With 2023 at an end, the Travel and Tourism (T&T) sector is finally positioned to move past the impact of the pandemic, with international tourist arrivals anticipated to reach levels reminiscent of the pre-pandemic era. However, T&T sector stakeholders and destinations are navigating a complex terrain marked by external challenges such as geopolitical and economic uncertainty, inflation and dangers from the proliferation of extreme weather events like wildfires.

Many of these issues represent broader ongoing and longer-term economic, environmental, societal, geopolitical and technological trends. Within this context, consumers, policy-makers and advocates have expressed growing apprehension about the sector’s record on sustainability and its role in issues such as climate change, overcrowding, and overall impact on local communities.

Against this dynamic backdrop, it becomes imperative for the leaders and visionaries of the T&T industry to not only comprehend the impending trends but also acknowledge the sector’s potential to tackle global challenges. When managed thoughtfully, travel and tourism emerge as potent drivers of resilient and sustainable development, contributing to the collective well-being of our planet.

Why travel and tourism have a role to play in future global prosperity

The recently released World Economic Forum’s Global Risk Report 2024 sheds light on the short- and long-term risks that the world faces. According to the report’s survey results, economic and societal risks, such as inequality, inflation, migration, and economic downturns, take centre stage in the next two years, while environmental concerns, including extreme weather events and biodiversity loss, dominate the global risks for the next decade.

Given that T&T accounts for 7.6% of global GDP and close to 300 million jobs, the sector plays a critical role in addressing societal and economic challenges. The sector’s significance magnifies as it empowers small- and medium-sized enterprises, with over 80% of T&T businesses falling under this category. It also plays a pivotal role in employing women, youth, migrants, and informal workers, thereby contributing significantly to economic opportunities.

T&T is also a major driver of global connectivity at a time when geopolitical tensions and conflict are on the rise, while globalization seems to be slowing. In the coming decade, T&T’s role in mitigating socioeconomic risks will only climb, with the World Travel and Tourism Council forecasting T&T sector GDP to grow at nearly double the rate of the broader global economy in the 10 years to 2033, thereby adding more than 100 million new jobs.

On an environmental level, T&T is a key stakeholder in addressing climate change and protecting the environment. The sector is not only affected by these challenges but also contributes to climate change with around 8% of global anthropogenic greenhouse gas emissions stemming from tourism activities.

Therefore, actions in the sector, especially in hard-to-abate segments like aviation, are important to helping meet global climate change targets. Moreover, many destinations’ dependence on nature-based attractions makes T&T a means to generate economic value for protecting nature.

Unlocking travel and tourism’s potential

To unlock the full potential of T&T as a tool for addressing many of the world’s ongoing and future challenges, sector leaders must prioritize sustainability and resilience in their development strategies. 

The Global Future Council on Sustainable Tourism emphasizes the importance of creating standards and metrics for sustainability, cultivating a well-trained and inclusive workforce, prioritizing and engaging with local communities, aligning visitors with destinations carrying capacity and making appropriate investments in relevant infrastructure. 

Achieving these goals necessitates a high degree of collaboration among sector and non-sector businesses, employees, and government actors at national and local levels, including tourism and environmental agencies, civil society, and international organizations.

In the coming months, the Forum, in collaboration with the University of Surrey, will unveil the latest edition of the Travel and Tourism Development Index (TTDI). This index promises to provide a comprehensive understanding of the factors and policies that enable the sustainable and resilient development of the T&T sector. 

Drawing on the latest data encompassing environmental and social impacts of T&T, labour markets, infrastructure, natural and cultural resources, and demand sustainability, the TTDI offers insights into the challenges ahead, the sector’s readiness for risks and opportunities, and how it can be leveraged to address global issues. The importance of T&T for global prosperity will only grow in the years [ahead], creating new opportunities for shared commitment to a sustainable and inclusive future.

