The tourism sector in the United States will take the biggest hit of any country in the world from COVID-19, with China a distant second, a new United Nations study finds.
A four-month lockdown on international and much domestic tourism as well could cost the U.S. more than $187 billion under the “moderate” scenario calculated in a newly released study by the United Nations Conference on Trade and Development (UNCTAD).
China comes in second, with losses of more than $104 billion, followed by Thailand ($47.7 billion), France ($47.2 billion), Germany ($46.2 billion), Spain ($44.1 billion), United Kingdom ($37 billion), Italy ($34.2 billion), Japan ($30.7 billion) and India ($28.1 billion).
In terms of percentage losses, Jamaica is expected to take the biggest hit, with an 11 percent decline in gross domestic product (GDP) from the shutdown of the international tourism trade, followed by Thailand with a 9 percent decline in GDP, Croatia at an 8 percent decline and Portugal, expected to take a 6 percent hit.
The losses rise steeply under two more severe scenarios covering tourism lockdowns lasting eight months and a year, respectively.
On a global scale, a four-month tourism shutdown could wipe out $1.2 trillion, or 1.5 percent of the planet’s GDP. That rises to $2.2 trillion, or 2.8 percent of worldwide GDP, if the shutdown drags on for eight months, hitting $3.3 trillion, or 4.2 percent of global GDP, if the lockdown lasts an entire year, the UN report finds.
The loss of tourism dollars, in turn, is expected to have an exponential effect, triggering a $3 million drop in national income for every $1 million lost from the tourism shutdown, with a potentially “dramatic” impact on employment, the report warns.
“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,” UNCTAD Director for International Trade and Commodities Pamela Coke-Hamilton said in a press release.
“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,” Coke-Hamilton added.
A top European Union official previously warned the trading bloc could take a 45 percent to 70 percent hit to its tourism economy, with the potential to lose as much as $435 billion.
Selected by Fintech Tube