A European Summer Without Tourists? The New Reality Sinks In
BARCELONA, Spain—Walk along the Barceloneta and listen to the new normal. Waves push gently against sand. Seagulls make intermittent calls as they glide in circles in a clear blue sky. Cyclists, joggers, and skateboarders flood the boardwalk to take advantage of the brief time during quarantine when they allowed a bit of exercise.
What’s missing is tourists. At the end of the Barceloneta, Barcelona’s iconic W Hotel stands as silent as a shadow. Its dusty entrance is wrapped in police tape.
The scene is repeated over and again in virtually every tourist destination in Europe and illustrates a continent deep in coronavirus crisis. The Louvre in Paris, Rome’s Coliseum, St. Mark’s Square in Venice: all empty. Beaches from France to Portugal are deserted, airports virtually uninhabited. European Union countries have shut their borders to foreign tourists—restrictions that are in force at least until mid-May.
It is not at all clear that they will be relaxed anytime soon. With a few exceptions, much of travel within the E.U. is still generally prohibited. Countries like France, Italy, Portugal and Spain, which are still in the heart of lockdown, don’t even allow travel from one side of the country to the other.
Europe may slowly emerge from its COVID hibernation. Tourism, however, will be the last sector to stir. Thierry Breton, European Commissioner for Internal Market, says that the 27-nation bloc’s $2 trillion tourism economy could slump by as much as 70 percent this year as a result of the crisis. “Tourism was the first sector to be hit by the coronavirus and I am sure that it will be the slowest to recover and come out of this phase,” Breton told a European Parliament committee earlier this week.
Given that Europe’s tourism sector is set to fall into a 400 billion euro crater, Breton’s message was relatively upbeat. In the Czech Republic, tourism revenues are expected to be down 75 percent this year. In Spain, where tourism accounts for 12 percent of gross domestic product, the anticipated drop is 80 percent, or $130 billion. Earlier in April, European Commission President Ursula von der Leyen flatly declared that a summer break was not in the cards. The news was so shocking that the commission chief was later forced to soften her stance, asserting euphemistically that holidaymakers could make the most of “smart solutions to have a summer vacation.”
Yet another hurdle has to do with the economics of getting from one place to another while maintaining social distance. That means restaurants and hotels that are half-full, airplanes where middle seats are empty. Such measures have generated tremendous pushback, especially from low cost carriers whose business model relies on filling each and every seat. Ryanair CEO Michael O’Leary has said his such rules make for a problematic choice between operating at a loss or going out of business altogether. “We can’t make money on 66% load factors,” he said last week.
To make matters even more confusing some international airline carriers are still offering tickets to Europe despite the fact that the vast majority of visitors are barred from entering.
Despite the challenges, countries like Croatia, and the Czech Republic, which have managed the coronavirus crisis fairly well, are seeking ways to encourage tourism while simultaneously fending off a potential second wave of COVID-19.
One solution floated last week in the E.U. by Croatian Tourism Minister Gari Cappelli would be the creation of COVID passports, which would certify the health status of their owners. The World Health Organization and others have said in the past that such a plan may be too risky.
With around 2,000 coronavirus cases and 77 deaths at the time of publication, Croatia has largely been spared the tragedy that has hit places like the U.K., Italy and Spain. But it still suffers the tragic economic impacts of the disease. Tourism accounts for 20 percent of the country’s gross domestic product and the government expects its economy to shrink by 9.4 percent this year. "We will try to reach 30 percent of our tourism receipts from last year, if possible, as we still have a possibility to think about July, August and September arrivals," Cappelli told Reuters
Austria, which has led Europe in lifting quarantine, has suggested it could open its borders to tourists from Germany. But German politicians are wary. “A European race to see who will allow tourist travel first will lead to unacceptable risks,” German Foreign Minster Heiko Maas told Bild am Sonntag. Germany had to bring more than 240,000 stranded German tourists home over the last month and is in no mood to do so again should there be another outbreak.
Meanwhile, Germany has to worry about its own tourism sector going bust. The German Travel Association (DRV) predicted recently that two-thirds of its travel firms could go out of business this year. “It is feared that the majority of the 11,000 travel agencies and over 2,300 tour operators will not survive this existential threat from the corona pandemic, and tens of thousands of jobs will be lost if the federal government does not soon put a protective shield over the industry,” said DRV president Norbert Fiebig.
In France, where 75 percent of holidaymakers choose to travel in-country, the hope is that by encouraging domestic travel, the country can begin to offset the losses associated with the cliff-drop of foreign tourism. Starting May 11, and over several months, businesses, schools and entertainment venues will gradually reopen, with bars and restaurants shut until at least June and sporting events forbidden until September. By the end of May the government will decide whether summer holidays can go ahead.
As with the rest of Europe there is still no talk of international tourism in Spain. The country has outlined a phased zero-to-four-step program out of quarantine with travel between regions as the last step. Barcelona, a major cruise-ship hub, and Madrid have been so hard hit by the country’s coronavirus crisis that they barely qualify for step zero. If all goes well, travel between the 17 regions of Spain may happen after the end of June.
In Portugal, where roughly half of the country’s 16.3 million international tourists come from the U.K., France, Germany and Spain, the government is offering vacationers vouchers to come to Portugal once the country has fully emerged from lockdown. The vouchers, which are meant to encourage travellers to postpone their vacations instead of cancelling altogether, are valid until December of next year and cover any travel bookings between mid-March and September of this year. Meanwhile, the government launched a 1.7 billion euro ($1.8 billion) credit line in March to support the sector, which is expected to lose as much as 1.4 billion euros by June.
Italy still leads Europe with some 28,000 coronavirus deaths. So, despite the fact that the tourist sector generates more than 13 percent of the country’s GDP, don’t expect to be visiting an Italian beach anytime soon. Right now, the country is just beginning to come out of quarantine, so the tourism priority will involve Italians staying close to home.
Let’s just hope that Europe’s Summer of COVID is a one-time affair.
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