Despite the current difficult situation for the tourism industry, the economic recovery due to inoculation efforts gaining momentum and fewer travel restrictions for vaccinated individuals gives hope to the sector, according to the Institute of International Finance (IIF).
However, the report points out that a relatively fast rebound of the tourism sector would leave many countries in an uncertain position in 2021, both with respect to economic growth as well as external vulnerabilities.
According to IIF, tourism revenues will remain low this year also even in the most optimistic scenario, leading to slower growth in tourism-dependent economies.
The economic recovery in countries dependent on the tourism sector will be slower as external pressures are set to rise on weaker domestic revenues but rebounding imports as economies emerge from pandemic-induced lockdowns.
Global aviation and tourism were among the sectors hardest hit by the pandemic, which led to stringent movement restrictions and border closures that paralyzed ground and air travel.
International air travel is expected to remain weak in the first half of 2021, with just 4 percent of 2019 levels, projected to travel by the end of this year, according to an estimate by Airports Council International.
The agency analyzed three scenarios of the state of the travel industry, depending on when pre-pandemic levels are reached, by the beginning of 2022, the second half of 2022 or early in 2023. Even in the most optimistic scenario, visitor numbers this year would be significantly below 2019 levels, the IIF said.
Under a more realistic scenario of travel recovering later next year or earlier in 2023, tourism numbers are likely to remain 70-80 percent below pre-pandemic levels in many countries this year, the report said.
According to a report by the World Travel & Tourism Council in March, the travel and tourism sector’s contribution to GDP nearly halved last year by falling to 49.1 percent to reach $4.7 trillion (5.5 percent of the global economy) from nearly $9.2 trillion during 2019 (10.4 percent of the global economy).
More than 62 million tourism jobs were lost last year, representing a drop of 18.5 percent, leaving 272 million employed across the industry globally.