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International tourism to plunge up to 80% due to virus

The number of international tourist arrivals could plunge by 60 to 80 per cent in 2020 owing to the coronavirus, the World Tourism Organization said on Thursday, revising its previous forecast sharply lower.

Widespread travel restrictions and the closure of airports and national borders to curb the spread of the virus had plunged international tourism into its worst crisis since records began in 1950, the UN body said in a statement.

Tourist arrivals fell by 22 per cent in the first three months of the year, and by 57 per cent in March alone, with Asia and Europe suffering the biggest declines, according to the Madrid-based organisation.

“The world is facing an unprecedented health and economic crisis. Tourism has been hit hard, with millions of jobs at risk in one of the most labour-intensive sectors of the economy,” the body’s secretary general, Zurab Pololikashvili, said.

Airlines have suffered the most since the outbreak began in China in late 2019 with most flights grounded, but hotel groups, cruise operators and tour operators are also reeling.

The UN body had forecast at the beginning of the year that international tourism would grow by 3.0-4.0 per cent in 2020 but then revised its forecast at the end of March, predicting a 20-30 per cent decline.

It now said the full extent of the fall in international tourism will depend on the duration of travel restrictions and shutdown of borders Under a best-case scenario, with travel restrictions starting to ease in early July, international tourist arrivals could fall by just 58 per cent.

If borders and travel restrictions are only lifted in early December the fall would be more on the order of 78 per cent.

If the restrictions are lifted in early September the UN body predicts a fall of 70 per cent.

Under these scenarios, the drop in international travel could lead to a loss of $910 billion to $1.2 trillion in export revenues from tourism, and of 100 to 120 million direct tourism jobs.

While international tourism has taken a hit from the outbreak of disease in the past, the new coronavirus is unprecedented in its geographic spread.

By comparison, international tourism arrivals fell by just 0.4 per cent in 2003 after the outbreak of Severe Acute Respiratory Syndrome (SARS) which killed 774 people worldwide.

The UN body said most experts believe there will be signs of recovery by the final quarter of 2020 but mostly in 2021, with Asia and the Pacific expected to rebound first.

Domestic demand is expected to recover faster than international demand, it added.

“Based on previous crises, leisure travel is expected to recover quicker, particularly travel for visiting friends and relatives, than business travel,” it added.

Companies have restricted employees’ travel while major trade shows have been axed as a result of the pandemic.

Travel experts were more optimistic in Africa and the Middle East, with most predicting a recovery still in 2020. Those in the Americas were the most pessimistic, with half seeing a rebound only next year.

International tourism arrivals rose by 4.0 per cent in 2019 to 1.5 billion, with France the world’s most visited country, followed by Spain and the United States.

The last time international tourist arrivals posted an annual decline was 2009 when the global economic crisis led to a 4.0 per cent drop.

The tourism industry accounts for about 10 per cent of the world’s gross domestic product (GDP) and jobs. Meanwhile, millions more Americans sought unemployment benefits last week, suggesting layoffs broadened from consumer-facing industries to other segments of the economy and could remain elevated even as many parts of the country start to reopen.

The Labor Department’s weekly jobless claims report on Thursday showed initial jobless claims for state unemployment benefits totaled a seasonally adjusted 3.169 million for the week ended May 2, down from a revised 3.846 million in the prior week.

Economists polled by Reuters had forecast 3.0 million claims in the last week compared to the previously reported 3.839 million in the week ending April 25.

The data supported economists’ views of a protracted recovery of the economy, which is reeling from nationwide lockdowns to slow the spread of the coronavirus. The economy shrank in the first quarter at the steepest pace since the Great Recession of 2007-2009.

The weekly claims report followed news on Wednesday that private payrolls fell by a record 20.2 million in April, which set up the overall labour market for historic job losses.

It marked the fifth straight weekly decrease in applications since hitting a record 6.867 million in the week ended March 28. Still, the latest numbers lifted to about 33 million the number of people who have filed claims for unemployment benefits since March 21.

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