Life after lock down: Govts. Urged to assist tourism enterprises facing the risk of shutting down

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The global tourism standstill due to COVID-19 has cost the sector dearly, especially in countries heavily reliant on it. A new UN report maps how tourism could be rebuilt.

This experience is being echoed worldwide. The blow to tourism is putting the world’s third largest export sector (after fuels and chemicals) and 100 million direct jobs at risk, the United Nations said in a policy brief on how COVID-19 is transforming the sector

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In 2019 tourism accounted for 7% of global trade. The report projects that export revenues from tourism, which supports one in 10 jobs globally, could fall by $910 billion to $1.2 trillion in 2020.

For small island developing states (SIDS), where tourism accounts for as much as 80% exports, the impacts of the pandemic are devastating.

A policy solution is needed to mitigate the impacts on livelihoods, especially for women, youth and informal workers, the UN says, and it should be balanced with ensuring health is a priority, with coordinated heath protocols firmly in place.

Gloomy outlook as more restrictions kick in

In July, UNCTAD published a report that showed a protracted shutdown of the global tourism industry could raise the loss to $2.2 trillion or 2.8% of the world’s GDP, if the break in international tourism lasts for a total of eight months.

UNCTAD estimates losses in the most pessimistic scenario, a 12-month break in international tourism, to be as high as $3.3 trillion or 4.2% of global GDP.

Fears abound that the 2.8% scenario is becoming more likely, especially as travel restrictions that were lifted come back into force.

For instance, in Europe, travel restrictions that were lifted for the summer are now coming back as some countries implement new measures to curb a rise in COVID-19 cases. This will have a significant impact on the recovery process.

“Never before has tourism’s economic impact on global GDP been so sharply in focus. We cannot sleep while the third largest global export sector is threatened with collapse,” UNCTAD’s Secretary-General Mukhisa Kituyi said.

He urged governments to protect workers, assist tourism enterprises facing the risk of bankruptcy, such as hotels and airlines, and called on the international community to support access to funding for the hardest-hit countries.

UNCTAD’s Special Adviser for the Blue Economy, Dona Bertarelli, said there are opportunities to rebuild tourism and the hospitality industry in ways that benefit communities as well as the environment, including the blue economy.

“At this critical time, we have the possibility to help communities that depend on tourism for their livelihoods to rebuild their businesses in a more resilient and sustainable way,” she said.

“It’s vital to make the connection between government economic recovery packages, private sector investments and philanthropic funding, so as to collectively provide the resources and skills that coastal communities need to shift to a regenerative blue economy,” Ms. Bertarelli added.

Policy pathway to a sustainable restart

The UN report says the COVID-19 crisis is a watershed moment to align the effort of sustaining livelihoods dependent on tourism to the Sustainable Development Goals (SDGs) to ensure a more resilient, inclusive, carbon neutral, and resource-efficient future.

It calls for a five-point roadmap to transform tourism in the following priority areas:
Boost competitiveness and build resilience, including through economic diversification, with promotion of domestic and regional tourism where possible, and facilitation of conducive business environment for micro, small and medium-sized enterprises.

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

Foster sustainability and green growth to shift towards a resilient, competitive, resource efficient and carbon-neutral tourism sector. Green investments for recovery could target protected areas, renewable energy, smart buildings and the circular economy, among other opportunities.

Coordination and partnerships to restart and transform sector towards achieving SDGs, ensuring tourism’s restart and recovery puts people first and work together to ease and lift travel restrictions in a responsible and coordinated manner.

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