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After a Long, Hard Summer, Southern Europe’s Long Awaited Tourism Recovery Remains Largely Elusive

Summary:
Global travel is still far from returning to anything like the conditions that existed prior to the pandemic — at least for non-essential travellers. The EU’s covid-19 passport “has been of little benefit” for Spain’s tourism industry, according to Carlos Abella, secretary general of the country’s Tourism Board. “The expected boost to confidence and mobility between countries that the single-page document was supposed to provide has not materialised. On the contrary, each country has set its own rules and that has generated a lot of uncertainty”.  As NC warned back in late June, Europe’s grand reopening risked becoming a bit of a damp squib. Travel restrictions were still in place for many countries, including the UK, where cases of the Delta variant were (and still are) surging. In 2019,

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Global travel is still far from returning to anything like the conditions that existed prior to the pandemic — at least for non-essential travellers.

The EU’s covid-19 passport “has been of little benefit” for Spain’s tourism industry, according to Carlos Abella, secretary general of the country’s Tourism Board. “The expected boost to confidence and mobility between countries that the single-page document was supposed to provide has not materialised. On the contrary, each country has set its own rules and that has generated a lot of uncertainty”. 

As NC warned back in late June, Europe’s grand reopening risked becoming a bit of a damp squib. Travel restrictions were still in place for many countries, including the UK, where cases of the Delta variant were (and still are) surging. 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. But it wasn’t until August that British travellers could finally visit the mainland. Many chose not to.

A Lot Better than 2020 But Still a Lot Worse Than 2019

Spain received 4.4 million overseas tourists in July, according to the National Institute of Statistics (INE). That’s 78% more than last year. But it’s still 55% less than the same month of 2019, back in the old prepandemic days. The overall balance for this year so far is also not overly encouraging. Between January and July 2021, 9.8 million foreigners visited Spain. That’s significantly below the 13.2 million arrivals the country had received by July 2020 — thanks to the two and a half normal months of tourism (January to mid-March) before the first lockdown. It is also 80% lower than the 47.9 million arrivals Spain received in the first seven months of 2019.

In other words, recovery is still a long way off. And that is not good news for a sector that provides around 13% of Spain’s GDP. Last year, foreign tourist expenditure collapsed to less than €20 billion, from €92 billion in 2019. Domestic tourism picked up some of the slack, but nonetheless Spain still ended up suffering the second biggest loss in tourism revenues (-$47 billion) worldwide, after the US (-$147 billion).

As happened last year, domestic tourism has made up some of the difference so far this year. Eighty-eight percent of Spanish residents who travelled this summer stayed local. That is good news for the environment. It also provided vital support for the country’s all-essential hospitality industry, although it was not such good news for travel agents or airlines. And vacationing Spaniards, even with all the savings amassed (by some) over the past 18 months of lockdowns, curfews and travel restrictions, do not have as much disposable income as German, British, Scandinavian, Asian or American tourists.

“Domestic tourism has performed very well, even surpassing pre-Covid levels, above all in coastal areas,” says Abella. “And it has salvaged the summer season, but it does not make up for the fall in international visitors.”

In the absence of overseas visitors Spain’s Tourism Board said it will be impossible to save the industry without a common EU-wide policy on travel requirements for the bloc. Hotels and hostels that have struggled to generate revenues over the past 18 months are going under. Many are being bought by private equity funds. Even in the northeastern region of Catalonia, which has seen the highest occupancy levels this summer, 113 hotels — ranging from small-family run pensiones to big luxury establishments belonging to global chains — have been put up for sale, according to the real estate portal Idealista. Sixty-five of them are in Barcelona.

In other parts of the EU, the summer season was either somewhat better or somewhat worse than in Spain. Cities and regions that tend to attract long-distance travellers have fared worse. A case in point is Rome which has grown to depend on the custom of well-heeled American and Asian visitors. Though travellers from the US, China, Japan and South Korea were on the EU’s safe list for travel to Europe for much of this summer, they have not been coming in anywhere like the numbers of prepandemic years.

“Roman tourism is 80% foreigners, and of those, 80% are Americans and Asians,” says Walter Pecoraro, owner of the Cosmopolita hotel in Rome and president of Rome’s hoteliers association. According to the association, 600 hotels out of 1,200 were open this summer, with an average occupancy rate of 30% to 35%.

