The chief role that tourism will play in the recovery of national economies and global trade has been highlighted in the latest edition of the “World Economic Situation and Prospects” (WESP) report by the United Nations. Based on data from the World Tourism Organization (UNWTO), WESP underscores the sector’s importance for the world economy and particularly for developing economies, including "Small Island Developing States" (SIDS).
After a global contraction of 3.4 percent in 2020 and a rebound of 5.5 percent in 2021, the world economy is projected to grow by 4 percent in 2022 and then 3.5 percent in 2023, according to the U.N. Given its importance as a major export category (prior to the pandemic, tourism was the third largest in the world, after fuels and chemicals), and recognizing its role as a source of employment and economic development, the sector’s recovery is expected to drive growth in every world region.
UNWTO Secretary-General Zurab Pololikashvili said in a statement, “The sudden halt in international tourism caused by the pandemic has emphasized the sector’s importance to both national economies and individual livelihoods. The flagship U.N. report makes use of UNWTO data and analysis to assess the cost of declining tourism and illustrates just how important restarting tourism will be in 2022 and beyond.”
The 2022 edition of the U.N. WESP report uses key UNWTO data on international tourist arrivals and tourism receipts to illustrate how the pandemic’s impact has been felt beyond the sector itself. International tourist arrivals dipped by 73 percent in 2020, plunging to levels not seen for 30 years. And while tourism did record a modest improvement in the third quarter of 2021, international arrivals between January and September 2021 were still 20 percent below 2020 levels and 76 percent below 2019 levels (full year 2021 results to be released by UNWTO on January 18).
The crisis has had a devastating impact on employment, including in hospitality, travel services and retail trade. It has disproportionately affected vulnerable groups, including youth and migrant workers, besides workers with lower educational attainment and skills. Exacerbation of the gender divide is evident, especially in developing countries, with women seeing greater declines in employment and labor force participation than men.
Further analyzing the sector’s role in economic recovery, the U.N. report notes that many destinations, in particular tourism-dependent countries, will need to diversify their tourism throughout 2022 and beyond. Again drawing on UNWTO analysis, the publication shows how many destinations are developing domestic and rural tourism to help local economies in rural and depressed areas to boost job creation and protect natural resources and cultural heritage, while at the same time empowering women, youth and indigenous people. Furthermore, the report outlines how SIDS can take steps to ensure local businesses and workers retain more of the economic benefits that international tourism brings, noting for example that that “tourism leakage” amounts to an estimated 80 percent of all money spent by tourists in the Caribbean region.
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