Maldives saw fifth biggest GDP drop over virus-related tourism loss, new study says

Maldives has seen the fifth highest percentage drop in GDP globally due to tourism loss from the coronavirus pandemic, according to a new study.

Travel and tourism has been one of the main industries to be gravely affected by Covid-19, leaving many countries with no choice but to close its borders to tourists for months due to the global pandemic outbreak. As a result of these travel bans, a number of airlines and tour operators have had to cancel long-awaited holidays, leaving world tourism at an all time low.

Visa Waiver processing firm looked into the biggest revenue losses and highest percentage of GDP lost per country to reveal which countries have seen the greatest financial impact as a result of the loss of tourism caused by the pandemic.

In 2019, global travel and tourism contributed $8.9 trillion to the world’s GDP, yet due to the current pandemic the financial impact of Covid-19 on world tourism has resulted in a total revenue loss of $195 billion worldwide in the first four months of 2020.

According to the study, the Maldives has dropped 6.9 per cent in GDP due to tourism loss from Covid-19, ranking it fifth as the country with the biggest percentage loss in GDP caused by the global pandemic.

Caribbean worst affected in GDP terms

The Caribbean makes up half of the top 10 countries with the highest percentage of GDP loss.

Last year, more than 31 million people visited the Caribbean, and more than half of them were tourists from the US. But with Covid-19 causing travel bans all over the world, the number of tourists that once accounted for 50-90 per cent of the GDP for most of the Caribbean countries has significantly decreased.

Countries within the Caribbean make up 50 per cent of those which have suffered the highest percentage loss in GDP, with Turks and Caicos Islands, Aruba, Antigua and Barbuda, St. Lucia and Grenada all ranking in the list of the top 10 worst affected.

Countries which have lost the highest percentage of GDP due to loss of tourism:

  1. Turks and Caicos Islands: 9.2 per cent
  2. Aruba: nine per cent
  3. Macao: 8.8 per cent
  4. Antigua and Barbuda: 7.2 per cent
  5. Maldives: 6.9 per cent
  6. St. Lucia: 6.2 per cent
  7. Northern Mariana Islands: 5.9 per cent
  8. Grenada: 5.5 per cent
  9. Palau: 5.2 per cent
  10. Seychelles: 4.6 per cent

Major financial impact on Europe

Countries within Europe make up 50 per cent of those which have suffered the biggest losses in tourism revenue, with Spain, France, Germany, Italy and the UK all ranking in the list of the top 10 worst affected.

With a reported drop of 98 per cent in international tourist arrivals in June, Spain is the European country with the largest revenue loss of $9.7 billion.

Just as tourists began returning to the popular holiday destination, a rise in Covid-19 cases meant the UK imposed a quarantine warning against anyone arriving back from Spain as of the end of July. This new rule indicates that Spain’s loss in revenue will continue increasing as tourism slows once again.

France is the world’s most visited country with over 89 million tourists each year, but the impact of Covid-19 has resulted in a total revenue loss of $8.8 billion. This significant loss makes it the third country in the world with the most revenue loss caused by the global pandemic and the second in Europe.

Countries with the biggest tourism revenue loss due to Covid-19:

  1. United States: $30.7 billion
  2. Spain: $9.7 billion
  3. France: $8.8 billion
  4. Thailand: $7.8 billion
  5. Germany: $7.2 billion
  6. Italy: $6.2 billion
  7. United Kingdom: $5.8 billion
  8. Australia: $5.7 billion
  9. Japan: $5.4 billion
  10. Hong Kong: $5.02 billion

“The last few months have undoubtedly been extremely difficult for the travel and tourism industry. In the midst of the global pandemic, many popular holiday destinations have had to close their borders to tourists and the financial impact this has brought on world tourism has not only impacted all countries around the world but also airlines and travel operators,” Jayne Forrester, Director of International Development at Official ESTA, said.

“As travel bans have started to ease off from July, we only hope that we see no more significant losses to one of the largest growing sectors in the world.”

The Maldives reopened its borders on July 15.

With the border reopening, 30-day free on-arrival visa is issued to all tourists who has a confirmed booking for a stay at any registered tourist facility in the country. The entire holiday has to be booked at a single facility except for transit arrangements.

There is no mandatory quarantine or testing on arrival. Tourists have to complete a health declaration form only.

But visitors with symptoms of the Covid-19 respiratory disease caused by the novel coronavirus or those travelling with someone who has similar symptoms are tested at their own expense.

The coronavirus outbreak has hit the Maldivian economy hard, as travel restrictions and other preventive measures affect the country’s lucrative tourism industry, which contributes the bulk of the island nation’s state revenue and foreign reserves.

Before the pandemic, the government had been bullish about tourism prospects, targeting two million, high-spending holidaymakers this year after last year’s record 1.7 million.

However, only 382,760 tourists visited the Maldives before the country closed its borders on March 27. It was a 40.8 per cent decline over the 646,092 that visited the Maldives from January to March last year.

Meanwhile, the government’s best case scenario now puts total tourist arrivals for 2020 just above 800,000. 

Tourism has been the bedrock of the Maldives’ economic success. The $5 billion-dollar economy grew by 6.7 per cent in 2018 with tourism generating 60 per cent of foreign income.

However, the government is at present projecting a possible 13 per cent economic contraction this year — an estimated $778 million hit.

On March 8, Maldives reported its first cases of the novel coronavirus, as two hotel employees tested positive for Covid-19 at a luxury resort in the archipelago.

Eighteen more cases — all foreigners working or staying resorts and liveaboard vessels except five Maldivians who had returned from abroad — were later identified.

A six-case cluster of locals, detected in capital Male on April 15, confirmed community transmission of the coronavirus. Several more clusters have since been identified, bringing the total number of confirmed case in the Maldives to 6,660.

Twenty-six deaths have been reported, while 4,113 have made full recoveries.

The Maldives announced a state of public health emergency on March 12, the first such declaration under a recent public health protection law.

The public health emergency declaration allowed the government to introduce a series of unprecedented restrictive and social distancing measures, including stay-at-home orders in capital Male and its suburbs, a ban on inter-island transport and public gatherings across the country, and a nationwide closing of government offices, schools, colleges and universities.

Non-essential services and public places in the capital such as gyms, cinemas and parks were also shut.

Restaurants and cafes in the capital were asked to stop dine-in service and switch to takeaway and delivery.

A nationwide shutdown of all guesthouses, city hotels and spa facilities located on inhabited islands was also ordered.

The restrictions are now being eased in phases, with the third phase measures now active.

Photo: Veligandu Island Resort & Spa/ Crown & Champa Resorts

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