Countries that are highly reliant on tourism will face the greatest pressures on their economies as the Covid-19 pandemic reduces tourist arrivals, according to Moody's Investors Service.
The decline in tourism-related revenue and export earnings will weaken the fiscal balance of tourism-dependent economies, especially those with limited resources to absorb the shock, Moody's said in a report on June 22.
"The shock to the tourism sector will matter most for those sovereigns with weak credit fundamentals combined with an elevated susceptibility to event risk," David Rogovic, Moody's vice president, said.
The credit rating agency expects tourist arrivals to decline between 35 per cent to 50 per cent for most countries, with only a partial recovery expected in 2021.
Overall, the Maldives, Bahamas, Belize, St. Vincent and the Grenadines and Montenegro are the most exposed to a coronavirus-induced decline in tourism, Mr Rogovic said.
Globally, the tourism sector has been among the worst affected by the coronavirus pandemic that prompted governments to shut borders and suspend air travel. After several months of unprecedented closures, the sector is slowly and cautiously beginning to restart in some countries. These governments have gradually eased travel restrictions, restored some international flights and imposed hygiene or safety measures.
Fewer tourist arrivals will directly reduce export earnings and weaken the current accounts of tourism-reliant countries, Moody's said.
Countries with structurally large current account deficits and where tourism represents the main source of foreign currency earnings are the most vulnerable.
In most cases, lower foreign exchange outflows amid lower oil prices, the high import content of tourism and lower domestic demand will not offset lower export earnings, the agency said.
A decline in visitors, which is a major source of tax revenue for tourism-dependent governments, will lead to a deterioration in fiscal balances and a rise in debt burdens for most of these sovereigns, the report said.
"The extent of credit pressures stemming from an erosion in fiscal strength will depend on the ability of governments to limit the deterioration in debt metrics in the short term and stabilise and reverse debt ratios over the medium term," Moody's said.
Despite larger primary deficits, most of these countries will see an improvement in fiscal balances that will stabilise debt as growth rebounds in 2021 and borrowing costs remain low.
However, reducing debt burdens significantly would need sustained levels of high growth and substantial tightening of deficits, the report said.
Tourism is a major lifeline for millions of workers and a backbone of many economies.
In April, a busy season due to Easter holidays, the introduction of travel restrictions led to a fall of 97 per cent in international tourist arrivals, according to the United Nations World Tourism Organisation (UNWTO). This followed a 55 per cent decline in March.
Between January and April 2020, international tourist arrivals declined by 44 per cent, translating into a loss of about $195 billion (Dh716bn) in international tourism receipts, the UN body said.
The UNWTO identified three scenarios for global tourism in 2020, which point to potential declines in overall international tourist numbers of 58 per cent to 78 per cent, depending on whether travel restrictions lift in July, September or December.
Overall in 2020, the UNWTO projects 850 million to 1.1 billion fewer international tourist arrivals, leading to a loss of $910bn to $1.2 trillion in export revenues from tourism.
This puts 100 to 120 million direct tourism jobs at risk, the UN organisation said.
Earlier this week Saudi Arabia said it will inject 15bn Saudi riyals (Dh14.7bn/$4bn) into the country's tourism sector through a new fund.
Dubai, where tourism contributes about 11.5 per cent of GDP according to government figures, said it will allow foreign visitors to return from July 7. The emirate had begun limiting non-essential arrivals from March to curb the spread of the coronavirus.
Mohammed bin Zayed Majlis
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COMPANY PROFILE
Company name: Letstango.com
Started: June 2013
Founder: Alex Tchablakian
Based: Dubai
Industry: e-commerce
Initial investment: Dh10 million
Investors: Self-funded
Total customers: 300,000 unique customers every month
Russia's Muslim Heartlands
Dominic Rubin, Oxford
More from Neighbourhood Watch:
UAE currency: the story behind the money in your pockets
What are NFTs?
Are non-fungible tokens a currency, asset, or a licensing instrument? Arnab Das, global market strategist EMEA at Invesco, says they are mix of all of three.
You can buy, hold and use NFTs just like US dollars and Bitcoins. “They can appreciate in value and even produce cash flows.”
However, while money is fungible, NFTs are not. “One Bitcoin, dollar, euro or dirham is largely indistinguishable from the next. Nothing ties a dollar bill to a particular owner, for example. Nor does it tie you to to any goods, services or assets you bought with that currency. In contrast, NFTs confer specific ownership,” Mr Das says.
This makes NFTs closer to a piece of intellectual property such as a work of art or licence, as you can claim royalties or profit by exchanging it at a higher value later, Mr Das says. “They could provide a sustainable income stream.”
This income will depend on future demand and use, which makes NFTs difficult to value. “However, there is a credible use case for many forms of intellectual property, notably art, songs, videos,” Mr Das says.
The specs
- Engine: 3.9-litre twin-turbo V8
- Power: 640hp
- Torque: 760nm
- On sale: 2026
- Price: Not announced yet
Gothia Cup 2025
4,872 matches
1,942 teams
116 pitches
76 nations
26 UAE teams
15 Lebanese teams
2 Kuwaiti teams
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MATCH INFO
Uefa Champions League semi-final, first leg
Bayern Munich v Real Madrid
When: April 25, 10.45pm kick-off (UAE)
Where: Allianz Arena, Munich
Live: BeIN Sports HD
Second leg: May 1, Santiago Bernabeu, Madrid
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Sole survivors
- Cecelia Crocker was on board Northwest Airlines Flight 255 in 1987 when it crashed in Detroit, killing 154 people, including her parents and brother. The plane had hit a light pole on take off
- George Lamson Jr, from Minnesota, was on a Galaxy Airlines flight that crashed in Reno in 1985, killing 68 people. His entire seat was launched out of the plane
- Bahia Bakari, then 12, survived when a Yemenia Airways flight crashed near the Comoros in 2009, killing 152. She was found clinging to wreckage after floating in the ocean for 13 hours.
