The United Nations Conference on Trade and Growth (UNCTAD) reports a country’s national income will be reduced by $3 million for every one million dollars in missed foreign tourism sales. The impacts on unemployment may be drastic.
The global tourism industry can lose $2 trillion or 1.5% of the world’s gross domestic product (GDP) after being disrupted by the coronavirus pandemic for almost six months, UNCTAD said in a newly published report.
In compliance with the goals of the United Nations World Tourism Organization (UNWTO), the Organization of Trade and Development of the United Nations cautioned that the deficit could amount to $2.2 trillion or 2.8% of global GDP if the suspension of international tourism continues for ten months. The company expected a 60-80% decline in foreign arrivals by 2020.
In the worst case, UNCTAD forecasts losses at $3.3 trillion or 4.2 percent of world GDP for a 12-month suspension in international tourism.
The UNWTO estimates that global tourism, whose sales have more than tripled from $490 billion to $1,6 billion over the past 20 years, is the backbone of economies in many countries, and a lifeline for millions around the globe. For example, in some small island developing countries , tourism accounted for 80 percent of exports.
But Covid-19 has halted this industry, with drastic economic implications all over the world. According to UNWTO, 90% of museums worldwide have been forced to shutter at the height of the pandemic, and over 10% could never be opened again. In certain nations, closing measures, travel bans, lower customer disposable income and low levels of trust could dramatically slow down the industry’s recovery.