Among 15 countries most affected by the decline in tourism, Croatia ranks third

Global tourism could lose more than $1.2 trillion or 1.5% of global GDP after nearly four months of disruption due to the coronavirus, and among the 15 countries in the world whose GDP could suffer the most due to tourism losses, Croatia ranks third, according to UNCTAD in a new report.

This UN body for trade and development presents estimates of losses in three ‘scenarios’ regarding the duration of the tourism disruption – for four, eight, and 12 months.

– If the interruption of international tourism continues for eight months, the global loss in that sector could rise to $2.2 trillion, which is about 2.8% of global GDP, while in the most pessimistic scenario, if the interruption lasts 12 months, losses could exceed $3.3 trillion or 4.2% of GDP – estimates from UNCTAD state.

They remind of the significant importance of the travel and tourism sector’s share in global GDP, as well as that tourism is the backbone of the economies of many countries and the ‘lifeline’ for millions of people worldwide, who, as they point out, have more than tripled the values/earnings of tourism in the last 20 years, from about $500 billion to $1.6 trillion.

– Covid-19 has halted long-standing positive trends in global tourism, causing serious economic consequences worldwide. Although tourism is slowly restarting in an increasing number of countries, many still face stagnation, and for many, such as small island nations and developing countries, a collapse in tourism means a collapse in their development prospects – warned UNCTAD’s Director of International Trade Pamela Coke-Hamilton alongside the report.

Jamaica, Thailand, and Croatia are the top three among the 15 ‘most affected’

Analyzing the impacts of tourism losses on its share in national GDP, UNCTAD estimates that Jamaica and Thailand could suffer the largest loss of tourism’s share in GDP, at 11% and 9%, respectively.

In Croatia, this loss, according to their analyses, as they say, moderate estimates, could be 8%, followed by Portugal with a loss of 6%, and the Dominican Republic with 5%.

Among these 15 most affected countries are also Kenya, Morocco, Greece, Mauritius, Senegal, Ireland, Egypt, South Africa, Malaysia, and Spain, and UNCTAD warns that the tourism sector in many wealthy countries will also feel the pressure. They mention, as they say, popular European and North American destinations, including France, Italy, and the USA, which are also forecasted to incur billions of dollars in losses due to the dramatic decline in international tourism.

The problem of reduced employment, especially for women, and falling wages

UNCTAD’s estimates also show that in the hardest-hit countries, such as Thailand, Jamaica, and Croatia, employment of unskilled workers, especially women, could decrease significantly at double-digit rates.

Although they usually make up about 54% of total employment in the global accommodation and food sector, UNCTAD estimates that because they mostly work seasonally and in lower-skilled jobs, they will be laid off sooner, and it is also less likely that they will receive unemployment benefits or others.

Croatia, along with Thailand and Jamaica, is also highlighted for the possible, as they say, fastest decline in wages for skilled workers, in an optimistic scenario by 9% (in Thailand, wages could fall by about 12%, and in Jamaica by 11%).

A call to governments to protect workers and support the recovery of tourism

– Losses in tourism caused by the coronavirus negatively affect other economic sectors that supply goods and services to travelers while they are on vacation, and UNCTAD calls for enhanced social protection in affected countries to prevent the worst economic hardships for people and communities that depend on tourism – they state from the organization.

Calling on governments to protect workers in tourism, they also advise that where some businesses are unlikely to recover, wage subsidies should be designed to help workers ‘transition’ to a new industry.

– Governments should also assist tourism businesses that are facing bankruptcy risks, such as hotels, airlines, and others, and one way of financial relief is loans or grants with low interest rates – states UNCTAD’s report.

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