Tourism in Southern Europe, Accounting for 13%-21% of GDP, is on its Knees. When Will it Get Back Up Again?

The economies are still incredibly fragile, even eight years after the last crisis.

By Nick Corbishley, for WOLF STREET:

The tourism industry is in the “eye of the hurricane”, says Manuel Butler, executive director of the World Tourism Organization. “It was the first sector to be afflicted by the virus crisis and, unlike other crises, is likely to be the last to recover from it.”

Tourist spending across Europe already slumped 68% year-on-year in March, when the lockdowns began to spread across the continent, according to a recent UBS analysts’ note based on data from Planet, the VAT refund provider. “Chinese spend in Europe was down 84.6% y/y, with all other nationalities also declining in March,” the report said.

Italy, the first European country to be hit by the virus and the first to enter full lockdown, on March 10, saw the biggest drop in tourist spending, down 96% year-over-year. Hotel occupancy in Italy also slumped to 4%, its lowest level ever.

Overnight stays in hotels in Spain, which entered lockdown around ten days after Italy, plunged 61% year over year in March to 8.3 million, also the lowest number on record, according to Spain’s National Statistics Institute. In April, the number is likely to be much closer to zero since almost all of Spain’s hotels and other temporary lodgings have been closed since March 26.

Spain’s government plans to gradually relax the country’s lockdown conditions, among the harshest in Europe, on May 10, but there will be little relief for the country’s tourism industry. Spain’s Minister of Work, Yolanda Diaz, said in a statement this week that the sector would not be returning to any semblance of normality until at least the end of the year. While her words infuriated some in the sector, most tourism businesses are grudgingly accepting that the summer season is as good as lost.

Even as lockdown conditions are gradually lifted in places like Italy and Spain, many social-distancing restrictions will remain in place, including rules affecting travel. And consumers, still fearful of contracting the virus while also reeling from the deep economic recessions that are hitting just about every national economy on the planet, are unlikely to travel so far or with such frequency for some time.

“Fear of traveling will probably last longer than the pandemic itself. It’s difficult to expect an immediate recovery of tourism once the lockdown measures are lifted,” said Steven Trypsteen, an economist at Dutch bank ING.

The result is that European cities, towns, islands and beach resorts that were gearing up for yet another summer of unfettered tourism, with all the pros (oodles of money and jobs, albeit of the casual, low paid variety) and cons (sky-high prices and rents, overcrowding, noise, environmental degradation and pollution, overstretched public services and infrastructure) it brings, are now facing their most challenging year since the mass tourism industry came into being, in the post-World War 2 period.

The impact is likely to be particularly brutal for Southern European economies, which all share the following three features:

They all depend enormously on tourism. In Spain the sector accounts for 15% of GDP; in Italy it’s 13%; in Portugal it’s 18%, and in Greece it’s 21%. Travel and tourism also provide as much as 26% of jobs in Greece. While huge, these are still macro-level numbers. When you drill down to a more local level, there are many regions, such as Spain’s Canary Islands, for whom tourism represents one-third or more of the local economy. Within those regions in Southern Europe, there are thousands of towns and villages that depend almost entirely on tourism for jobs and income.

They are still incredibly fragile, even eight years after the last crisis. The Italian and Greek economies are still smaller than they were before the 2008 global financial crisis. Spain’s economy has rebounded more robustly but even after six and a half years of growth, its official unemployment rate was still barely below 15%. Now, it’s about to explode well above 20%, for the fourth time in 30 years.

They already have some of the highest levels of public debt on the planet. In absolute terms, Italy has the second highest level of public debt in Europe, at €2.44 trillion, the equivalent of 138% of GDP. Portugal’s public debt-to-GDP ratio is 122%, Spain’s is 95.5% and Greece’s is 176%. With the IMF forecasting GDP drops this year of 9.1% for Italy, 10% for Greece and 8% for Spain and with government expenditure set to explode in the coming months, those public debt ratios are likely to increase at an even faster rate than before.

This is one of the reasons why the EU’s internal market commissioner Thierry Breton wants Europe’s tourism sector to be first in line for EU recovery funds. Without direct help, the tourism economy could slump by up to 70% this year, Breton warns. Once EU leaders finally agree on the relief funds package, actually getting the money to the small businesses that most need it is not going to be easy. Even in a best-case scenario, almost one-third of jobs in the European tourism sector will be destroyed, at least in the short term, says Jennifer Iduh, head of research at the European Travel Commission.

