Tourism could lose 4.2% GDP

THE global tourism sector could lose as much as US$3.3 trillion in value if international travel were to grind to a standstill for another 12 months, according to a new report compiled by the United Nations Conference on Trade and Development.

The UN’s COVID-19 and Tourism: Assessing the Economic Consequences report contends that under the worst case scenario for global tourism, border restrictions could dent the sector’s global GDP by 4.2%.

The most realistic best case scenario would see international tourism still lose $US1.2 trillion following just four months of extended shutdown in travel.

The same study also found that Australia and New Zealand could potentially drop between 2-6% of their total GDPs.

Under the worse case scenario, skilled wages in Australia would be expected to fall between 3-9%, while unskilled employment would also be eroded by 4-11%.

“Many countries depend heavily on tourism and will experience dramatic effects in the labour market and national income,” the report says.

“Loss of employment in the unskilled sector is above 10% in many countries even in the most optimistic scenario and can rise above 40% in the most pessimistic scenario”.

The UN study also suggests there is a “strong case” for governments to intervene and cooperate at an international level to protect the livelihoods of people in the tourism sector.

“This is an unprecedented shock and requires urgent action to prevent wiping out entire sectors that are likely to recover in the hopefully not so distant future,” the report contends.

“Casual and self-employed workers are common in tourism related sectors and should be helped where possible...where some enterprises are unlikely to recover, wage subsidies should be designed to help workers move to new industries.”

Female workers are also disproportionately affected in the tourism sector, the report says.

Access the full report HERE.