Tourism faces a $1.2tn shortfall

Tourism faces a $1.2tn shortfall

As Covid-19 ravages the world economy, the tourism industry has become one the sectors worst affected, hurting jobs, livelihoods, and societies in every single country of the planet.

In view of this, the United Nations (UN) secretary-general published last week a report entitled "Covid-19 and Transforming Tourism". The brief, produced by the Madrid-based UN World Tourism Organization (UNWTO), is a ground-breaking scrutiny of the socio-economic impacts of the pandemic on tourism worldwide.

"Tourism is one of the world's most important economic sectors. It employs one in every 10 people on Earth and provides livelihoods to hundreds of millions more," stated António Guterres, the UN chief, on the launch of this momentous publication.

With possible declines in global arrivals and receipts from international tourism of 58% to 78% for the whole year, the outlook is dire.

According to the UN, export revenues from tourism could fall by $910 billion to $1.2 trillion (28-37 trillion baht) in 2020 -- equivalent to Indonesia's GDP, for example -- reducing global GDP by 1.5% to 2.8%.

As a result, up to 100 million direct tourism jobs are at risk, many "in the informal economy or in micro, small and medium-sized enterprises, which employ a high proportion of women and young people", stressed Mr Guterres.

And this is only half of the story. The UN also warns about the spillover effect: sectors associated with tourism, such as labour-intensive accommodation and food services, provide employment for 144 million workers and are seeing unemployment skyrocket, with disastrous consequences to vulnerable communities.

"The pandemic is far from over. As cases across the world make clear, we must be ready to act fast to save lives. But it is now also clear that we can take decisive action to protect jobs and safeguard the many benefits tourism delivers," stated Zurab Pololikashvili, the UNWTO chief, on Friday.

The UN also alerts about the oversized impact of the current crisis in developing countries, particularly in many Small Island Developing States, where tourism has accounted for as much as 80% of exports, like in the case of the Maldives.

The sudden fall in tourism has also cut off funding for biodiversity conservation, given that around 7% of the pre-Covid-19 global tourism was related to wildlife.

The UN highlights the case of Cambodia (Thailand is not mentioned in this report), where endangered ibis birds were killed for meat in April following the collapse of tourism demand.

"The impact of Covid-19 on tourism places further pressure on heritage conservation as well as on the cultural and social fabric of communities, particularly for indigenous people and ethnic groups," cautions the UN.

Data compiled by the UNWTO indicates that, in response to the pandemic, 90% of the World Heritage Sites and museums closed -- and 13% of museums may never open again.

What can be done?

"Policy decisions need to be coordinated across borders to face up to a challenge, which does not care about borders […] we can only call on governments to back up strong words with equally strong actions," urged Mr Pololikashvili.

In this regard, this UN report highlights the case of Malaysia, a country that has already established its Tourism Recovery Action Council.

The UNWTO believes that domestic tourism is likely to help the sector emerge from the current impasse.

"We often underestimate the volume of domestic tourism," said Sandra Carvão, the UNWTO chief of Market Intelligence and Competitiveness, during an online press briefing joined by the Bangkok Post.

The UN Secretary-General identifies five priority areas to help the tourism sector recover:

1. Mitigate the socio-economic impacts on livelihoods, like in South Korea where, according to the report, tourism employees placed on technical unemployment will receive an allowance of more than 50% of their gross salary.

2. Boost competitiveness and build resilience, with measures like increasing support for micro, small and medium-sized enterprises, which form a whopping 80% of tourism enterprises around the world.

3. Advance innovation in tourism, including promotion of investment in digital skills, particularly for workers temporarily without jobs and for job seekers.

In this area, the UN showcases Cambodia again, pointing out how Phnom Penh provided retraining and upskilling programmes for laid-off workers, and announced plans to pay 20% of the minimum wage of hospitality workers.

4. Foster sustainability and green growth to shift towards a resource-efficient and carbon-neutral tourism sector through, for example, increasing investments on renewable energy and smart buildings.

5. Coordination to restart the sector ensuring it works to ease and lift travel restrictions worldwide in a responsible way, "putting people first".

Tourism, one of the most dynamic and job intensive sectors, has been hard hit by this devastating pandemic. The challenge is huge, as are the opportunities to make this industry a more sustainable, resilient and inclusive one.


Javier Delgado Rivera is a New York-based freelance journalist. He can be reached out at delgadorivera@gmail.com


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