than men to be entrepreneurs in tourism and make up about 54% of the workers in the accommodation and food services sectors.

“This is why women are particularly hard hit in this crisis. And this is why policies that help protect the sector also protect the economic empowerment that many of these women have long fought for,” Ms. Coke-Hamilton said.

This changes will happen because many women in the sector work informally in low-skilled jobs, they are less likely to have unemployment benefits.

The study urges governments to protect workers in the event of where some enterprises are unlikely to recover, wage subsidies.

Government also need to provide “low-interest loans or grants” for tourism enterprises facing the risk of bankruptcy, such as hotels and airlines.

Previously, a study revealed European airlines to lose nearly $76 billion revenues in 2020.

*(1 USD = 0.797850 GBP at the time of writing)

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