Tourism revenues to remain subdued in 2021: IIF

17 May, 2021 12:00 AM printer

WASHINGTON: Tourism revenues will remain subdued in 2021 even in the most optimistic scenario, resulting in a slower growth in tourism-dependent economies, according to the Institute of International Finance (IIF).

The economic recovery in countries dependent on the industry will be slower as external pressures are set to rise on weaker domestic revenues but rebounding imports as economies emerge from pandemic-induced lockdowns, report agencies.

“While the situation remains difficult for the tourism industry at this point, there appears to be some hope of recovery due to vaccination efforts gaining momentum and fewer (travel) restrictions being discussed for vaccinated individuals,” the report said. “However, we find that even a relatively fast rebound of tourism would leave many countries in a precarious position in 2021, both with respect to economic growth as well as external vulnerabilities.”

Global aviation and tourism were among the sectors hardest hit by the Covid-19 pandemic, which led to stringent movement restrictions and border closures that paralysed ground and air travel. International air travel is expected to remain weak in the first half of 2021, with 1.6 billion passengers – just 4 per cent of 2019 levels – projected to travel by the end of this year, according to an estimate by Airports Council International.

“It is important to recognise that even a relatively fast recovery of international travel in the coming months would leave many tourism destinations in a precarious position,” the IIF said.

The agency analysed three scenarios of the state of the travel industry, depending on when pre-pandemic levels are reached – by the beginning of 2022, the second half of 2022 or early in 2023.

Even in the most optimistic scenario, visitor numbers this year would be significantly below 2019 levels, the IIF said.

Tourism numbers would rebound to just 60 per cent of 2019 levels in Thailand and Vietnam, 50 per cent in Croatia and South Africa, and 40 per cent in the Dominican Republic, Mexico and Turkey if pre-pandemic travel levels were reached this year.