For hotels, the pain has already begun. Europe’s largest hotel group, Accor, which owns brands such as Ibis and Movenpick, said that first-quarter sales fell 17% to €768 million, while like-for-like revenues were down 15.8%, excluding currency moves and acquisitions. The results are likely to be a whole lot worse in April and May, given that the economies of 92 of its 112 global markets are under some form of lockdown.

“In Spain, a progressive lifting of the [tourism] sector’s lockdown from here to December will result in total losses of around €124 billion. That will be devastating for the hotel sector,” said Gabriel Escarrer, chief executive of Meliá, one of Spain’s biggest hotel groups.

Some Spanish hotel groups are urging the government to facilitate mobility by quickly rolling out an immunity passport, which will show whether someone has already suffered from Covid-19 or not. But that will take time to put in place and it raises a host of prickly practical, legal and ethical questions.

In the meantime, Southern Europe’s one remaining hope is that the domestic tourism market will pick up some of the slack this summer. To help make that happen, local authorities and businesses are working around the clock to make their towns and businesses as covid-proof as possible.

But tourists will have to get used to “a whole new way of travel”, says the Canary Islands’ Councillor of Tourism, Yaiza Castilla, adding that everything associated with holidays will need an urgent redesign, including hotels, transport, leisure products, shops and the way tourists are supervised at their destination. As part of this, incoming visitors may be required to install an application on their cellphones that will allow authorities to track their every move.

If everything goes to plan and the gradual lifting of the lockdown does not precipitate another surge in cases, and national residents don’t balk at the idea of being constantly tracked, traced and controlled during their holidays, Italian tourists may have the magic of Venice, Florence and Sienna all to themselves this summer. Likewise, the local residents of Barcelona and Palma de Majorca may finally get what they have long wished for: a city that is not completely dominated by and tailored for foreign tourists.

But they could also end up getting a lot more than they had bargained for. If the virus does come back with a vengeance once the restrictions are relaxed, necessitating yet another lockdown, or if the domestic market does not pick up the slack as cash-strapped national residents decide to vacation at home or in their ancestral villages, the impact on the region’s most important and (until a couple of months ago) fastest growing economic sector will be even more brutal than is currently feared. By Nick Corbishley, for WOLF STREET.

Due to “the interconnectedness of the financial system” fund gatings can trigger “contagion risk” with “the potential to become a systemic issue,” warns Fitch. ReadMarket Mayhem Meets Liquidity Mismatch: “At Least” 76 Mutual Funds in Europe Were “Gated” in March

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  98 comments for “Tourism in Southern Europe, Accounting for 13%-21% of GDP, is on its Knees. When Will it Get Back Up Again?

  1. Sara Rancano says:

    This is going to be absolutely devastating for, Spain. I doubt whether Spain will come back for at least another 5-7 years. By the end of the year many hotels will be out of business so even if tourists do want to come there will be no where to stay.

    & what IF Wolf, we get a real financial crisis with financials actually go bust? I cannot believe we have seen the end of this financial crisis, if only printing money was the answer to ending all crisis!!!

    I wonder what is the probability of a world conflict? Venezuela? China/Taiwan? Iran?

    • Markus says:

      Don’t worry about Spain as a tourist destination. Europeans (myself one) like Barcelona and Palma de Mallorca.
      The big question is how to get there…. and to Amsterdam, Berlin, Hamburg and Prag . The top cities for week-ends.
      When will there be any flights and at what costs?

      • Eugene says:

        One can just drive[up to 4 hours is o.k].A perfect social distancing also .As for US turists,not possible to rent a car I guess.TURISM for very rich,as before 1960.AND NYC FOR THE RICH ONLY,FINALLY.

    • Joe Saba says:

      well one has to thank EU masters for making this ‘seasonal’ businesses in south
      euro made germany master of eu world – virtually all manufacturing is done in their automated plants
      and they sell to rest of eu peasant countries
      not to worry – either germany foots bill or gets booted out
      anyway you look at it eu is toast

      • Argus says:

        Certainly the Schengen agreement has fallen apart, as countries closed their borders unilaterally to try to cope with the virus. The notion of mutual aid in a time of crisis didn’t pan out either. The Three Musketeers they ain’t (“all for one and one for all”). It seems to me that all that holds the EU together now is the euro prison and the overpaid Brussels crowd fanatically clinging to power.