Authored by World Economic Forum research and analysis specialist Maksim Soshkin and University of Surrey senior lecturer in tourism marketing and management Marion Karl.

This article is republished from the World Economic Forum under a Creative Commons licence. Read the original article.

The post Perspectives: What is tourism’s role in global prosperity? appeared first on Tourism Ticker.

The post QLDC seeks submissions on diversification appeared first on Tourism Ticker.

The post Tourism rare highlight in tough economy – Westpac appeared first on Tourism Ticker.

The post Canterbury tourism-related sectors positive appeared first on Tourism Ticker.

The post International visitor return strengthens economy – govt appeared first on Tourism Ticker.

The post Tourism supporting demand in subdued environment – Westpac appeared first on Tourism Ticker.

The post Tourism one of four reasons NZ’s economic slowdown moderating – Stephens appeared first on Tourism Ticker.

The post Tourism bolsters Rotorua business confidence appeared first on Tourism Ticker.

The post Staff shortages, rising costs, weather impacts hurting confidence – survey appeared first on Tourism Ticker.

The post Visitor economy one bright spot in NZ’s recession gloom – ASB appeared first on Tourism Ticker.

The post Southern regions rise thanks to tourism – ASB appeared first on Tourism Ticker.

The post Opportunity for tourism to put GDP back on track – TIA appeared first on Tourism Ticker.

The post Tourism recovery boosts transport, economy – Infometrics appeared first on Tourism Ticker.

The post Tourism recovery helps give economy “whopping” boost appeared first on Tourism Ticker.

The post Tourism helps economy rebound, NZ avoids recession appeared first on Tourism Ticker.

The post Marlborough visitor spend, guest nights fall… appeared first on Tourism Ticker.

The post Queenstown seeks economic diversification tenders appeared first on Tourism Ticker.

The post Staffing challenges drive Central NZ business confidence to 16-year low… appeared first on Tourism Ticker.

The post …while Canterbury’s tight labour market biggest business barrier appeared first on Tourism Ticker.

The post Long lead times, recovering market leaves little room to manoeuvre on prices appeared first on Tourism Ticker.

The post Inflation is at a 30-year high but can operators increase their prices? appeared first on Tourism Ticker.

The post Tourism spend up 16% for Hastings appeared first on Tourism Ticker.

The post …but it will boost the regions over summer, especially Otago – Westpac appeared first on Tourism Ticker.

The post Total credit defaults fall in Nov, but rise in Auckland, Northland appeared first on Tourism Ticker.

The post West Coast shrugs off tourism woes to top economic rankings – ASB appeared first on Tourism Ticker.

The post Successful Covid elimination will bring economic bounce – ASB appeared first on Tourism Ticker.

The post Queenstown launches economic diversification campaign appeared first on Tourism Ticker.

The post “Massive” north v south divide as tourism struggles – ASB appeared first on Tourism Ticker.

The post NZ could face a ‘two-speed economy’ – BusinessNZ appeared first on Tourism Ticker.

The post Lack of international visitors dragging economy – Westpac appeared first on Tourism Ticker.

Otago, Southland and Auckland are the regions hardest hit by the collapse in international tourism, according to Westpac’s latest regional analysis.

But tourism in regions such as Hawke’s Bay and Northland have fared relatively well.

The bank’s January Regional Roundup said the regions most reliant on international tourists are finding it the hardest to recover from the pandemic.

“That includes Otago, which has been hardest hit by the loss of visitor arrivals from abroad and faces the biggest economic struggle of any region in the country,” Westpac said.

“While all regions should benefit from a proposed travel bubble with Australia in early 2021, it’s likely to favour those that have been most affected by the loss of foreign tourist arrivals, such as Otago, Southland, and Auckland.”

By contrast, regions heavy on agriculture and forestry were the strongest performing.

“Some of these regions have also benefitted from the fact that they place very little reliance on foreign tourism,” Westpac said.

