tourism

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South Africa to be one of the countries hardest hit by tourism collapse

Tourism: United Nations body says SA will be among the 15 hardest-hit countries in the world. Best case is a 3% reduction in GDP, report claims.

tourism

Image via Adobe Stock

South Africa has been listed as one of the top 15 countries that is being impacted by the near-closure of the international travel industry during the pandemic.

A “COVID-19 and Tourism” report released last week by the United Nations Conference on Trade and Development (UNCTAD) in Geneva, predicts that the country’s economy will lose at least 3% of its GDP as a result of the impact on the tourism industry. In the worst-case scenario, this could result in a GDP reduction of 8%.

The report lists South Africa at number nine on the list of the 15 most impacted countries. It shares ninth spot with a host of countries predicted to suffer the same impact. They are: Mauritius, Senegal, Ireland, Egypt, Malaysia and Spain.

Jamaica will be the hardest hit of all economies

The countries that are predicted to be even harder hit are Jamaica, Thailand, Croatia, Portugal, Dominican Republic, Kenya, Morocco and Greece.

Jamaica is the nation the UN study says will be the hardest hit in the world. With tourism spending making up 20% if the Caribbean island nation’s current GDP, its best-case scenario is an 11% reduction in GDP.

In the worst case, Jamaica’s GDP could reduce by an almost unbelievable 32%.

Thailand, another economy heavily dependent on tourism, is also likely to take a massive hit. Its best-case scenario is a 9% reduction in GDP due to loss of tourism revenue. Worst case is an 18% reduction.

Hit to the global tourism industry a staggering US$3.3 trillion

In all, the UN body paints a grim picture of the massive losses being suffered by the global tourism industry and the impact on national economies. The industry could lose as much as US$3.3 trillion overall, it says.

The projections in the report are based on three possible scenarios: a lockdown lasting four months; a lockdown lasting eight months; and one lasting 12 months.

In those scenarios, revenues would fall US$1.17 trillion, US$2.22 trillion or US$3.3 trillion. This equates to between 1.5-4.2% of the world’s GDP.

The report’s authors do not say which of the three they believe to be the most likely.

Tourism industry is a lifeline for millions around the world

“These numbers are a clear reminder of something we often seem to forget: the economic importance of the sector and its role as a lifeline for millions of people all around the world,” said UNCTAD’s director of international trade, Pamela Coke-Hamilton.

“For many countries, like the small island developing states, a collapse in tourism means a collapse in their development prospects. This is not something we can afford,” she added.