        • char says:

          This is not the death of Schengen, States have also erected internal boarders. China also closed internal provincial boarders

    • Morty Mc Mort says:

      I keep thinking.. why would I want to spend money on travel, or restaurants or shopping (other than for necessities, under these conditions? – I go to a restaurant, for example (Used to) in order to relax and ENJOY myself! – What is enjoyable about dealing with a paranoid, environment, with miserable owners and staff, serving half the number of patrons, wanting to “spray me down” with disinfectants’ for the Privilege of eating overpriced, crappy food??????
      Sorry – Cancel my reservation!! and for everyone thinking they are smart, by ordering take out…. ha ha ha.. you have never worked in a restaurant!! – Most Kitchen staff, will willingly sabotage a meal, or negligently contaminate it… don’t get me started (the things I have seen!!)

    • Mike says:

      I am not surprised as to tourism. See Venice and die! See Paris and die! There are no great slogans available. :-)

      If you want to get into an airplane, which might have this potentially airborne coronavirus from an infected crew member or passenger or maintenance personnel, to go there, put that trip last in your bucket list and get funeral expenses insurance. :-)

  2. Joe says:

    Hi Wolf

    I very much enjoy your perspective and opinions but without having much needed facts(which much of our media is poor in reporting), you do occasionally make mistakes.

    This for profit at all costs and corrupted governance by all levels of our politicians, the senior population and mismanagement ran rampant. 

    When this Pandemic hit, our governments were slow to respond or even be ready due to this just in time manufacturing process and gave away much of our protective equipment to China. Add to this our government throwing out millions of expired medical equipment (by manufacturer date) and both the US and China stopping delivery of this much needed equipment and now delivery of defective equipment by China.

    The healthcare workers to make a decent living were going from seniors homes to seniors homes even when they too were infected with this virus. Many places were not ready or expected this virus and had no protective wear to wear.

    Ontario and Quebec have a serious problem right now with so many seniors homes and healthcare aids sick and death. A few of these were absolutely decimated with rampant infections and healthcare aids walking out as other getting sick from no proper equipment.

    Now the military has been called in as many aids are sick or refusing to work without proper protection.

    Just thought you should know what is currently happening. 

    By the way, we are being hit with a double whammy of deflation of everything and inflation of food and healthcare products.

    Take care and stay healthy,

    • Joe says:

      This is why Canada is locked down tight. We have no protective gear in stock. Currently trying to make some. 2 planes sent to China were turned back empty.

      • Paulo says:

        (warning to other readers…response to comment off topic)

        Joe,

        We are all running on 20/20 hindsight and would have done many things differently if we could have a do-over. This applies to the countries listed in Nick’s article, for sure Canada, and most likely, everywhere. Your reporting on Canada’s problems is focused on the ongoing issues of Quebec and Ontario. Sask is starting to reopen on May 4th. BC a little later, and although the curve has flattened ,with recent outbreaks in 2 poultry processing plants and several care homes, our Provincial Health Officer is taking a go slow approach. It is now illegal for care workers to work at more than one facility, and their wages have been topped up to make it work for them. The poultry plants are being evaluated and will be forced to adopt different work standards.

        BC actually has enough protective gear, enough ventilators, and almost 4,000 spare hospital beds for a just in case. Elective surgeries are being rescheduled and planned for as I write this. This also applies to Alberta and Sask. Alberta was extremely well prepared and is forwarding much of their excess protective gear to Ontario and Quebec.

        The BC pandemic effect/results are almost a mirror image of S Korea as far as stats go and what the infection graphs look like. However, we do need more testing before we can ease into opening. Despite the decent results to date, all large gatherings are still canceled well into the fall, including all festivals, concerts, and the August PNE. Schools will be reopened in May with 1/2 the students attending alternating days, although details are still being worked out. Currently, many elementary schools are functioning as day cares for front line workers in the medical community, and for first responders. The child supervisors are educational assistants and many are pretty concerned about returning to work this early.

