Travel & Tourism Sector's Loss US$4.5 Trillion in 2020 due to COVID-19
- Özgür Töre
The World Travel & Tourism Council’s annual Economic Impact Report (EIR) today reveals the full devastating impact of COVID-19 had on the global Travel & Tourism sector last year, which suffered a massive loss of almost US$4.5 trillion.
The annual EIR from the World Travel & Tourism Council (WTTC), which represents the global Travel & Tourism private sector, shows the sector’s contribution to GDP dropped a staggering 49.1%, this compared to the overall global economy which dropped by just 3.7% last year.
Vast losses run up during 2020, paint the first full picture of a sector struggling to survive in the face of crippling travel restrictions and unnecessary quarantines, which continue to threaten the urgent recovery of the world economy.
Altogether, the sector’s contribution to global GDP plummeted to US$4.7 trillion in 2020 (5.5% of the global economy), from nearly US$9.2 trillion the previous year (10.4%).
In 2019, when global Travel & Tourism was thriving and generating one in four of all new jobs around the world, the sector contributed 10.6% (334 million) jobs globally.
However last year, as the pandemic ripped through the heart of Travel & Tourism, more than 62 million jobs were lost, representing a drop of 18.5%, leaving just 272 million employed across the industry globally.
These jobs losses were felt across the entire ecosystem of Travel & Tourism, with SMEs, which make up 80% of all businesses in the sector, particularly affected. Furthermore, as one of the world’s most diverse sectors, the impact on women, youth and minorities was significant.
However, the threat persists as many of these jobs are currently supported by government retention schemes and reduced hours, which without a full recovery of Travel & Tourism could be lost.
WTTC, which has continually been at the forefront in leading the private sector in the efforts to restore international mobility and rebuild global consumer confidence, has praised governments around the world for their prompt response.
However, the global tourism body fears governments cannot continue to prop up threatened jobs indefinitely and must instead turn to the sector to help its recovery, so it can power the global economic revival by saving businesses and creating much needed new jobs and saving the millions of livelihoods that depend on the sector.
The report also reveals a shocking loss in international travel spending, which was down 69.4% on the previous year.
Domestic travel spending fell by 45%, a lower decline due to some internal travel in a number of countries.
Gloria Guevara, WTTC President & CEO, said: “We must praise the prompt action of governments around the world for saving so many jobs and livelihoods at risk, thanks to various retention schemes, without which today’s figures would be far worse.
“However, WTTC’s annual Economic Impact Report shows the full extent of the pain our sector has had to endure over the past 12 months, which has needlessly devastated so many lives and businesses, large and small.
“Clearly no one wants to go through what so many have had to suffer during the past difficult 12 months. WTTC research shows the global Travel & Tourism sector alone has been devastated, burdened by an unprecedented loss of almost US$4.5 trillion.
“With the sector’s contribution to GDP plunging by almost half, it’s more important than ever that Travel & Tourism is given the support needed so it can help power the economic recovery, which will be instrumental in enabling the world to revive from the effects of the pandemic.”
The route to recovery
While 2020 and the winter of 2021 have been ruinous for Travel & Tourism, with millions around the world in lockdown, WTTC research shows that if international mobility and travel is resumed by June this year, it will significantly boost global and country level GDPs - and jobs.
According to the research, the sector’s contribution to global GDP could rise sharply this year, up 48.5% year-on-year. The research also shows that its contribution could almost reach the same levels of 2019 in 2022, with a further year-on-year rise of 25.3%.
WTTC also predicts that if the global vaccine rollout continues at pace, and travel restrictions are relaxed just before the busy summer season, the 62m jobs lost in 2020 could return by 2022.
WTTC strongly advocates the resumption of safe international travel in June this year, if governments follow its four principles of recovery, which includes a comprehensive coordinated international testing regime upon departure for all non-vaccinated travellers, to eliminate quarantines.
It also includes enhanced health and hygiene protocols and mandatory mask wearing; shifting to individual traveller risk assessments instead of country risk assessments; and continued support for the sector, including fiscal, liquidity and worker protection.
WTTC says the introduction of digital health passes, such as the recently announced ‘Digital Green Certificate’, will support the sector’s recovery.
The global tourism body also urges governments around the world to provide a clear and decisive roadmap, allowing businesses time to ramp up their operations in order to recover from the ravages of the pandemic.