Africa: Covid-19 – Tourism Not Out of the Woods Yet

There is no light at the end of the tunnel for tourism globally. The latest United Nations World Tourism Organisation (UNWTO) report shows that the losses occasioned by the Covid-induced crash in the sector are expected to be worse than previously projected.

In fact, the slump in tourism will contribute to a real gross domestic product (GDP) loss of about 9.3 percent of the East African economy this year, with the region ranked second among mostly affected regions by the pandemic globally, after Central America.

According to a study by UNWTO on the effects of Covid-19 on tourism released this month, North Africa is expected to record a 7.6 percent GDP loss with West Africa being the least affected, reporting only a 4.6 per cent decline.

South Africa tops on the list of the most affected 50 countries to record reduction in tourist arrivals for selected developing countries in 2020 and ranked number three world wide after Turkey and Ecudor in recording huge losses in GDP by country from a reduction in tourism.

The study says the crash in international tourism could cause a loss of more than $4 trillion to the global GDP for the years 2020 and 2021 and that a four-to 12-month standstill in international tourism would cost the global economy between $1.2 trillion and $3.3 trillion, including indirect costs.

The study paints a gloomy picture of recovery with a rebound to pre-pandemic performance expected earliest in 2023 or later.

“The global economy is expected to lose more than $4 trillion for 2020 and 2021, much worse than anticipated, as an uneven vaccination rollout crushes developing countries that are highly dependent on international visitors,” says the report.

The report indicates the number of international tourists arrivals globally declined by 74 percent in 2020 compared with the previous year.

In many developing countries, arrivals were down by 80-90 per cent.

The beginning of the year 2021 has been worse for most destinations, with an average global decline of 88 per cent as compared to pre-pandemic level, although the northern summer and autumn may see a significant improvement for some destinations, in particular for domestic and regional travel.

The indirect effects of this decline are even more devastating, as labour and capital remain unused and the lack of demand for intermediate goods and services has a negative upstream effect into many sectors. This note attempts to quantify these effects and shows how the rollout of vaccines may affect these estimates.