        Regarding the article and tourism, we won’t see any out-of-province tourists until the virus is cured. Locals are being encouraged/told to stay home and even our coastal ferries are down about 95%. The big looming problem will be the May long weekend, and whether or not people will still comply with stay home directives. However, many other businesses are still open here. In fact, I am picking up some specialized auto parts next week. I have already paid by email transfer and the parts will be waiting for me when I arrive at the business. Their shop is still working on customer’s cars. My friends are still working construction and my son is still working in the Oil Sands performing maintenance. My neighbour is falling trees today and the logging trucks are hauling. There is a tow boomed up waiting for a tug in the basin where we launch our fishing boats.

        It is said tourism will be non-existent here, as well as all linked and relying business, until there is a vaccine. The whale watching boats are docked, and the hotels are closed until further notice. Restaurants are closed except for take-out. With tourism, the conclusion is that there is no safe way to allow it, and even if you could once again welcome visitors, who in their right mind would take a chance getting infected just to take a holiday?

        I cannot imagine having my job/living wiped out in the space of 1 month, with no end in sight. Tourism may never come back and somehow these people will have to be helped as they transition to something else. All our economies will most likely change into something entirely different going forward. regards

        • Anton says:

          I find it interesting that the most liberal provinces were the least prepared and most incompetent in planning. The trudeau government sent our mask and gown supply to china early own without thinking that later we might need it. Not to mention the destruction of a large cache of stockpiled medical supplies just before the outbreak. Very poor planning indeed.

        • char says:

          Sending out help was right, better to stop it there than here. Also the less people get it the less the virus mutates into different forms and the easier it is to make a vaccine. That is why Americans behavior in Iran was so unforgivable.

  3. Tim says:

    As someone who has travelled alot, who has been fortunate enough to do so, I hope you will join me in sparing a thought for the staff of everywhere you and I have stayed.

    It’s easy to be critical if somewhere that just was not what your mood on that day wanted.

    But I hope that these guys and girls running places I’ve stayed in are still around in the future to put up with cranky guys like me.

    I generally do say thank you. Perhaps I should have said it more often.

    • Dos Tacos Mas says:

      “But I hope that these guys and girls running places I’ve stayed in are still around in the future to put up with cranky guys like me.”

      Roger that! We have met so many kind and generous people on our travels and I certainly hope they are managing to keep going in these troubled times. I/we have always tried to say “thanks” and not be “that guy”. Just wish we could get our “leaders” to do more of the same…I can dream, can’t I?

      • Tim says:

        Exactly.

        I have a Glaswegian friend who has an great phrase:

        ‘Nobody likes a Dick…’

  4. Tonymike says:

    Welcome to the future Panopticon.
    Software to watch where tourist move? Immunity passport?
    I guess that I won’t be travelling as much this year as I did last year, but I will use my time to move permanently from this madness.
    Yes, Yes, where will you go? I already have many places in mind that don’t resemble a fascist serfdom.
    Cheers!!

    • MC01 says:

      The so called “immunity passport” is proof of how blissfully ignorant Italian and Spanish politicians are. There’s absolutely zero proof right now that those testing positive for antibodies cannot transmit the disease around and it seems these antibodies don’t even develop in all people who were diagnosed with Covid-19 and have since recovered.
      And let’s not forget the presently available tests are strictly experimental and, just like early Covid-19 swabs, still not particularly reliable.
      Italian politicians, especially in the North, have been running their mouths about these tests for weeks now like they are some kind of panacea (they are rumored to cure baldness) but fail to understand what these tests are for. First, discover if people diagnosed with Covid-19 and who have since recovered have developed antibodies and second, to identify more potential blood donors for the experimental plasma infusion treatment for critical patients presently being trialed in Pavia.
      There’s a very good reason Germany has chosen to fast-track vaccine development and has left antibody-serum tests where they belong: in the hands of epidemiologists.

      And about tracking people… the usual well-connected Italian software firm unveiled a tracking app on Monday to much fanfare. Less than 8 hours later a team of students from the State University of Milan, working from their homes, announced they had already cracked the app and found it to be “an extremely serious privacy and security liability”.
      This is not the Panopticon State, just the Pork Barrel State. ;-)

      People not living in countries like France, Italy or Spain have no idea we had to live with these genius ideas well before the virus striked. Our politicians are not merely running their mouths non-stop, especially about stuff they don’t understand, but are the most easily swayed in the world. No need to hire expensive lobbyists here, just post it on FaceBook, have a newspaper run a piece about it and politicians will fall all over themselves to show how much they support your poorly designed app or experimental test and how much they want to make it “compulsory”.
      There’s a very good reason in our countries one needs to develop cynicism at a very early age.

