UN labour agency warns of tourism sector drop due to SARS, economic slump

Reduced travel due to Severe Acute Respiratory Syndrome (SARS) and the ongoing economic slump may cut another 5 million jobs in the battered world tourism sector this year, according to a new analysis published today by the United Nations International Labour Office (ILO).

The report, New Threats to Employment in the Travel and Tourism Industry – 2003, adds that prospects for a recovery are grim, saying "the capacity of the travel and tourism industry to create employment seems to be severely damaged by the recent events." The industry has lost about 11.5 million – one in every 7 workers – tourism jobs since late 2001.

The new estimate dampens optimism that began early in 2003 that the worst of the aftermath of the 11 September 2001 terrorist attacks on the United States might be over. The sector has just weathered a year of virtually flat growth, exacerbated by attacks on tourists in 2002.

The travel and tourism industry represents over 4 per cent of global gross domestic product (GDP), and over 3 per cent of employment worldwide. Counting suppliers and other economic activities related to travel and tourism, the value of the sector can reach as high as 11 per cent of global GDP and 8 per cent of world employment. Prior to the slump, direct employment in the industry's own enterprises amounted to close to 80 million, while including suppliers and other related employment brought the total nearly 200 million jobs worldwide.

The ILO says much of the recent pressure on jobs can be attributed to SARS, especially in Asia and other regions, coming on top the global economic doldrums and other factors such as security concerns. In 2001 the industry suffered disastrously from the 11 September attacks and shrunk by more than 1 per cent, braking the growth dynamics needed to keep employment at its normal level.

On a geographic basis, countries or areas directly affected by SARS such as China, Hong Kong, Singapore, Taiwan Province and Viet Nam may lose more than 30 per cent of travel and tourism employment, whereas neighbours such as Australia, Fiji, Indonesia, Kiribati, Malaysia, New Zealand, Philippines and Thailand will lose an estimated 15 per cent. The rest of the world faces an average 5 per cent loss in tourism employment, the ILO says.

The report warns of long term damage to employment in the sector, noting that "additional factors need to be considered if the slump continues," and adding that the longer the decline in travel and tourism activities lasts, the greater the possibility that jobs will be eliminated entirely.