Covid tourism freeze could cost global economy $4tn by year end

Covid tourism freeze could cost global economy tn by year end

The cost to the global economy of the tourism freeze caused by Covid-19 could reach $4tn (£2.9tn) by the end of this year, a UN body has said, with the varying pace of vaccine rollouts expected to cost developing nations and tourist centres particularly dear.

Nations including Turkey and Ecuador will be among the hardest hit by the severe disruption to international tourism, with holiday favourites such as Spain, Greece and Portugal also badly affected. Pandemic-related losses have reached up to $2.4tn this year, according to a report by the United Nations Conference on Trade and Development (Unctad). The potential lost tourism-related income in 2021 is equivalent to the effect of switching off 85% of the UK economy, while projected losses over 2020 and 2021 could equate to removing Germany from the global economy for two years.

Unctad said developing countries were likely to suffer the most this year, with heavily tourism-reliant countries such as Spain, Greece and Portugal benefiting from a swift vaccine rollout in stronger economies.

Countries that lean on the tourism sector for economic output but that are susceptible to problems such as a slow vaccine rollout could see their economies shrinking by nearly a tenth, the report found.

Variance in vaccine rollout is behind a significant difference in how Unctad thinks countries around the world could be affected.

The report’s worst-case prediction is based on tourist numbers mimicking 2020, when they were down 74% compared with 2019, a reduction equivalent to 1bn passenger arrivals and worse than Unctad had expected.

Its best-case scenario for 2021 assumes that countries with low vaccination rates will experience no improvement, but that those with high rates of vaccination see a much smaller reduction of 37% compared with a normal year.

This is an excerpt from an article by Rob Davies, originally published by The Guardian

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