      • Realist says:

        I admit that it is seldom indeed that I’m impressed with the actions of leaders and other politicians, but the thunder the other day from Berlin did impress me.

        Ok, you have to keep in mind that Merkel was a pure scientist before entering politics, something that sets her a world apart from other leaders in the way to deal with facts, but her message with a clear fact based realism was something that other leaders ought to pay attention to and ordinary people, too. In its way, her speech was worthy of Churchill’s best ones.

        • MC01 says:

          I am under the distinct impression without Angela Merkel’s actions over the past week our governments would have never (reluctantly) conceded defeat and started reopening our countries. I feel her actions had more to do with patience finally running out than any sort of education or background (I am a humble chemist myself): the Italian and Spanish governments rightly fear what will become of them once the lockdowns are over and desperately wanted to extend them.

          Both governments handled the crisis terribly, not so much because they failed to stop the epidemic (nobody could, at least not after China and the OMS willingly misled us; another story for another day) but because they have nothing to show but piles of dead bodies for crippling their economies and, much more critically, because of their horrible PR.
          Heads will finally roll this time, and we have Angela Merkel to thank for it.

        • char says:

          You can test&track or lockdown or fail. I don’t see Italy or Spain do test&track so lock down it is. It is also not clear if lockdown is more expensive than test&track, but it is much cheaper than failing.

      • Jos Oskam says:

        @MC01

        As a Dutchman who moved to France, I can confirm that you are spot on. A personal anecdote to affirm this:

        I lost my naivete vs the French media some time ago, when I had been away for a few weeks, and the daily newspapers had piled up in my absence. Before throwing them out I quickly scanned the headlines to have an idea what was going on.
        I was kind of surprised to notice that at least 95% of the screaming headlines about ambitious plans, radical changes, new laws and regulations, jawboning politicians and government actions faded into nothingness within a few days, never to be heard of again.
        If I had read the newspaper each day, I would probably have been annoyed, angry, afraid, uncertain or generally uncomfortable with the news. Reading it a few weeks after the fact and seeing there was almost no follow-up brought home to me that most of these issues were simply fads. Something I wasn’t used to from the serious newspapers in the Netherlands…which is not to say that these are perfect or blameless!
        Nevertheless this experience has opened my eyes and made me more critical of what the media are feeding me. And yes, it has made me more laid-back while adding to my cynical streak.

        I have perfected the typically French “Gallic shrug” since :-)

        • Realist says:

          @Jos Oskam

          Try out Swedish media and television.

          I wonder what planet they do live on ….

          I like Danish papers, they dare to place the cat on the table. I don’t need to agree with what they are writing, but they dare to keep up an usually serious debate and they aspire to keep an critical eye on the powers that be.

        • MC01 says:

          There’s a very good reason France pioneered handing public funds to newspapers, something Italy prompted copied. ;-)

      • Stephen C. says:

        Isn’t the idea not so much to have a passport that says a person is immune, but to merely give that impression? Create the illusion of safe travel and of safe hosting. And if you can spy on people at the same time, what’s not to like? That is, if you are in government.

        • char says:

          It is also an excuse for incompetence. They can claim with it that “hey, you got the disease but you can travel the world again” while in truth it is more likely that people without anti bodies are more likely to travel the world.

      • Argus says:

        There is also evidence that people can become re-infected, so are not necessarily immune even if they have had covid.

  5. Cobalt Programmer says:

    Groceries = essential
    Car = comfort
    Tourism = luxury

    In times of economic, social and medical crises, why would anybody go on a vacation to visit places?

    I know one thing, this COVID crises, will change the mentality of millennial and Zoomers completely. Whatever boomers thought to be the best in things in life, is going to change. There will be an ideological and even cultural shift in how people relate themselves to the world, economy and society. One of the main problems of having a conscious thought…

    • Thomas Roberts says:

      As a millennial my positions and views haven’t changed since CCP19 started, nor any of the other millennials I know of right now. Also, boomers from what I have seen, haven’t changed either.

      The only changes I have seen, is that a lot of people across the world are pi**ed at China and the economic damage so far.

      • noname says:

        It’s good to think critically and evaluate life sometimes, or even at least once in your instance.

        I no longer consider myself an (R), and likely never a (D).

