By: Azhar Azam
Tourism has been one of the major economic sectors that have been worst-affected by the fury of coronavirus pandemic as months of lockdowns, border closures, travelling restrictions, quarantine measures and fears of Covid-19 resurgence continue to push the leisure industry to the edge of an abyss.
While airliners remain caged in the hangars with their wing-feathers clipped and once-lively and packed tourist spots draw the scenes of deserted hotels, the washed-out holidaying business has bankrupted quite a few international carriers and pose serious threats to the existence of several others.
It is not just the aviation giants or the other businesses that feel the heat of the Covid-19 from a scorching distance, the survival of many global economies and millions of people is also deeply tied with the tourism, whom the disease is showing no mercy to, and keeps on to make their expectations of revival more and more distant.
Lending a prognosis over the compound challenges being encountered by the tourism sector, IMF’s 2020 External Sector Report warned countries such as Costa Rica, Greece, Morocco, Portugal and Thailand could be among the hardest-hit nations with losses in tourism proceeds exceeding 3% of GDP.
The Fund’s assessments were based on the UN World Trade Organization (UNWTO) May 7 report – which projected lost export revenues to reach up to $1.2 trillion in 2020, putting at least 100 million direct tourism jobs at risk – and predicted a sharp decline in tourism receipts of 70% if the sector is gradually opened in September.
UNCTAD says this loss in export revenues of tourism – a sector that accounts for 7% of global trade or $1.7 trillion and supports one in 10 jobs globally – could raise the global economic losses to $3.3 trillion or 4.2% of the world GDP in 2020 if the shutdown of international tourism industry prevails for a most pessimistic period of one year.
International tourism is the world’s third-largest export category with about $1.6 trillion, behind chemicals and fuel that each amounted for more $1.9 trillion in 2017, and the sector added $100 billion to its revenues in 2018, $5 billion a day in exports. Every year, more than 80 million travellers travel to the US, Spain and France, allowing these countries to earn $214 billion, $74 billion and $67 billion respectively.
Alas, the signs of the recovery of international tourism are not good. With all the world economies are “several quarters” away from returning to pre-pandemic growth levels – including the US shrank by 33%, the most since World War II and the UK entered recession in the 11 years with 20.4 percent GDP plunge – it is very disquieting that the industry would witness a comeback any time soon.
Casting doubts on the much-lauded “V-shaped recovery,” the Fitch Ratings despite moderately upward revision of the global economic outlook expected unemployment to significantly rise in Eurozone, top recipient of tourism revenues, with jobs subsidies are scaled back and labor-intensive sectors including tourism continue to struggle.
As the UNWTO World Tourism Barometer estimated that the near-complete lockdown, imposed in response to the pandemic, led to a 98% fall in international tourists in May when compared to 2019 –the world cannot be complacent about the tourism and there is a pressing need to assist the tourism enterprises such as airlines and hotel, tourism-reliant economies and millions of workers and their families.
This is hence very important for all the countries to cooperate with each other and take extraordinary steps to protect this critical source of income that is risking the global growth and livelihoods of 100 million people tied with the tourism industry and help them to through the bitter end of the outbreak.
UNCTAD five-point policy pathway for a sustainable revival of globe-trotting activities – including mitigate socio-economic impacts on livelihoods; boost competitiveness and build reliance; advance innovation and digital transformation of tourism; foster sustainability and green growth; and coordination and partnerships to restart and transform sector towards achieving SDGs – should be rigorously implemented or else the insurmountable obstacles would stroke a grievous harm to the international tourism.
While airliners remain caged in the hangars with their wing-feathers clipped and once-lively and packed tourist spots draw the scenes of deserted hotels, the washed-out holidaying business has bankrupted quite a few international carriers and pose serious threats to the existence of several others.
It is not just the aviation giants or the other businesses that feel the heat of the Covid-19 from a scorching distance, the survival of many global economies and millions of people is also deeply tied with the tourism, whom the disease is showing no mercy to, and keeps on to make their expectations of revival more and more distant.
Lending a prognosis over the compound challenges being encountered by the tourism sector, IMF’s 2020 External Sector Report warned countries such as Costa Rica, Greece, Morocco, Portugal and Thailand could be among the hardest-hit nations with losses in tourism proceeds exceeding 3% of GDP.
The Fund’s assessments were based on the UN World Trade Organization (UNWTO) May 7 report – which projected lost export revenues to reach up to $1.2 trillion in 2020, putting at least 100 million direct tourism jobs at risk – and predicted a sharp decline in tourism receipts of 70% if the sector is gradually opened in September.
UNCTAD says this loss in export revenues of tourism – a sector that accounts for 7% of global trade or $1.7 trillion and supports one in 10 jobs globally – could raise the global economic losses to $3.3 trillion or 4.2% of the world GDP in 2020 if the shutdown of international tourism industry prevails for a most pessimistic period of one year.
International tourism is the world’s third-largest export category with about $1.6 trillion, behind chemicals and fuel that each amounted for more $1.9 trillion in 2017, and the sector added $100 billion to its revenues in 2018, $5 billion a day in exports. Every year, more than 80 million travellers travel to the US, Spain and France, allowing these countries to earn $214 billion, $74 billion and $67 billion respectively.
Alas, the signs of the recovery of international tourism are not good. With all the world economies are “several quarters” away from returning to pre-pandemic growth levels – including the US shrank by 33%, the most since World War II and the UK entered recession in the 11 years with 20.4 percent GDP plunge – it is very disquieting that the industry would witness a comeback any time soon.
Casting doubts on the much-lauded “V-shaped recovery,” the Fitch Ratings despite moderately upward revision of the global economic outlook expected unemployment to significantly rise in Eurozone, top recipient of tourism revenues, with jobs subsidies are scaled back and labor-intensive sectors including tourism continue to struggle.
As the UNWTO World Tourism Barometer estimated that the near-complete lockdown, imposed in response to the pandemic, led to a 98% fall in international tourists in May when compared to 2019 –the world cannot be complacent about the tourism and there is a pressing need to assist the tourism enterprises such as airlines and hotel, tourism-reliant economies and millions of workers and their families.
This is hence very important for all the countries to cooperate with each other and take extraordinary steps to protect this critical source of income that is risking the global growth and livelihoods of 100 million people tied with the tourism industry and help them to through the bitter end of the outbreak.
UNCTAD five-point policy pathway for a sustainable revival of globe-trotting activities – including mitigate socio-economic impacts on livelihoods; boost competitiveness and build reliance; advance innovation and digital transformation of tourism; foster sustainability and green growth; and coordination and partnerships to restart and transform sector towards achieving SDGs – should be rigorously implemented or else the insurmountable obstacles would stroke a grievous harm to the international tourism.
*This is one of my opinion pieces (unedited) that first appeared in "The Express Tribune":