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UN Report: Global Tourism Industry Could Suffer More Than $4 Trillion Loss Due to COVID-19

  • United Nations report suggests that tourism losses due to COVID-19 could be just as severe this year as in 2021
  • Uneven vaccine distribution is the key factor influencing losses, although factors like low traveler confidence also play a role
  • The UN does not expect the global tourism sector to fully recover until 2023, although recovery is likely to be faster in wealthier nations with higher vaccination rates

Summary by Dirk Langeveld

The COVID-19 pandemic’s impact on tourism businesses is likely to continue through this year as vaccine distribution lags in developing countries, according to a United Nations report.

The study by the UN’s Conference on Trade and Development and its World Tourism Organization found that the pandemic cost the global tourism sector and associated industries $2.4 trillion in direct and indirect in 2020. Researchers suggest that losses in 2021 could be just as severe, ranging between $1.7 trillion and $2.4 trillion despite the increasing demand for travel with the advent of COVID-19 vaccines.

The forecast is based on three different scenarios. One anticipates a 75 percent drop in international tourism, in line with 2020’s losses. Another is slightly less pessimistic, modeling a 63 percent decrease in international tourism. The third scenario outlines varying impacts, from a 75 percent tourism drop in developing nations with poor COVID-19 vaccination rates to a 37 percent decrease in nations with higher vaccination rates.

Researchers say disproportionate vaccine distribution is a key issue in the drop in tourism, with developing nations accounting for 60 percent of the losses. Travel restrictions, slow containment of COVID-19, and low traveler confidence are other issues impacting demand.

The UN says the tourism losses result in an average unskilled labor unemployment increase of 5.5 percent, with a variance of up to 15 percent depending on the importance of tourism to the economy. The United States is forecast to have a GDP decrease of 1.1 percent to 2.1 percent based on tourism losses.

Researchers suggest that the tourism sector as a whole is unlikely to bounce back until 2023, although it expects faster recovery in wealthier nations with higher vaccination rates.

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