        Cobalt, many years ago some said the Millennials would be similar to the Greatest Generation. Slowly this is coming to fruition, as I knew it would. I LOVE old people. Boomers are the antithesis of the Greatest Generation. Compare things the Greatest Generation and Millennials value. Contrast with Boomers.

        • Thomas Roberts says:

          I’m not saying millennials won’t be different than previous generations, I definitely want them to be, I saying that the CCP19 saga is not really changing people from what I have seen, except for now across the world, everybody is pi**ed at China. During a crisis, alot of people always think alot of things will be different afterwards and people will be different, but it rarely does, that kind of stuff is a much longer slow burn kind of change. The effects of possibly losing or actually losing their job are the main immediate for them.

  6. manny says:

    The next big shoe to drop is housing, condos and apartment rentals in expensive cities. Just visit Miami craigslist, and type in ASAP, 3000 listings show up on the first page.

    • Tim says:

      Or a farmhouse owned by foreign owners, now broke, with 2-3 hectares of land near Carcassonne…

      Sort of thing, not an actual property I know of.

  7. Gian says:

    I keep hearing that this will forever change things, like travel. I hope this is not the case, only a temporary change until this virus has run its course. God forbid this virus changes the world the way 911 did. I know “the man” would love to make monumental changes to our daily lives to make us all wards of the state.

    • Tim says:

      I’d be surprised if both disposable income and inclination return in sizable numbers for enough of the holiday complexes – from mobile home parks with activities for families to more expensive resort complexes – to see useful income for this summer and the next.

    • Jdog says:

      It has already made monumental changes, and there will be more to come.

  8. Jon W says:

    Spain and Italy are stuffed. The EU will not allow them to go on a deficit spending binge to battle deflation. So they will enter another deflationary spiral as after the GFC. Eventually (maybe 3-5 years), once Northern Europe and other developed countries have recovered, the south will get tourists from there and the stimulus they bring, and things will slowly start picking up again.

    Meanwhile the ECB will keep buying their bonds to ensure their yields don’t blow out, keeping the eurozone from breaking up.

    Honestly if they had any better ideas they would have done them by now. Germany etc doesn’t want to destroy the southern countries just for the fun of it. It’s just the nature of the political Frankenstein that has been created.

    • Tim says:

      Currency Revaluation at some point?

      • KGC says:

        They can’t do that. It would take approval of the entire EU to realign the Euro, and that’s not going to happen. The northern States bail out of Greece (such as it was) specifically to keep them from having to realign the Euro or have Greece leave and use it’s own currency to adjust their economy. I see this as a very possible environment for Italy (at least) to bail on the Euro (or try to hold the EU hostage while considering it).

        If you can do it this will be the most fantastic year to visit; no tourists! Can you imagine? I had a friend send pictures of Prague this morning and even right after the wall fell I’ve never seen so few people in the Old Town Square.

  9. Tim says:

    From end May to late August the south west of France should be heaving. Arcachon to Bordeaux to Biarritz.

    Don’t see much at all happening this year.

    That’s just one pocket of France’s tourist industry.

    • Tim says:

      From restaurants to campsites to resort complexes. No customers in meaningful just numbers this year and, if there is a sizable tailwind for middle income families into the Christmas period and beyond, not next year either.

      For that and other tourist destinations, it will be very much brutal.

  10. Augusto says:

    I heard there was a poll in the US asking people if they would get on a plane, go to restaurant, etc….once they lifted restrictions. Only 10-15% said yes. I doubt anyone in Europe or anywhere else will be taking a holiday anytime soon. First of all, a lot of people are hoping their job is still there when this is over (which it won’t be), and second a lot of people will have unpaid bills to deal with. Most of these government support programs target low paid workers with little or no assets (now a lot less). The middle class gets very little, except perhaps a pink slip when they finally show up in the office or plant. My guess is when these holiday resorts open up, their occupancy rates will be so low, and tourists so few, they will simply close up. All the hype about “re-opening” is designed to keep our minds away from the real issue…that is people are scared and broke and no customers are going to show up. And these re-restart will be a stop and start thing, as this virus re-emerges. Personally, I think this whole “restart the economy” thing is designed to prop up the stock market. On the horizon I see: More fake stories of future wonderfulness, fake news, fake caring, all to prop up a fake market, with a lot of dead, broke people at the end of it.

