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SA will be among the hardest hit, says UN report – and it won’t be better soon

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  • South Africa will feel the economic impact of the near-disappearance of international tourism more keenly than almost all other countries, according to a new UN report.
  • Tourists will likely prefer to stay close, and go to places with high rates of vaccinated people, says the United Nations Conference on Trade and Development (Unctad).
  • South Africa – far away from key tourist markets and poorly vaccinated – also has a high proportion of unskilled labour involved in tourism.

 


The virtual disappearance of cross-border tourism will have huge economic effects across the world into 2023, according to a new report from the United Nations Conference on Trade and Development (Unctad). And few places will suffer those effects as badly as South Africa.

Measured by both impact on gross domestic product (GDP) and the loss of unskilled labour, South Africa ranked a consistent third across simulations both optimistic and pessimistic. Only Turkey and Ecuador are expected to see bigger GDP drops as a result of the tourism disaster, and only Ecuador and Ireland are expected to see bigger declines in unskilled labour.

For South Africa in particular, things probably will not get better soon. An aversion to travel, and higher costs, may last for some time, the report warns. In the meanwhile, it says, tourist will probably “hesitate to travel long-distance, preferring closer destinations with high vaccination levels.

South Africa is a long way from all major sources of affluent tourists, some of which are expected to see their own, localised resurgences in tourism.

“It is likely that tourism in countries with a high share of vaccinated people will rebound faster than in countries with a low share,” says the report. “Travel within Europe and North America, for example, is likely to pick up faster beginning this [Northern Hemisphere] summer than many developing countries, who are still struggling to get sufficient vaccines and are thus expected to rebound slower.”

Last year was terrible for tourism, with a 84% decline in tourist arrivals measured between March and December 2020. But so far, this year has been worse. The beginning of 2021 has seen an average global decline of 88% compared to pre-pandemic levels.

Government measures to limit mobility played a roles, said Unctad, but so did decisions to stay at home, with people fearing both Covid-19 and being stuck in a foreign country if travel rules suddenly change.

Without tourists, upstream sectors such as agriculture also suffer, said Unctad. So, absent stimulus measures, lost tourist sales mean 2.5 times as big a loss to real GDP.

For South Africa, that means a realistic best-case hit of 6.9%, and a pessimistic forecast of 8.1% of GDP lost.

Among unskilled workers in tourism, job losses are project to be between 8.1% and 11.8%.

 

 

(Unctad)

(Unctad)
(Unctad)

(Unctad)