“Indeed, some have hardly felt the impact of the closure of the border on foreign visitor arrivals, with an increasing number of Kiwis, put off from going abroad, opting to visit other regions instead.

“Of course, that’s not true for places like Auckland and Otago, which have felt the loss of foreign visitor arrivals more acutely than most.”

Otago continued to be “badly affected” by the country’s closed border.

“The lifting of restrictions on domestic travel has only partially helped to offset this loss and, as a result, Otago has been the hardest hit region in New Zealand,” the bank said.

“The loss of visitor arrivals from abroad has been particularly disruptive for places like Queenstown and Wanaka, with many tourism-related businesses being forced to close. Unemployment in the region has risen sharply as a result.”

Dunedin’s education providers were also missing on out on international students because of ongoing border restrictions.

Otago visitor spending

Economic activity in Otago was expected to improve over the coming year.

“However, given its overweight exposure to international tourism, the province is still likely to remain economically weaker than other regions,” Westpac said.

“That said, Otago will be one of those regions that benefits most from the proposed travel bubble with Australia in early 2021.

“The region is also likely to be among those that benefits most from a gradual lifting of restrictions on travellers from other countries later in 2021, although a return to pre-Covid vibrancy in tourism remains some way off.”

Southland was also heavily affected by the loss of international tourists.

“Tourism has been hard hit by the closure of New Zealand’s borders, with a pickup in spending by domestic visitors falling well short of what is needed to offset a drop in international tourists to the region,” the bank said.

“As a result, many firms in tourist-related industries have found themselves under pressure, with several being forced to close.

“Southland is likely to one of those regions that benefit most from the proposed travel bubble with Australia in early 2021. This will deliver a big shot in the arm to the local hospitality industry, especially if it comes in time for summer, when the region traditionally receives most of its overseas visitors.”

Westpac said the loss of international visitors in Auckland was a “big deal for this major tourism region”.

“The subsequent loss of spending has been felt acutely by firms in tourism-related industries, such as travel services and hospitality, some of which have been forced to close with resultant job losses.

“The situation has been made worse by a significant fall in domestic business travel to the region, as well as the loss of international fee-paying students.”

However, tourism had been relatively strong in the Hawke’s Bay and Gisborne, the country’s best performing region overall thanks to its agriculture sector.

“Tourism activity in the region has been less affected by the closure of New Zealand’s borders than in most other regions,” Westpac said.

“Indeed, a big pickup in spending by visitors from other regions in recent months has helped many small businesses, especially those that rely on the tourist trade, to keep afloat.”

Northland had also seen a pickup in tourism spend.

“Increased spending by domestic tourists has easily offset the loss of international tourism, providing a lifeline for many small businesses in the region.”

Download Westpac’s January Regional Roundup here.

The post Southern tourism still suffering most – Westpac appeared first on Tourism Ticker.

The post Tourism, events slump risks $1bn hole for Auckland appeared first on Tourism Ticker.

The post Treasury assumes full border opening Jan 2022 appeared first on Tourism Ticker.

The post Large scale reopening of borders unlikely any time soon – ASB appeared first on Tourism Ticker.

The post What a second lockdown could look like for tourism appeared first on Tourism Ticker.

The post Confidence up but “large economic hole” for tourism – ANZ appeared first on Tourism Ticker.

The post NZ to suffer bigger hit from international tourism collapse – ASB appeared first on Tourism Ticker.

The post Confidence slumps in tourism-dependent regions – Westpac appeared first on Tourism Ticker.

The bank said that Covid-19 would cause a recession in all regions of New Zealand, with the severity in each region and the pace of recovery dependent on the industry makeup.

It added: “Worst affected will obviously be the places that rely most heavily on overseas tourism. That is why Otago faces the biggest economic struggle of any region, and the South Island, in general, will be hit much harder than the North.”

Westpac’s June Regional Roundup presented a gloomy picture of “tourism-dependent” Otago and its outlook given the ban on international visitors, which has taken a toll on accommodation, hospitality, and recreational service and education providers.

