Europe’s Tourism Industry in the Post-COVID-19 Era

Europe’s travel and tourism industry, which represents 10% of European Union‘s  GDP, is in a nosedive over the coronavirus pandemic. Almost 12% of the EU workforce works in an industry now decimated by travel restrictions put in place to stem the spread of COVID-19 cases.

Grounded flight, cancelled events, closed hotels, museums, restaurants and nightclubs, now lay silent and desolate as lockdowns and other regulations have taken effect both positively and negatively. The European Commissioner of the Internal Market, Thierry Breton says the EU’s tourism economy could contract as much as 70%, and that it may be the last sector to fully recover.

Meanwhile, a survey by Greece’s Institute for Tourism Research and Forecasts (ITEP) published in mid-April showed that 65 percent of hoteliers say they are likely or very likely to see their hotels go bankrupt, while 95 percent of respondents estimate revenues to drop by at least 56 percent this year. Yiannis Retsos, the head of the Greek Tourism Confederation (SETE) says “In general terms, this is an almost lost year.” The executive went on to suggest Greece might have the ability to recover most of the losses in 2021 and return to the record levels of 2018-2019 in 2022.

In Italy, the country’s tourism association said in a statement published on March 30 that the recovery of the market will not take place before the beginning of 2021, and that the pandemic has ruined “some 60 years of tourism.”

As for hard hit Spain, where data released by the National Statistics Institute (INE) showed that tourism in 2018 contributed 12.3 percent to the country’s GDP and accounted for 15 percent of the total labor force, all hotels have been ordered to close no later than March 26.

Exceltur, the organization which represents the interest of Spanish hoteliers, predicted that under the worst scenario where lockdown measures cannot be totally lifted before year’s end, tourism sector could lose 124.2 billion euros (136 billion U.S. dollars) in 2020.

France has had a general drop in demand, linked to traffic and and event cancellations, forced into standstill the hotel and catering sector (minus 90 percent of activity) and tour operators (minus 97 percent of reservations), according to a trend note published in April by France’s national statistic office INSEE.

The French government has launched specific measures to help the tourism sector. Still, most professionals see a darkening business climate: 85 precent of them believe that the crisis will last at least six months, while 80 percent do not expect a return to their activity level within eight to 12 months, or even beyond, said the INSEE trend note.

In addition, it seems unlikely that free travel across Europe will be as it ways before COVID-19, at least in the early stages of recovery. Tourism in most countries would be dominated by domestic travelers once the lockdowns are loosened, according to experts. Didier Arino, director of the French tourism consultancy Protourism, has predicted that with cross-nation travels not to resume in short term, tourism in this summer will be “Franco-French.”

In Austria, there has already been a concrete discussion about when and where to go on a summer vacation. Chancellor Sebastian Kurz announced at a press conference in Vienna: “For my part, I have already made my decision. I will spend my vacation in Austria if a vacation is possible and I can only recommend that Austrians do the same.”

Italian Minister of Tourism Dario Franceschini said this week that it was unlikely foreign visitors will return to Italy in large numbers until next year, and that it could be 2023 before the sector recovers completely. The first wave of tourists, Franceschini said, will be Italians staying close to home.

The minister has unveiled several initiatives to help that along, including a holiday bonus of 500 euros per family earmarked for domestic travel and tax credits for vacation-related expenses. Multiple initiatives are in the works to help soften the economic blow to owners of hotels and restaurants.

“We are making a strong investment in domestic tourism,” Franceschini said in a statement. “This will be a summer of holidays in Italy.”

In Switzerland, the government has so far granted the tourism sector loans and short-time work/unemployment benefits. It is also considering regional promotion programs, which would focus on domestic customers before trying to attract tourists from abroad, according to the State Secretariat for Economic Affairs (SECO).

To promote domestic tourism, Hungary’s Tourism Agency (MTU) has produced a short tourism promotional film targeting local public. Greece has also launched a similar promotional campaign titled “Greece From Home.”

Tourism sector will face a gradual return as a “new normal” emerges before a vaccine becomes available on a mass scale, according to a statement published by the London-based World Travel and Tourism Council (WTTC).

The new normal would include standards and protocols such as social distancing at airports, masks on board, digital check-in, contactless payment, and rigorous hygiene, among other things.

Source: ETN