ARCHIVED - Predicted tourism losses in Spain rise to nearly 99 billion during 2020 due to Covid

Exceltur raises its predictions for tourism losses due to the Covid outbreak to € 98,753 million

The organization proposes an extension of the ERTE temporary redundnacy scheme until Easter 2021 to help the sector cope with the anticipated tens of thousands of job losses which will be boright about by an early end to the summer season.

The Covid crisis is wreaking havoc in the Spanish tourism sector, as one blow after another hits activities, locations and different types of businesses, the combination of fear of Covid, measures imposed by the national and regional Spanish governments, as well as restrictions on travel by international governments piling up one on top of another to make viable business activity virtually impossible.

The Alliance for Tourism Excellence (Exceltur) foresees that 2020 will close with a drop in activity (direct + indirect: Tourism GDP) of -98,753 M €, an additional -15,620 M € over and above the -83,134 M € already predicted in June, before the latest resurgence in Covid cases nationwide.

The figure equates to a -64.7% fall in business activity when compared to 2019.

This decrease in tourist activity would explain more than half of the fall of -15.1% of the entire Spanish economy in 2020 according to the higher risk scenario anticipated by the Bank of Spain in June and in line with that foreseen by other official international institutions.

Hence, the latest OECD estimate places Spain as the developed country with the economy hardest hit by the fall in tourism.

84% of this downward revision, both for the summer and for the end of the year, is due to the falls in external demand from the main emitting countries. Virtually all of the Schengen border countries now either recommend against travelling to all or parts of Spain or have placed quarantine or testing restrictions on travellers, leading to a direct fall in demand; the 14 day quarantine imposed by the UK Government, followed by the recommendation of the German Government not to travel to Spain (except canaries) have both impacted heavily on reservations.

Broken down by quarter, they anticipate a fall of -36,638 M € in tourism activity in the third quarter and of - 18,655 M € in the fourth, which will be added to the -43,460 M € already accumulated until June. These data represent falls of -63.3% in tourist activity in the third quarter and -58.1% in the last quarter of 2020 vs. 2019.

Sales and cancellation data point to an early closure of the summer season and as case numbers rise and the enforced closure of nocturnal leisure venues impacts on bookings, the sector can expect many businesses to become unviable once the Spanish domestic season ends, leading to an impact of unprecedented dimensions at the end of the summer on employment.

At the end of July and in the middle of the season, there were already 823,000 fewer employees in the sector (-37.4% vs. 2.2 million in July 2019). According to the SEPE employment services, 517,000 workers are still technically employed through the ERTE scheme although not actively working and 306,000 fewer temporary staff have been employed this summer (-67% in accommodation, -87% in travel agencies, -81% in transport, - 46% in restaurants and -45.2% leisure venues).


Catalonia and Balearic Islands worst affected
Among the impacts for the most relevant tourist regions, the most affected will be Catalonia in absolute values (-19,000 M € of tourist activity and -56% on the levels of 2019) and the Balearic Islands due to their percentage of fall over the previous year (- 80.5% s / in 2019 and € 12,717 million less activity).

These increasingly devastating results place the Spanish tourism sector as the most damaged of all sectors of the Spanish economy as it has not been able to produce, store, or sell its services for months. For this reason, several European Commissioners suggested allocating to tourism throughout Europe no less than 25% of the total funds of the EU Next Generation Plan.

What next?
The sector would like to see an extension of the ERTE temporary redundancy scheme until Easter 2021 as well as other financial support mechanisms.

They also suggest that an urgent and powerful political initiative is needed in Brussels to unify the COVID criteria that regulate the movements of people and tourist flows throughout the EU, recovering the tourist corridors and ensuring the obligation of tests at origin and / or destination that minimize risks as well as a concerted information campaign to ensure the control of information about the safety measures within tourism is properly managed.

And they’d probably also like to add; for the public to wear their masks, abide by hygiene regulations and do everything in their power to reduce the spread of the virus.

Valencia beach GVA.