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Covid tourism freeze could cost the world economy $ 4 trillion by the end of the year | Travel and leisure

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The cost to the global economy of the tourism freeze caused by Covid-19 could reach $ 4 trillion (£ 2.9 trillion) by the end of this year, a UN body said, with the variable pace of vaccine implementation. It will cost developing nations and tourists. particularly beloved centers.

Countries like Turkey and Ecuador will be among the hardest hit by the severe disruption in international tourism, and holiday favorites like Spain, Greece and Portugal will also be hit hard. Losses related to the pandemic have reached as much as $ 2.4 trillion this year alone, according to a report of the United Nations Conference on Trade and Development (UNCTAD).

The potential loss of tourism-related income in 2021 alone is equivalent to the effect of shutting down 85% of the UK economy, while projected losses for 2020 and 2021 could be equivalent to removing Germany from the global economy for two years .

Unctad said developing countries are likely to suffer the most this year, with countries heavily reliant on tourism, such as Spain, Greece and Portugal, benefit from a rapid launch of vaccines in stronger economies.

Countries that rely on the tourism sector for economic results, but are susceptible to problems like a slow launch of vaccines, could see their economies shrink by nearly a tenth, according to the report.

Variation in vaccine release is behind a significant difference in how Unctad believes 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% on average compared to 2019, a reduction equivalent to a billion passenger arrivals and worse than Unctad expected.

Your best-case scenario for 2021 assumes that countries with low vaccination rates do not see any improvement, but that those with high vaccination rates see a much smaller reduction of 37% compared to a normal year.

Turkey will be hit hardest in any scenario, according to Unctad, with its economy contracting by 7.8% at best and 9.1% at worst.

The report notes that tourism represents around 5% of the country’s economic output and that the number of tourists who went there last year dropped by 69%.

Ecuador’s GDP is projected to fall 9% in the worst case and 7.5% in the best case, while South Africa will be the third most affected, with a range of 8.1% to 6, 9%.

Holiday favorites in Europe, such as Spain, Portugal and Greece, could see their GDP fall by 7%, 8% and 8%, respectively.

In Unctad’s worst case, Ireland is projected to take the fourth biggest hit, while the UK is eighth, despite the rapid deployment of vaccines.

But the UK would perform much better than the rest of the world in the most optimistic projections, due to the high proportion of the population that has received both doses of a vaccine.

Zurab Pololikashvili, Secretary General of the UN World Tourism Organization, said: “Tourism is a lifeline for millions, and advancing vaccination to protect communities and support the safe restart of tourism is critical to job recovery. work and the generation of much-needed resources, especially in developing countries, many of which depend heavily on international tourism. “

Salinas, Ecuador. The country’s GDP is projected to fall 9% in the worst case. Photographer: MarcPo / Getty

Regionally, Central America is projected to suffer the most, with GDP potentially falling by as much as 11.9%, followed by East Africa with 9.3% and Southeast Asia with a drop of 8.4 %.

Unctad’s assessment is based on the direct impact of the loss of income in tourist places such as hotels and restaurants, as well as the domino effect that extends to the sectors that supply tourism, such as food, beverages, retail, communications and transport.

“The world needs a global vaccination effort that protects workers, mitigates adverse social effects and makes strategic decisions regarding tourism, taking into account possible structural changes,” said Acting Secretary General of the Unctad, Isabelle Durant.

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