MIAMI (AP) — With the coronavirus keeping Americans at home during the summer, countries south of the U.S. border are bracing for an economic reckoning from a decline in tourism.
A new repor t Wednesday by the Inter-American Development Bank estimates that some of the most tourism-dependent economies in Latin America and the Caribbean could shrink by as much as 19% as a result of fewer cruise ships, business travelers and student backpackers traveling to the region.
The Caribbean destinations of Aruba, Antigua and Barbuda, the Bahamas, St. Lucia and Dominica are among the top 10 tourism-dependent countries in the world. Even larger, more diversified economies depend on tourism for jobs and hard currency earnings. For example, tourism accounted for about 16% of Mexico's economic output between 2014 and 2018, according to the IDB.
The expected economic shock is unprecedented. While tourism arrivals to the region contracted by as much as about 4% during the global financial crisis, the near-complete shutdown of both air travel and cruise ship activity beginning in March from the global pandemic could lead to declines of anywhere from 40% to 70%, according to the report.
“The COVID-19 shock to tourism in Latin America and the Caribbean represents an unprecedented extreme outlier event,” conclude the report's authors. “Government interventions to support the sector and their citizens must be equally unparalleled.”