Global travel, tourism sector loses $4.5tr to pandemic

global travel tourism sector loses 4 5tr to pandemic

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•Lagos okays N1 billion loan grant for local operators
Global travel and tourism sector has recorded an excess of $4.5 trillion revenue loss for Year 2020, which translates to about 50 per cent decline of its yearly turnover.

The Economic Impact Report (EIR) of the World Travel & Tourism Council (WTTC) for 2020, released recently, linked the loss to the devastating impact of COVID-19.

Meanwhile, the Lagos State government has granted N1 billion worth of loans to tourism and hospitality practitioners in the state. The loans were meant to be seed capital to help drive new growth in the sector in the state.

Operators nationwide have estimated billions of naira loss to pandemic lockdown and slow restart of businesses in the COVID-19 era.

EIR showed that the sector’s contribution to global Gross Domestic Product (GDP) dropped a staggering 49.1 per cent, compared to the overall global economy that dropped by just 3.7 per cent last year.

Vast losses run-up during 2020 paint the first full picture of a sector struggling to survive in the face of crippling travel restrictions and unnecessary quarantines, which continue to threaten the urgent recovery of the world economy.

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Altogether, the sector’s contribution to global GDP plummeted to $4.7 trillion in 2020 (5.5 per cent of the global economy), from nearly $9.2 trillion the previous year (10.4 per cent).

In 2019, when global Travel & Tourism was thriving and generating one in four of all new jobs worldwide, the sector contributed 10.6 per cent (334 million) jobs globally.

However, as the pandemic ripped through the heart of Travel & Tourism last year, nearly 62 million jobs were lost, representing a drop of 18.5 per cent, leaving just 272 million employed across the industry globally.

These job losses were felt across the entire ecosystem of Travel & Tourism, with SMEs, which make up 80 per cent of all businesses in the sector, particularly affected. Furthermore, as one of the world’s most diverse sectors, the impacts on women, youth and minorities were significant.

However, the threat persists as many of these jobs are currently supported by government retention schemes and reduced hours, which without full recovery of Travel & Tourism could be lost.

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WTTC, which has continually been at the forefront in leading the private sector in the efforts to restore international mobility and rebuild global consumer confidence, has praised governments worldwide for their prompt response.

However, the global tourism body fears governments cannot continue to prop up threatened jobs indefinitely and must instead turn to the sector to help its recovery, so it can power the global economic revival by saving businesses and creating much needed new jobs and saving them millions of livelihoods that depend on the sector.

WTTC President, Gloria Guevara, commended the prompt action of governments for saving so many jobs and livelihoods at risk, without which the figures would be far worse.

“However, WTTC’s annual Economic Impact Report shows the full extent of the pain our sector has had to endure over the past 12 months, which has needlessly devastated so many lives and businesses, large and small.

“No one wants to go through what so many have had to suffer during the past difficult 12 months. With the sector’s contribution to GDP plunging by almost half, it’s more important than ever that Travel & Tourism is given the support needed so it can help power the economic recovery, which will be instrumental in enabling the world to revive from the effects of the pandemic,” Guevara said.

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Secretary to Lagos State Government, Folashade Jaji, who presented cheques to beneficiaries, noted that tourism and recreation contribute approximately six per cent to the State’s GDP.

Jaji said opportunities for growth that could be strengthened through collaborations between the public and private sectors still abound in the hospitality industry.

She assured practitioners that the government would continue to leverage a meaningful partnership with the private sector towards achieving ‘A Greater Lagos,’ which the governor promised residents.

Commissioner for Tourism, Arts and Culture, Uzamat Akinbile-Yussuf, said the state government had approved a 50 per cent rebate for practitioners in the payment of their operating license fees for the year 2020.

Akinbile-Yussuf explained that each practitioner requesting a loan could get as much as N30 million depending on the size and nature of the business.

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