Possible COVID-Induced Delays in Tourism Recovery To Cloud DM Growth Outlook, But There Are Differences

• Headwinds to the hitherto slow recovery of the tourism sector have intensified as a sharp increase in new COVID-19 cases is prompting several developed market (DM) governments to reintroduce mobility restrictions, with particularly negative growth implications for tourism-reliant economies. 
• Data from World Bank show that DM tourism revenues expanded steadily over the past 20 years. Tourism revenues rose to around US$1.0Tn (2.0% of DM GDP) in 2019, before dropping to US$240.3Bn (0.5% of DM GDP) in 2020 following the COVID-19 pandemic. 
• Tourism has recovered over 2021, as national vaccination programmes have progressed, facilitating the reopening of regional economies and the resumption of foreign travel. 
• Fitch Solutions believes that tourism revenues will continue rising in 2022 to reach pre-pandemic levels by 2024, although this timeline is somewhat variable. Indeed, new vaccines and therapeutic treatments could accelerate the normalisation of tourism, while new COVID-19 strains or poor vaccine rollouts could ultimately delay it.

(Source: Fitch Solutions)