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Tourism Will Be One of the Economic Sectors Most Affected by COVID-19 in Latin America and the Caribbean

20 July 2020|News

A new document by ECLAC indicates that the decline in this sector could lead to a drop in GDP growth of 8 and 1 percentage points, respectively, in the Caribbean and Latin America.

The coronavirus pandemic has not only caused a humanitarian disaster, it has also paralyzed several key sectors of the Latin American and Caribbean economy, such as tourism. The World Tourism Organization estimates that international tourist arrivals globally could drop by between 58% and 78% in 2020. A new publication by ECLAC indicates that this sector was one of the first to be affected by the crisis stemming from COVID-19 and it will be among those hardest hit in the region.

The document entitled Recovery measures for the tourism sector in Latin America and the Caribbean present an opportunity to promote sustainability and resilience, which was released today by the United Nations regional commission as part of its reports analyzing and monitoring the COVID-19 crisis, indicates that due to this crisis prompted by the pandemic, international tourist arrivals to the region fell by 50% in March and nearly 100% starting in April. International and national flights have also dropped to almost zero. And in the Caribbean, the cruise industry has been particularly affected.

According to the report, tourism is a key generator of foreign currency, revenue and employment throughout the region. In 2019, it represented 42% and 10% of the total exports of the Caribbean and Latin America, respectively. The tourism economy, which includes both tourism and all sectors that depend on it, represented 26% of total GDP in the Caribbean and 10% in Latin America. In addition, it accounted for 35% of employment in the Caribbean and 10% in Latin America.

The study adds that an impact scenario shows the drop in tourism could lead to a decline in total GDP growth in the Caribbean and Latin America amounting to 8 percentage points and 1 percentage point, respectively, while total employment could fall by 9 percentage points in the case of the Caribbean and 2 percentage points in Latin America.

The region’s countries have adopted measures to mitigate the pandemic’s economic and social effects on tourism and to prepare the sector for recovery, the document indicates. These recovery measures should also increase diversification of the sector and its social and environmental sustainability, the organization states.

In this sense, ECLAC highlights that governments in the region should intensify collaboration to keep cross-border transportation networks as open as possible, to draft joint guidelines and protocols to reestablish trips and tourism, and to foster the exchange of good practices among countries for addressing the crisis and the sector’s future development.