Warning signs are already flashing that the reopening of Europe’s tourism industry may be short lived.
Before Covid-19 brought global travel to a virtual standstill, Europe was the undisputed heavyweight of international tourism. It attracted over 700 million inbound tourists in 2019, contributed an estimated €2.19 trillion to EU GDP and provided as many as 35 million jobs. But much of that money has disappeared and many of those jobs are on hold. Thousands of businesses, particularly small ones, have closed their doors. Many of those that haven’t are barely hanging on.
Between April 2020, when the whole region was in lockdown, and March 2021, when it began to slowly emerge after a long dark winter, the number of overnight stays in the EU slumped by 61% year over year, from 2.8 billion to 1.1 billion, according to figures released on Friday by Eurostat, the EU’s statistical office. The countries hit hardest include many of the southern European countries that were already sledgehammered by Europe’s sovereign debt crisis. Among the EU member states with available data, the sharpest falls were recorded in Malta, where overnight stays fell by a massive 80%; Spain (-78%); Greece (-74%) and Portugal (70%).
Before Covid struck, tourism provided 10% of GDP in France, 13% in Italy and Spain, almost 15% in Portugal and 20% in Greece. But tourism is also heavily localised. In some parts of Spain, such as the Balearic Islands or the Canary Islands, it accounts for roughly one out of every three euros generated in the local economy. The same goes for parts of Greece, Portugal and Italy. A huge chunk of that money disappeared last year, with brutal consequences for the local economy. In Greece GDP per capita lost another two percentage points and now amounts to just 64% of the EU average, having plunged from 95 percentage points since 2009.
The Reopening Begins
But there are hopes that this trend may be stalled, if not reversed, as Europe’s economy reopens. The continent is currently open for unrestricted travel to 15 “Covid-19 safe countries”: Albania, Australia, the Chinese regions of Hong Kong and Macao, Israel, Japan, Lebanon, New Zealand, Republic of North Macedonia, Rwanda, Serbia, Singapore, South Korea, Taiwan, Thailand and the United States. According to a new EU tourism tracker developed by Oxford Economics, the rebound in tourism is already gathering speed. Overall tourism is up 20% on 2020’s anaemic levels and in Europe’s tourism hotspots it’s up 36% on average since March.
But it’s still way down on the 2019 numbers. And warning signs are already flashing that the reopening of Europe’s tourism industry could be short lived.
On Monday, Portugal imposed new quarantine rules on unvaccinated British travellers, placing the UK in the same high-risk category as Brazil, South Africa, India and Nepal. It means that all visitors from the UK to mainland Portugal must now quarantine for 14 days “at home or at a location designated by health authorities” unless they can show that they have been fully vaccinated at least two weeks earlier. Those who haven’t now have to quarantine for 14 days on arrival in Portugal and another ten days on their return to the UK. The rules are set to last until at least July 11.
The tightening of rules on British travellers comes amid a surge in cases of the Delta variant first discovered in India. On Monday Britain reported another 22,868 coronavirus cases, the highest since the end of January, even though more than 60% of the population have received both doses of the vaccine. Covid-19 related hospitalisations and deaths remain extremely low.
The surging cases are largely the result of the Johnson government’s highly controversial decision not to ban flights from India even as the South Asian country experienced its biggest wave of infections. Johnson allegedly sought to curry favor with Indian PM Narenda Modi, whose government is in late-stage negotiations with the UK over a new trade deal. By the time the UK placed India on its red list, the damage had been done. The Delta variant now accounts for 90% of all covid cases in the UK.
Portugal, one of the first EU countries to welcome British tourists, has also seen a surge in Delta variant cases, which now represent half of all infections in the country. This has prompted Germany to place Portugal, alongside Russia, on its list of banned countries for the next two weeks, starting today (Tuesday), as Schengen Visa Info reports:
The move means that aside from citizens and residents of Germany, all other travel from both these countries will be prohibited.
German citizens and residents who reach Germany from June 29 and on will be subject to a fortnight of quarantine, regardless of whether they are vaccinated against the virus or have tested negatively. The option to end the quarantine early with a negative test is not available for these travellers.
According to the head of the RKI, Robert Wieler, the Delta variant is expected to become the dominant strain in Germany by the autumn.
Currently, Germany bans travel from the following countries, which are considered to have a high number of COVID-19 cases:
- Russian Federation
- South Africa
- The United Kingdom of Great Britain and Northern Ireland of the Isle of Man, including the Channel Islands and all British Overseas Territories
Another Ruinous Summer?
Portuguese tourism entities have described Germany’s decision to “red list” Portugal for safe travel as a “drama”. Millions of euros-worth of reservations are being cancelled and German holidaymakers already in the country are scrambling to get home before the Tuesday deadline. In light of the drama, millions of other people in Germany and other European countries who were considering holidaying abroad are now probably having second thoughts.
Fears are rising that this is the beginning of another ruinous summer for Portugal’s tourism industry. President of Turismo do Algarve João Fernandes told TSF radio:
“We know that Austria and Switzerland normally follow the measures of Germany, and that in following the United Kingdom, this position by Germany will have an impact on other markets”.
The decision, announced at the weekend, has already sparked a wave of cancellations which is causing even more pain for the local economy, said Pedro Costa Ferreira, president of APAVT (the Portuguese travel and tourism association):
“There are hotels in the Algarve that opened, hired workers, took workers out of lay-off, bought provisions, made-up beds to accommodate these tourists … and then suddenly someone says none of them are coming and the money has to be returned…”
Banning the Brits
Germany now hopes to persuade its EU partners to take a leaf out of its book and ban British travellers from the EU altogether regardless of whether or not they have had a vaccine. But while France and Italy are on board with the plan, with Macron calling for “coordinated decisions about the reopening of borders to third countries,” it’s meeting stiff resistance from other quarters.
Portugal and Malta have agreed to allow only fully vaccinated British travellers to enter the country without undergoing a two-week quarantine while Spain has demanded that non-vaccinated British travellers provide proof of a negative covid-19 test. But these countries are unlikely to go the full hog and back mandatory quarantine for unvaccinated British travellers. The same goes for Cyprus and Greece.
These countries cannot afford to write off such a vital source of tourist euros. In 2019, the UK ranked as the leading tourist market for Spain, accounting for almost one in every four visitors, as well as Cyprus and Malta. In Greece and Portugal it was the second largest.
That said, one can understand Germany’s reluctance to open the doors to British tourists, given how fast new cases, largely of the reportedly more contagious Delta variant, are rising in the UK. Lest we forget, travel and tourism are two of the most important vectors of contagion in this pandemic. Even widespread distribution and use of the vaccines may not significantly change this dynamic, given that the vaccines do not prevent infection or contagion.
Nor is it such a bad thing that unfettered mass tourism, with all its externalities (overcrowding, noise, environmental degradation, overstretched public services and infrastructure, sky-high rents etc.), should remain on hold for the foreseeable future (if not forever!). As someone who has spent most of his adult life living in one of Europe’s biggest tourist hotspots, Barcelona, I can attest to the fact that less tourism is not such a bad thing.
But for those whose jobs, businesses and rental income depend on tourism, the pain continues to grow. Another summer like the last one will tip many already heavily indebted businesses over the edge. And that will further weaken many of the eurozone’s weakest economies, which will make the eurozone itself even weaker. As such, if Germany and other northern European countries expect the economies of the South to jettison a major source of income and jobs in the midst of a once-in-a-lifetime economic crisis, they should at least be willing to cushion the blow.