After years breaking records of visitors and income, tourism in Spain will collapse this year as a consequence of the coronavirus crisis. Spain is the third most visited country in the world and the second in income and will be the fifth most affected by the pandemic behind the United States, China, France and Germany, according to United Nations data.
The UN puts at more than 77,000 million euros the cost of the health crisis for hotels, travel agencies, car rentals or transport, restaurants and others, a figure that Exceltur, the think tank that groups the main tourist companies, raises to 83,000 million. It is not the only havoc. The sector warns of thousands of closings and layoffs if the ERTE are not extended until December.
Tourism is one of the engines of the Spanish economy: it accounts for almost 13% of GDP and employs 2.7 million people, according to INE data. After closed months, the summer season is over and the openings of hotels, restaurants and tourist establishments conditioned to safety, José Luis Zoreda, executive vice president of Exceltur, warns of “the seriousness of the situation and the vulnerability of the sector.” The recent aid plan of just over 4,200 million, of which 2,500 million are in ICO guarantees, is considered late and insufficient. “We do not want loans that make us more indebted, we want direct fund transfers that allow us to save the business fabric as much as possible,” adds Zoreda.
In the same sense, Inmaculada de Benito, corporate director of the Iberostar CEO office, pronounced: “The package of measures that the Government has developed is not proportional to the importance of this industry, it is insufficient. The basic pillars should be flexible ERTE, an adequate fiscal policy with lower taxes and economic measures that inject liquidity ”.
Holidays closer to home
In a context like the one caused by the Covid-19 pandemic and in a scenario of constant change, it is very difficult to make forecasts, but what is clear to the sector is that this summer the holidays will be closer to home. Domestic demand is key to reviving tourism. Flexible rates and hygiene and safety measures are the issues consumers are most concerned about, according to data from a survey conducted by Expedia Group.
Online agencies, specialized portals and search engines such as Expedia, Rumbo, Booking.com, Weekendesk or Lastminute coincide in a certain optimism, encouraged by search and reservation data, where the national tourist demand is gaining momentum.
Inland, coastal and beach destinations are the most popular, while large cities recover more slowly.
Alternative and rural destinations, outside the traditional circuits, accessible by car and that combine nature and open spaces are also more likely to attract potential travelers.
The three main tourism claims, tax cuts –including VAT–, extension of ERTE until the end of the year and not less than 25% of the 140,000 million aids that Spain will receive from the recovery fund announced by the EC –Exceltur figures the rescue plan in 27,000 million to five years -, have been so far ignored by the Government.
With the expected and progressive opening of borders, the sector augurs a summer and a different season where security and confidence will be key to reviving demand, internal first and international later.
To recover tourists, “we must guarantee that our destinations are safe, which is why it is essential to offer health confidence,” says Raúl González, CEO for EMEA at Barceló. “As long as there is no confidence and security guarantee, the restrictions on mobility will not be totally lifted and we will not see the reactivation of demand,” he adds.
Brussels, for the moment, has only authorized the arrival of tourists from the countries of the Schengen area and from 15 other countries, leaving the United States, Russia and Brazil off the list.
83.000 millions of euros
the sector will lose this year as a consequence
of the pandemic
27.000 million euros of
European recovery plan calls for tourism to save itself.
In such a changing scenario, tourism faces multiple challenges, “so great that they make small the challenges we had before February 2020, such as Brexit, the bankruptcies of some tour operators or the increasing competition from the countries of North Africa and the eastern Mediterranean ”, explains Gabriel Escarrer, executive vice president and CEO of Meliá. “The challenges will be of three types: restoring confidence and security in travel and its surroundings; win back a more demanding customer and aware of their social and environmental environment, and maintain efficiency and competitiveness, “he says.
The crisis “has opened many unknowns about the future of tourism, but it also leaves many certainties, such as that companies that have a high capacity for adaptation will have greater options to resist and be more competitive in an adverse scenario”, predicts Ramón Aragonés, CEO NH.
Everything points to the fact that the summer season and the year are insurmountable, but this setback should serve to underpin the main pending subjects, such as “environmental sustainability, digital transformation to gain efficiency, improve the customer experience and diversify the offer of sun and beach ”, concludes Philip Moscoso, IESE tourism expert.
‘Spain for sure’, a campaign that may come too late
Entrepreneurs such as Gabriel Escarrer, Executive Vice President and CEO of Meliá, have complained that “the lack of definition and the cross-corrections between ministries regarding the times and conditions of the de-escalation do not contribute to the reservation of holidays in Spain and benefit competitors such as Greece, Turkey or Portugal. “
These hesitations and the severity of the pandemic in our country have caused significant image damage to Spain that tries to counter the Spain for sure campaign (Spain, sure it is) by promoting the values of our country as a reliable, safe destination and to which they can tourists back.
The big chains have gone ahead creating hygiene and safety seals to regain the trust of customers. We care about you (Barceló), How we care (Iberostar), Feel Safe at NH and Stay Safe with Meliá include a plan of measures to ensure that guests enjoy their stay at any of the open hotels, inside and outside Spain , with total tranquility.