In Italy as a whole, a record number of native holidaymakers travelled within their own country. According to a survey by Italian tourism and commerce agency CNA, 23 million Italians chose to vacation at home this summer compared to 17 million in 2020 and 18 million in 2019. But the country only attracted some six million foreign visitors over the same period – far fewer than before the pandemic. 

It was a similar story in France, which had a pretty good summer, according to Sebastien Manceau, a tourism specialist at consulting firm Roland Berger. But this was largely thanks to the French themselves: some 37 million (of a population of 67 million) took vacations this summer, and 85% of them stayed in the country, said Jean-Baptiste Lemoyne, secretary of state in charge of tourism.

Greece Winning the Race

When it comes to luring visitors from far and wide, one country appears to have outperformed all the others: Greece. Despite raging wildfires and surging Covid-19 infections across Europe, Greece managed to surpass the two-million milestone in both July and August, which hasn’t happened since 2019. According to the Greek Aviation Authority, air traffic during the first half of this year was up by 146% on the same period of 2020. But it was still down by 63% on pre-pandemic levels.

It was in midsummer that arrivals began surging. On August 13, the Financial Times proclaimed Greece winner “in the race for tourism recovery in Europe, despite the wildfires afflicting the area north of Athens.” The main reason for the country’s success, according to the FT article, was the effective marketing campaign used to let people around the world know that Greece is open for tourism. Another reason is that Greece recognises the highest number of covid vaccines for travel in Europe. As a consequence, travellers from all over the world inoculated with one of the many vaccines it accepts (see list here) can travel to the country without having to quarantine.

On July 1, the EU introduced a vaccine passport for all of its member states, with the ostensible aim of easing travel within and (in theory) to Europe for EU citizens and residents who are fully vaccinated or have recovered from COVID-19. But the EU (European Union) Digital COVID Certificate programme only relaxes travel to and within the region for recipients of one of the four vaccines approved by the European Medicines Agency (EMA) — i.e., those developed by BioNTech-Pfizer, Janssen (Johnson & Johnson), Moderna and Vaxzevria. Chinese-, Russian-, Indian- and Cuban-made vaccines did not make the grade.

This means that people from places that are not on the EU’s safe list of third-party countries that have received one of these vaccines are barred entry, unless the country they hope to visit has made the necessary exemptions. In the case of Greece, it had made exemptions for six additional vaccines (Sinovac, AstraZeneca – Serum Institute of India, Novavax, Sputnik V, Cansino Biologics and Sinopharm Bip). Countries such as France and Italy made no exemptions whatsoever while Spain allows entry to people who have received Chinese-made vaccinations, since they have dominated vaccine supplies in Latin America, with which Spain has extremely close ties.

New Bans on US Travellers

The bad news is that the good times (in an extremely relative sense) may already be coming to an end, even for Greece. Last week, the EU announced it was dropping the US, as well as five other countries (Israel, Bosnia, Lebanon, Montenegro and North Macedonia), from its safe list. It’s now up to each of the EU’s 27 member states to decide what measures to take, though the message from Brussels is clear: entry for nonessential US travellers should be reconsidered.

Many prime tourist destinations, including Spain and Greece, have so far chosen to ignore the non-binding advice. Just three countries have change the rules so far: the Netherlands and Sweden, which have imposed a quarantine for all US visitors, even those who are fully vaccinated, and Italy, which will require all travellers to show proof of a PCR or antigen Covid test taken within 72 hours of travel.

The ostensible reason for removing the US from the safe list is the surging number of infections in the countries. But there’s also probably an element of tit-for-tat in the decision. The US has kept its ban on European non-essential travel in place since March 2020. European Commission President Ursula von der Leyen warned that the lack of reciprocity would not be allowed to “drag on for weeks.” That was a few weeks ago. 

Over the last 18 months the only way non-essential EU travelers have been able to reach the US is via a third country that is not subject to US travel restrictions. But you have to spend 14 days in quarantine there before being able to continue on to the US.

It’s a reminder that global travel is still far from returning to anything like the conditions that existed prior to the pandemic — at least for non-essential travellers. It may never happen. In the meantime, the pain continues to grow for many companies in the travel and tourism industry, as well as the countries that have grown to depend upon it for the income and jobs it generates.

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