“Economic activity in Otago will continue to be severely impacted by a ban on international tourists, making it the hardest hit region in the coming recession, and possibly the slowest to recover,” the bank said.

“Otago should get more domestic visitors and is likely to see an increase in Australian arrivals should a trans-Tasman travel bubble come into existence.

“However, numbers are still unlikely to get close to pre-Covid-19 levels over the coming year and this will weigh heavily on hospitality and retail activity in the region, particularly in the traditional tourist hotspots of Queenstown and Wanaka.”

The report paints a similar picture for Southland, which it predicts is set for a “severe recession in coming quarters and is set for a slow recovery because of the region’s heavy exposure to tourism”. Domestic visitation was unlikely to make up for the “large hole created by the loss of foreign visitors”.

The loss of international tourists is also expected to hit Canterbury’s economy, dampening activity in the region’s hospitality and retail industries, with impacts felt hardest in the Christchurch CBD.

In the Nelson/Marlborough/West Coast region, the West Coast was singled out as being the most vulnerable to the tourism downturn and was forecast to “struggle over the coming year, mainly because just under half of spending by tourists to the region comes from foreign visitor arrivals”.

The North Island is set to fare better than the South, according to Westpac, which picks Wellington and Auckland as having the strongest prospects for the year ahead. They were followed by Bay of Plenty and Waikato, where the impact of border closures is muted by lower reliance on international visitors and where local economies are more diversified.

This was the case for Wellington, where although tourism was expected to struggle, Westpac said it was likely to do so less than other regions because it had a lower proportion of international visitors pre-Covid.

Furthermore, Westpac added that a lack of foreign visitors to Wellington could be partially offset by an increase in domestic travel, with the same said of Waikato, Northland and the Bay of Plenty.

However, in the case of the Bay of Plenty, Westpac added:  “This does not apply to all parts of the region. Places like Rotorua, for example, which focus heavily on foreign visitor arrivals, are likely to be more adversely affected by restrictions placed on them entering the country.”

And despite its expectations of a stronger overall economic performance from Auckland – relative to the rest of the country – it too was still predicted to feel the absence of international tourism “acutely”, with the mooted trans-Tasman bubble only likely to “take the edge off rather than save the day”.

The post Rough recession for tourism-reliant regions – Westpac appeared first on Tourism Ticker.

The post Hospo, tourism hit hard as GDP suffers worst fall since 1991 – Stats NZ appeared first on Tourism Ticker.

The post Consumer confidence lowest since 2009 – Westpac appeared first on Tourism Ticker.

The latest Infometrics Quarterly Economic Monitor showed the first signs of New Zealand’s economic slowdown, said the consultancy’s senior economist, Brad Olsen.

“New Zealand is set to experience the greatest economic shock in a century, and Infometrics expects that 250,000 jobs could be lost in the next year or two,” he said.

Brad Olsen

“The early impacts of Covid-19 are starting to show through in regional indicators and highlight that regional fortunes will be dependent on economic structures, with tourism and construction two obvious areas of weakness.”

Olsen said the latest monitor captured activity for the 12 months to March 2020 and showed visitor numbers and tourist spending on the decline, construction intentions waning and traffic volumes falling.

“New Zealand’s labour market is changing considerably, with more than half the labour force supported by the Government’s wage subsidy,” Olsen said.

“Job losses are continuing to mount as businesses reassess conditions and adjust their operations and workforce to fit the ‘new’ normal. However, the pace of job losses has slowed in recent weeks as the country has emerged from level 4 and then level 3, with this period a lull before the storm.”

Infometrics expected “a second wave of job losses as the wage subsidy runs out, and another wave later in the year as the wage subsidy extension finishes”.

“As well as job losses, fewer hours worked and pay cuts are rising in prominence, reflecting a tougher job environment into the future,” Olsen said.

