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Date Published: 21/07/2020

ARCHIVED - Tourism losses could exceed 40 billion euros this summer says Spanish tourism sector

ARCHIVED ARTICLE

The run of seven consecutive annual records for foreign tourist arrivals, which peaked in 2019 with 83.7 million foreign visitors, has ended

<span style='color:#780948'>ARCHIVED</span> - Tourism losses could exceed 40 billion euros this summer says Spanish tourism sector

The Spanish tourism sector has been brutally hit by the Covid crisis and although tourists are once more visible on beaches and in bars, numbers are significantly lower in both the domestic and the international markets, with the sector expecting to continue racking up massive losses until the end of the year.

The summer campaign represents, in general, around 60-70% of the annual turnover of the sector.

Taking the 2019 data as a reference, between June and September almost 47% of foreign tourism revenue for the whole year was recorded (92 billion euros spent in 2019).

The hotel sector estimates that hotel occupancy will only be around 30% this year, according to the president of Exceltur, and CEO of Meliá Hotels International, Gabriel Escarrer, who states that this type of accommodation is the option chosen by the majority (around 65%) of foreigners who normally come to Spain on vacation.

Between June and September 2019, Spain welcomed 37.7 million foreign tourists, who spent 43.147 million euros (43 billion euros) according to the Frontur and Egatur summaries prepared by the National Institute of Statistics (INE). However, the decrease in international visitor arrivals and the contraction of the domestic market could cause losses of more than 40 billion euros for the tourist sector this summer.

The sector lost at least 30 billion during the Covid lockdown period; tourism was effectively frozen in March at 10.6 million arrivals when lockdown began and there were no tourists at all due to the closure of borders until June 21st, a loss of 20 million tourists.

There are two markets, domestic and international, both of which will be affected to varying degrees this year.

International: The June figures for international tourism expenditure have not yet been published, but they will be far from the 9,6 billion recorded in June last year because international borders were closed until the 21st of June this year. Last year 12 billion was spent in both July and August and 9.7 billion in September; the totals this year are expected to be considerably lower.

Domestic: National tourism data recorded by the INE indicates that between July and September last year Spanish residents undertook 61.16 million trips and spent just under 12 billion euros within Spain and 6 billion travelling abroad.

Although domestic tourism will be important this year, the amount spent will decline as many families are opting to take shorter trips due to the fear of being caught up in a Covid-lockdown and are spending less due to the economic backlash of the crisis in employment; surveys carried out by various consultants agree that the decline is likely to be around 50%.

January-September: 70 billion in losses

If the projected losses for the summer are added to the losses already experienced in the first five months of the year, the bill shoots up to over 70 billion euros.

We will have to wait for the evolution of the fourth quarter - when operators believe that international tourism could begin to revive more strongly - to see how the year ends, but Exceltur believes that annual losses will exceed 83 billion euros, 60% of the 140 billion spent in 2019 by domestic and international tourists.

Most affected regions:

The Autonomous Communities most affected by the fall in foreign tourism will be the ones that receive the most visitors: Catalonia lost almost 4.5 million tourists compared to January-May 2019 and 3,6 billion euros; the Canary Islands lost almost three million tourists and 3.6 billion and Andalusia, lost 2.9 million visitors and 2.1 billion euros.

The strongest decline in terms of impact on the economy is that of the Balearic Islands, which went from 3.47 million tourists between January and May 2019 to just over 400,000 during the same period this year, which translates into lower income of 2.8 billion euros.

In this region, around 45% of its GDP depends on the tourism sector, four times more than the national average. In the case of the Canary Islands, tourism GDP is around 35%.

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