#Tourism – A life line in free fall
Written by Isabelle Durant, UNCTAD Deputy Secretary-General
(United Nations Conference on Trade and Development) Public life in countries around the world has come to a near stand still. The drastic measures to combat the coronavirus are unprecedented but are proving critically essential. We do not yet know the full extent it will have on human and economic costs, but there is no doubt that it will be enormous. Current estimates predict between US$2 trillion to $3.4 trillion of income loss and 25 million job cuts. For one sector, the impact is particularly catastrophic: Tourism.
Tourism is a key contributor to GDP, employment and trade. Many forget this. The crisis severely affects each category of the sector: Travelling for leisure and business is at the moment one of our least priorities and our ability to visit family and friends is highly restricted or even forbidden. Our priority is to stay safe and indoors.
The fall in economic activity is already impacting thousands of tourism establishments. In most countries across Europe, restaurants are closed and many hotels around the world have seen their booking numbers plummet. As tourism is an important income provider, providing roughly one in ten jobs worldwide, this crisis threatens the jobs of millions of people. With a workforce that comprises a comparatively high share of women and young people, it will hit those demographic groups hard which are already often the more vulnerable.
Unemployment, or the prospect of it, will severely restrict the ability and aspiration of many to travel, primarily affecting the leisure tourism industry. In addition to this, as many companies will be needing to consolidate their accounts, it will also constrict business travel, which accounts for around 13% of the sector’s total demand.
In many countries international tourism is a critical services export sector and thus a key source of foreign exchange. Globally, tourism accounts for almost 30% of services exports, but in many small island developing States (SIDS), this share is much higher. With less international tourism and foreign exchange, the capacity to service debt can quickly diminish. Adding to this the rapidly appreciating US dollar, an additional storm is looming on the horizon. Urgent multilateral action is required to prevent that storm.
Read more at: United Nations Conference on Trade and Development