New Zealand’s food-based primary sector was “holding up well” in the face of domestic and global downturns, which provided the country with a solid economic foundation.

“Dairy and fruit exports remain above 2019 levels, and we expect food exports to remain robust, compared to other commodities, going forward. New Zealand, and the world, needs to eat, and New Zealand producers and manufacturers can provide high-quality food and beverages” Olsen said.

Regional economies with strong food-based primary sector economic activity were likely to weather the economic storm of the pandemic better than others, with tourism and construction-focused regional economies most at risk.

“Regional economies face uncertain times moving forward, with the economy set to structurally change which will see communities and businesses reimage themselves to align with the new state of the economy,” Olsen said.

“But strong regional leadership and rapid response to the economic downturn means that regional New Zealand is putting its best foot forward to get locals working again, and to rebuild an even stronger economy.”

The post 250k jobs could go in ‘greatest shock’ in a century – Infometrics appeared first on Tourism Ticker.

The post Bay of Plenty to escape the worst of Covid-19 impacts – report appeared first on Tourism Ticker.

Writing in LinkedIn, Lauder said that New Zealand had rapidly and sufficiently scaled-up its capability to manage and provide certainty around Covid-19 public health risks, so the focus should now shift to economic and financial risks and there was no longer any reason to restrict widespread freedom of movement.

Richard Lauder

Lauder, who left the Queenstown-headquartered tourism giant Wayfare in March after eight years at the helm, also made a case for rethinking border management suggesting a separation of how New Zealand operated with so-called “clean” countries versus “infected” ones, which could provide much-needed access to tourism and trade markets.

“In New Zealand, we established our Covid-19 Alert Level system, which I think was extremely useful for communicating concepts and educating the masses, but I also think it was constructed for an upward path into lockdown, not for a downward path out of lockdown,” Lauder said.

“On the path to level 4 we regularly strengthened border controls, ultimately moving up to mandatory quarantine. We were also scaling up our testing capacity… scaling up our contact tracing capacity and centralising our tracking systems.

“And we were sorting out communications, public safety systems and detailed assessment of our actual pandemic performance. And we are developing a contract tracing app (presumably we could just copy Australia’s). We were also educating the public on safe behaviour.”

“So today, as we sit in level 3, I would argue our public health risks are significantly lower than they were when we were in level 2 just 6 weeks ago.”

He added that border closures had stopped the source of any virus arriving from overseas, testing had provided a high level of certainty that there was no community transmission, there was full knowledge of active cases and significant daily testing and contact tracing capability.

“Given all these factors, why do we remain so tightly constrained? We have moved from a state of high uncertainty and low capability 6 weeks ago, to one of high certainty and high capability today,” he said.

“Our risk has reduced dramatically, but today we are acting like its worse. I would assert the public health risks today have swung wildly away from a Covid-19 risk to health and wellbeing risks associated with widespread and deep personal financial uncertainty and loss.”

Lauder urged that attention be moved “to where it’s deserved… let’s move forward on the economy.”

“There is no reason to be in level 3, 2 or 1, let’s rewrite the rules based on societal risk and safety today, taking full account of achievements and learnings of the last six weeks. I see no reason why we shouldn’t move back to widespread freedom of movement and economic activity.”

He went on to “break down the bad thinking” on border management.

“We really need to separate our management of borders into how we operate with ‘clean’ countries and how we operate with infected countries. Clean countries are ones that have been successful at heading down a path of elimination like us,” Lauder said.

“They have quarantine of their borders, they have a high level of certainty in their knowledge of every active case and every close contact, have gold standard contact tracing, a large capacity for testing, a high level of societal compliance and have very low numbers of cases in proportion to the population.

“Our uninfected population mixing with their uninfected population creates no more public health risk than NZ staying isolated, so there is no reason not to have open borders with other ‘clean’ countries. In fact, there is only upside as the economic benefits are enormous.”

