WTTC: SMEs hit hardest in Covid-19 fallout

LONDON, 30 March 2021: The World Travel & Tourism Council’s annual Economic Impact Report (EIR) released at the weekend shows the global travel and tourism sector suffered a massive loss of almost USD4.5 trillion in 2020.

The annual EIR from the World Travel & Tourism Council shows travel and tourism’s contribution to GDP dropped a staggering 49.1%; this compared to the overall global economy, which dropped by just 3.7% 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.

Altogether, the sector’s contribution to global GDP plummeted to USD4.7 trillion in 2020 (5.5% of the global economy), from nearly USD9.2 trillion the previous year (10.4%).

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

However, last year, more than 62 million jobs were lost, representing a drop of 18.5%, leaving just 272 million employed across the industry globally.

These jobs losses were felt across every sector, but SMEs, which make up 80% of all businesses in the travel and tourism sectors, suffered the gravest losses.

The report also reveals a shocking loss in international travel spending, which was down 69.4% in the previous year.

Domestic travel spending fell by 45%, a lower decline due to some internal travel in a number of countries.

WTTC President & CEO Gloria Guevara said: “We must praise the prompt action of governments around the world for saving so many jobs and livelihoods at risk, thanks to various retention schemes, without which today’s 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.”

The route to recovery

While 2020 and the winter of 2021 have been ruinous for Travel & Tourism, with millions around the world in lockdown, WTTC research shows that if international mobility and travel is resumed by June this year, it will significantly boost global and country-level GDPs – and jobs.

According to the research, the sector’s contribution to global GDP could rise sharply this year, up 48.5% year-on-year. The research also shows that its contribution could almost reach the same levels as 2019 by 2022, with a further year-on-year rise of 25.3%.

WTTC also predicts that if the global vaccine rollout continues at pace and travel restrictions are relaxed just before the busy summer season, the 62m jobs lost in 2020 could return by 2022.

WTTC strongly advocates the resumption of safe international travel in June this year if governments follow its four principles of recovery, which includes a comprehensive, coordinated international testing regime upon departure for all non-vaccinated travellers, to eliminate quarantines.

It also includes enhanced health and hygiene protocols and mandatory mask-wearing, shifting to individual traveller risk assessments instead of country risk assessments, and continued support for the sector, including fiscal, liquidity and worker protection.