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Tourism, the third most important sector for economic recovery

Tourism is the 3rd largest sector at brings money to the economy after fuels and chemicals. Picture: File.

Tourism is the 3rd largest sector at brings money to the economy after fuels and chemicals. Picture: File.

Published Jan 14, 2022


A boom in tourism will immensely help the economy recover from the downward slump we have witnessed over the past two years due to Covid-19.

A recently report released by the United Nations on the 2022 World Economic Situation and Prospects (WESP) shows that tourism is the third most important sector after fuels and chemicals that can help with economic recovery worldwide, and particularly in developing economies, including Small Island Developing States (SIDS).

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After a global contraction of 3.4% in 2020 and a rebound of 5.5% in 2021, the world economy is projected to grow by 4% in 2022 and then 3.5% in 2023. Given its importance as a major export category and recognising its role as a source of employment and economic development, the sector’s recovery is expected to drive growth.

Zurab Pololikashvili, UNWTO secretary-general, said: “The sudden halt in international tourism caused by the pandemic has emphasised the sector’s importance to both national economies and individual livelihoods. The flagship UN 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,” said Pololikashvili.

The latest edition of the 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 plunged by 73% in 2020, the lowest in 30 years. And while tourism did record a modest improvement in the third quarter of 2021, international arrivals between January-September 2021 were still 20% below 2020 levels and 76% below 2019 levels.

The crisis has had a devastating impact on employment, including in hospitality, travel services and retail trade. It also affected vulnerable groups, like youth, migrant workers, workers with lower educational attainment and skills. Exacerbation of the gender divide is also evident, especially in developing countries, with women seeing greater declines in employment and labour force participation than men.

Further the 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 peoples.

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Additionally, the report notes how Small Island Developing States can take steps to ensure local businesses and workers retain more of the economic benefits that international tourism brings.