The post Former Wayfare boss, TIA chair calls for scrapping of alert levels appeared first on Tourism Ticker.

The post Reserve Bank highlights hit to tourism, prompts calls to ease restrictions appeared first on Tourism Ticker.

The five main scenarios, based on assumptions of varying amounts of time under the different Covid-19 alert levels, all assume the borders are closed to inbound foreign visitors. Services exports would take a $16bn hit in the year to March 2021.

Unemployment could range between 13.5% – 26% under the different models released by Treasury today.

“We are seeing dire forecasts for global growth and unemployment levels rising rapidly in many countries. As an open export-led economy, New Zealand will feel these global effects for some time to come,” finance minister Grant Robertson said in a statement this morning.

“The best way to protect the economy is to fight this virus, which is why we’ve acted swiftly and decisively to stamp out Covid-19. This will give our businesses and the economy the best chance to get going again on the other side.”

The Treasury scenarios were guided by a range of previously released public health modelling and included what might happen if the lockdown had to be extended, or if the country had to return to alert level 4 in the future.

Each scenario begins with a deep contraction in activity in the present June quarter, however, Treasury acknowledged the significant uncertainty surrounding the evolution of the crisis.

“What is clear is that whatever path the global and domestic economies follow, the effects of this recession will be severe and long lasting,” said Treasury.

“Activity levels in some sectors, notably international tourism, may take many years to recover. Substantial amounts of income will be irretrievably lost for many businesses and households, and for the economy as a whole.”

Source: Treasury

Scenario 3 limits the ability of the economy to recover in the September quarter and enables only a partial recovery in the following two quarters. Scenario 5 uses the same alert level assumptions as scenario 1 but assumes a larger contraction in world output and a more gradual recovery.

Tresury’s report also showed:

• That unemployment could be kept below 10%, and return to 5% in 2021 with additional Government support.
• Without additional support, unemployment could hit 13.5% under scenario 1 (four weeks in alert level 4), while scenarios requiring more time in level 4 showed a peak of 17.5%-26%.
• New Zealand’s underlying strength could see the economy bounce back to be $70bn larger by 2024 than in 2019.

Work was already well advanced on further fiscal support, Robertson said.

“The Budget is also another important part of the response, and it will include significant support to respond to and recover from Covid-19. As is usual with the Budget, there may well be pre-announcements, especially where they relate to urgent Covid-19 response activities.”

Cabinet would make a decision on whether to exit alert level 4 on April 20.

The full Treasury report can be downloaded here.

The post NZ’s borders shut for up to a year under new Treasury scenarios appeared first on Tourism Ticker.

In its latest economic insight released yesterday, the bank said the New Zealand economy would take a much larger hit than it did during the Global Financial Crisis, despite the efforts of Government to cushion the impact.

“The next 12 to 18 months are going to be tumultuous and there will be winners and losers,” ASB senior economist Mark Smith said.

“The winners will be those that are set up to thrive in a challenging environment. Supermarkets and other essential services are doing a fantastic job in keeping people fed and having their essential needs met.”

Other firms would spot opportunities but a number would have to change their business models.

“There will be a number of industries that have suffered greatly as a result of Covid-19 and the viability of their current business models may need to be tweaked or totally rewired,” Smith said.

When it came to the “new normal”, he saw two potential outcomes longer term.

“First, a return to the status quo, where policy settings are further ratcheted up, growth is being brought forward and the economic can kicked down the road.”

Even so, growth rates would be lower than pre-pandemic times.

“The second outcome would be a fundamental rewiring of the New Zealand and global economies to increase economic resilience,” Smith said.

“It could mean greater restrictions on the movement of goods, people and services. There are additional economic costs to increasing resilience and it will not completely recession-proof the economy.”

Economists at ANZ bank also said yesterday that the coronavirus infection curve should noticeably flatten but the outlook for unemployment was “ugly” and “murky” and the Government’s exit strategy from lockdown was unclear.