- Jim Polehinke was the co-pilot and sole survivor of a 2006 Comair flight that crashed in Lexington, Kentucky, killing 49.
Killing of Qassem Suleimani
Top investing tips for UAE residents in 2021
Build an emergency fund: Make sure you have enough cash to cover six months of expenses as a buffer against unexpected problems before you begin investing, advises Steve Cronin, the founder of DeadSimpleSaving.com.
Think long-term: When you invest, you need to have a long-term mindset, so don’t worry about momentary ups and downs in the stock market.
Invest worldwide: Diversify your investments globally, ideally by way of a global stock index fund.
Is your money tied up: Avoid anything where you cannot get your money back in full within a month at any time without any penalty.
Skip past the promises: “If an investment product is offering more than 10 per cent return per year, it is either extremely risky or a scam,” Mr Cronin says.
Choose plans with low fees: Make sure that any funds you buy do not charge more than 1 per cent in fees, Mr Cronin says. “If you invest by yourself, you can easily stay below this figure.” Managed funds and commissionable investments often come with higher fees.
Be sceptical about recommendations: If someone suggests an investment to you, ask if they stand to gain, advises Mr Cronin. “If they are receiving commission, they are unlikely to recommend an investment that’s best for you.”
Get financially independent: Mr Cronin advises UAE residents to pursue financial independence. Start with a Google search and improve your knowledge via expat investing websites or Facebook groups such as SimplyFI.
Our Time Has Come
Alyssa Ayres, Oxford University Press
Volvo ES90 Specs
Engine: Electric single motor (96kW), twin motor (106kW) and twin motor performance (106kW)
Power: 333hp, 449hp, 680hp
Torque: 480Nm, 670Nm, 870Nm
On sale: Later in 2025 or early 2026, depending on region
Price: Exact regional pricing TBA
NBA FINALS SO FAR
(Toronto lead 3-2 in best-of-seven series)
Game 1 Raptors 118 Warriors 109
Game 2 Raptors 104 Warriors 109
Game 3 Warriors 109 Raptors 123
Game 4 Warriors 92 Raptors 105
Game 5 Raptors 105 Warriors 106
Game 6 Thursday, at Oakland
Game 7 Sunday, at Toronto (if needed)
A MINECRAFT MOVIE
Director: Jared Hess
Starring: Jack Black, Jennifer Coolidge, Jason Momoa
Rating: 3/5
The specs
Engine: 2.2-litre, turbodiesel
Transmission: 6-speed auto
Power: 160hp
Torque: 385Nm
Price: Dh116,900
On sale: now
Our family matters legal consultant
Name: Dr Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
Ovo's tips to find extra heat
- Open your curtains when it’s sunny
- Keep your oven open after cooking
- Have a cuddle with pets and loved ones to help stay cosy
- Eat ginger but avoid chilli as it makes you sweat
- Put on extra layers
- Do a few star jumps
- Avoid alcohol
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The specs
Engine: 6.2-litre V8
Power: 502hp at 7,600rpm
Torque: 637Nm at 5,150rpm
Transmission: 8-speed dual-clutch auto
Price: from Dh317,671
On sale: now
Other acts on the Jazz Garden bill
Sharrie Williams
The American singer is hugely respected in blues circles due to her passionate vocals and songwriting. Born and raised in Michigan, Williams began recording and touring as a teenage gospel singer. Her career took off with the blues band The Wiseguys. Such was the acclaim of their live shows that they toured throughout Europe and in Africa. As a solo artist, Williams has also collaborated with the likes of the late Dizzy Gillespie, Van Morrison and Mavis Staples.
Lin Rountree
An accomplished smooth jazz artist who blends his chilled approach with R‘n’B. Trained at the Duke Ellington School of the Arts in Washington, DC, Rountree formed his own band in 2004. He has also recorded with the likes of Kem, Dwele and Conya Doss. He comes to Dubai on the back of his new single Pass The Groove, from his forthcoming 2018 album Stronger Still, which may follow his five previous solo albums in cracking the top 10 of the US jazz charts.
Anita Williams
Dubai-based singer Anita Williams will open the night with a set of covers and swing, jazz and blues standards that made her an in-demand singer across the emirate. The Irish singer has been performing in Dubai since 2008 at venues such as MusicHall and Voda Bar. Her Jazz Garden appearance is career highlight as she will use the event to perform the original song Big Blue Eyes, the single from her debut solo album, due for release soon.
Match info
Uefa Nations League A Group 4
England 2 (Lingard 78', Kane 85')
Croatia 1 (Kramaric 57')
Man of the match: Harry Kane (England)
The specs: 2018 Maxus T60
Price, base / as tested: Dh48,000
Engine: 2.4-litre four-cylinder
Power: 136hp @ 1,600rpm
Torque: 360Nm @ 1,600 rpm
Transmission: Five-speed manual
Fuel consumption, combined: 9.1L / 100km
Adele: The Stories Behind The Songs
Caroline Sullivan
Carlton Books
Specs
Engine: 51.5kW electric motor
Range: 400km
Power: 134bhp
Torque: 175Nm
Price: From Dh98,800
Available: Now
If you go...
Fly from Dubai or Abu Dhabi to Chiang Mai in Thailand, via Bangkok, before taking a five-hour bus ride across the Laos border to Huay Xai. The land border crossing at Huay Xai is a well-trodden route, meaning entry is swift, though travellers should be aware of visa requirements for both countries.
Flights from Dubai start at Dh4,000 return with Emirates, while Etihad flights from Abu Dhabi start at Dh2,000. Local buses can be booked in Chiang Mai from around Dh50
