## Tourism Trauma and COVID-19

_IMF Blog, August 20, 2020_

## Source details

**Canonical URL:** [Tourism Trauma and COVID-19](https://www.imf.org/en/blogs/articles/2020/08/20/tourism-trauma-and-covid-19)

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## Bibliographic details
- Authors: Cyril Rebillard
- Published: August 20, 2020

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### Overview
- Pandemic-related lockdowns, flight cancellations, and border closures have led to a precipitous drop in tourism with outsized impacts on countries that rely on foreign travelers.
- Costa Rica, Greece, Morocco, Portugal, and Thailand could be among the hardest hit with losses in tourism proceeds exceeding 3 percent of GDP, according to the IMF’s recently released 2020 External Sector Report.
- The analysis focuses on direct tourism impacts on imports, exports, and current account balances and emphasizes medium to large economies; smaller tourism-dependent states could face dramatically larger direct impacts.

### Scenario and assumptions used in the chart
- Assumes gradual reopenings in September.
- Assumes a drop of about 70 percent in tourism receipts and international tourism arrivals in 2020.

### Key quantified impacts and examples
- Thailand:
  - A decrease in tourism could bring the country’s overall exports down by 8 percentage points of GDP in 2020.
  - The direct net impact on Thailand’s current account balance could be about 6 percentage points of GDP in 2020.
  - This could erode part of the 7 percent overall current account surplus the country had in 2019.
- Multiple countries (listed above) could see losses in tourism proceeds exceeding 3 percent of GDP under the scenario.

### Offsetting indirect effects and broader analysis
- The overall effect on current account balances may be less than the projected direct impacts due to offsetting indirect effects.
- Smaller, tourism-dependent countries and larger economies with substantial tourism industries often rely on imports to support tourism activity; a drop in tourism exports and related economic activity will lead to a corresponding drop in imports, which lessens the overall impact on the current account balance.
- Much remains unknown about the pace of tourism recovery in 2020; peoples’ desire and ability to travel abroad may continue to face headwinds going into 2021, leaving an uncertain outlook for tourism industries in economies both big and small.

*Source: IMFBlog — “Tourism Trauma and COVID-19,” Cyril Rebillard, August 20, 2020.*

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## References

- [2020 External Sector Report](https://www.imf.org/en/Publications/ESR/Issues/2020/07/28/2020-external-sector-report)

_Source: https://www.imf.org/en/blogs/articles/2020/08/20/tourism-trauma-and-covid-19_