ANZ said the unemployment rate could stop short of double digits.

“We expect unemployment to drop more quickly this time… but unfortunately on the other side the usual lag between output rising and a lift in employment is going to be even longer… as uncertainty about the future is extreme,” the bank said.

Unemployment would affect housing, and in turn, retail and service sectors.

Westpac economists in their weekly update said the business finance guarantee scheme, wage subsidy, and mortgage deferrals scheme would allow companies and households to tide themselves over without unduly stressing the Government’s balance sheet.

However, firms would end up in more debt and more focused on reducing it than expansion.

The Government would need to borrow $65bn over coming months and by 2022 the government debt to GDP ratio would rise from 18.5% currently to 40%.

Westpac said the increase was “manageable at today’s low interest rate”.

The post Recovery winners will be “those set up to thrive in challenging environment” – ASB appeared first on Tourism Ticker.

The post Business confidence plunges in March – ANZ appeared first on Tourism Ticker.

The post Long haul for tourism as coronavirus could cost 200k jobs – banks appeared first on Tourism Ticker.

New Zealand could suffer one of the worst contractions due to the Covid-19 lockdown compared to other countries, according to a new report on the impact of the pandemic.

The Organisation for Economic Co-operation and Development’s (OECD) Evaluating the initial impact of Covid containment measures on activity ranks New Zealand sixth among 47 economies in terms of the outbreak’s drag on activity.

The country could see an overall decline in output and spending equivalent to around 29% of gross domestic product.

“Many countries in which tourism is relatively important could potentially be affected more severely by shutdowns and limitations on travel,” the OECD report said.

Greece, which has a large tourism economy, could suffer the most, losing the equivalent of around 34% of GDP.

The most optimistic figure was for Ireland, losing 15% of GDP.

The report said the slump in tourism and retail spending would have the most effect on GDP due to the Covid-19 lockdowns, compared to other sectors.

“Changes of this magnitude would far outweigh anything experienced during the global financial crisis in 2008-09,” the OECD said.

The initial direct impact of the Covid-19 shutdowns could be a decline in output of between one-fifth to one-quarter of gross domestic product in many economies

Consumer spending was estimated to potentially fall by about one-third overall, and some types of spending would decline between 50% to 100%.

“Taken together [including manufacturing decline] the affected sectors account for between 30% to 40% of total output in most economies.”

Travel restrictions and shop closures were likely to result in some categories of spending being cut back completely – package holidays, clothing, footwear, and household furnishings.

Spending involving direct contact, such as car purchases and hairdressing, were also likely to be postponed completely.

Sharp declines were likely for local travel, restaurants, hotels and recreational services, although they would continue to some extent.

“The scale of the estimated decline in the level of output is such that it is equivalent to a decline in annual GDP growth of up to 2 percentage points for each month that strict containment measures continue,” the report said.

“If the shutdown continued for three months, with no offsetting factors, annual GDP growth could be between 4% to 6% percentage points lower than it otherwise might have been.”

Even once lockdowns were eased, the extent of any recovery in output would depend on policies supporting workers and companies, and return of confidence.

For example, service sectors involving travel, tourism, hairdressing, or house purchases, were clearly affected by restrictions on movement and social distancing

In all economies, the majority of this impact comes from the hit to output in retail and wholesale trade, and in professional and real estate services.

“There are also notable cross country differences, with closures of transport manufacturing being relatively important in Germany, and the decline in tourist and leisure activities being relatively important in Italy…the effect of business closures could result in reductions of 15% or more in the level of output throughout the advanced economies and major emerging market economies.”

The implications for annual GDP growth depended on magnitude and duration of national shutdowns, extent of reduced demand for goods and services throughout economies, and the speed of fiscal and monetary support.

In China, the peak adverse impact on output is already past, with some shutdown measures now being eased.

The post Tourism puts NZ near top of worst affected economies – OECD appeared first on Tourism Ticker.