Covid-19 collapse in travel and tourism costs UK £148 billion

posted on 7th April 2021 by Eddie Saunders
Covid-19 collapse in travel and tourism costs UK £148 billion

By Edward Robertson

The collapse in the global travel and tourism sector thanks to Covid-19 has cost the UK £148 billion and the world $4.5 trillion.

The World Travel & Tourism Council’s (WTTC) annual Economic Impact Report (EIR) shows the UK’s travel and tourism GDP fell from £238 billion in 2019 to £90 billion in 2020 – a decrease of 62.3 per cent.

The fall means the UK’s travel and tourism sector has gone from accounting for 10.1 per cent of the country’s GDP to 4.2 per cent in the space of 12 months.

The fall in revenues has had a knock-on effect, with 307,000 jobs lost in the sector across the country, falling 3.96 million in 2020.

The WTTC admits this could have been far worse without the government’s assistance with the furlough scheme.

However, it adds with 11 million jobs protected by the scheme across the whole of the UK, that could yet change when the scheme is wound down.

The report also revealed domestic visitor spending declined by 63.2 per cent in the UK due to nationwide lockdowns.

International spending fared even worse, because of stringent travel restrictions, ineffective quarantines and constantly changing government policies, causing a fall of 71.6 per cent.

WTTC president and CEO Gloria Guevara said: “The loss of more than 300,000 travel and tourism jobs across the UK has had a devastating socio-economic impact, leaving huge numbers of people fearing for their future.

“But the situation could have been far worse if it were not for the government’s prompt action, which introduced job retention schemes to save millions of jobs under threat and helped to halt the total collapse of the travel and tourism sector.

“There are grounds for optimism if the UK’s world-leading vaccine rollout continues at pace and travel restrictions are relaxed just before the busy summer season – alongside a clear roadmap for increased mobility. With all these factors in place, WTTC predicts the 300,000 Travel & Tourism jobs lost in the UK could return by 2022.

“Our concern is that the government’s courageous move to protect jobs is not sustainable in the long-term. We know tens of thousands of SMEs, which make up the bulk of the embattled travel and tourism sector, are still fighting for their survival, putting at risk the capacity of the country to recover from the crushing impact of Covid-19.

“WTTC believes that another year of terrible losses can be avoided if the government supports the swift resumption of international travel, which will be vital to powering the turnaround of the UK economy.

“Our research shows that if mobility and international travel resumes by June this year, the sector’s contribution to global GDP could rise sharply in 2021, by 48.5 per cent, year-on-year.”

The news comes following research released by the WTTC last week from the same report showing the cost to the global travel industry has been nearly $4.5 trillion.

This equates to a fall in GDP contribution of 49.1 per cent compared to the fall in the entire global economy of 3.7 per cent.

Broken down, this led to a 69.4 per cent fall in international travel spending while domestic fell by 45 per cent.