    • sunny129 says:

      ‘whole “restart the economy” thing is designed to prop up the stock market’
      Agree!

      every one I talked, think by June or July, most of these ‘problems’ will some how sorted out and back to if not close to good ole days. the denial is palpable in the air just at Wall ST which remains disconnected with reality.

    • paul easton says:

      Augusto I am somewhat confused by your reference to dead, broke people. Dead is dead, and they don’t care if they are broke or not, and neither do I. I’m sorry they are dead, even if they might not mind. Dead broke is something else. I’m glad to see people go dead broke, because there’s no good reason they should be better off than me. So when and if the market tanks I will be glad. When the government tanks on the other hand I will be sad, because it sends me money. Meanwhile I’m trying to get the people in my apartment house to start a community garden and chicken coop. What do you plan to do?

  11. A says:

    Countries relying on tourism, Air BNB, and the like for money was never sustainable.

    Every country needs a more robust food system. A housing system that won’t leave most of the world decimated when the economy faces something like a virus and mass unemployment. And a focus on life / health for the people, not growth and money at all costs!

    Travel can be great, but it should never be something that countries rely on to survive. Frankly I don’t think the virus would have spread nearly so far and fast if travel had been restricted early. The idea that airplanes have to fly at all costs sure bit everybody in the butt. Not just travelers.

    • Tim says:

      40 years of cheap travel.

      Heck, anyone remember Freddie Laker?

      If you’ve had more than a generation of visitors who come in good numbers each year and stay in your hotel, up to and including last year…..why would you expect that to suddenly change?

      • Nescio says:

        A lot of the comments in here, and the article itself, with the undertones of “bad tourism, now the locals have less pollution and room to roam free”, are really missing the human cost of all this.

        I own a business in southern Spain, I used to live there for a few years, and the people there are going to be utterly broken. Many barely make ends meet out of season, then they graft like mad working two jobs from April to October. They are toast now, some will starve, some will turn to crime, many will despair.

        This will be the start of the break up of the Euro. It may take a few years to unwind, but there’s no way DE, FR, NL, and SE are propping PIGS up in the manner they need to curtail monstrous level of social upheaval.

        • Tim says:

          Yup. Look at parts pays Basque also.

        • paul easton says:

          The PIGS as you call them will be hurt the worst, but most people everywhere will be hurt bad also. Maybe the consequences will be far more serious than the end of the Euro.

    • Italian Farmer says:

      Village farmers have been renting their rooms on their farms in Italy for 50+ years, its called ‘agri-tourisimo’, and it ain’t going away, the people who live & work in the flats of say Milano, must have a get-away.

      They go live on the ‘farm’ for a weekend where they drink fresh wine ( never bottled thus no sulfur ), they drink fresh-olive oil ( fresh squeezed from olive ), they eat with fresh bread, and fresh proschutto, and gorgonzola. They live, then monday AM they return to work, to live in the flat, and work in the factory’s ( think Chinese owned ).

      Now say in SF, why would you go there? Why would you stay in an air-n-bee? Then why would a sophisticated Google Worker go live with a hispanic family in Fresno on the weekend?

      The problem is that ‘farming’ in Calif ain’t fun, the problem is the winery’s north of the bay are for the extreme rich.

      Just because there is heaven & hell, doesn’t mean its the same everywhere.

  12. Lopez says:

    frankly the tourism experience was becoming too much. Tourism is an unregulated industry in many countries and a free for all. It is also a low barrier to entry business where anyone can open a hotel, B&B or a restaurant. With the advent of social media, many places were becoming overrun with thousands of tourists that took away the charm and beauty that made those places popular int he first place. The COVID tourism collapse is actually a good thing for many places (such as Venice and Barcelona) where the locals hated tourism anyway. Many places int he world will again regain some charm and beauty (Machu Pichu, Everest, Patagonia, Canadian Rockies etc). Tourism should be a luxury activity and not a main stream consumable like sausages and beer. Ryanair and Easy Jet were the worst things that happened to travel. Drunken weekend romps to Prague (etc) for English proletariat will hopefully become a thing of the past.

    • Tom says:

      How dare the serfs party.
      Don’t they understand they are only supposed to serve? Hopefully we can get a more potent virus next year.

    • Tom Stone says:

      “Nobody goes there anymore, it’s too crowded”.

    • Thomas Roberts says:

      Ah yes Lopez,

      Only the rich and their loyal servants should be able to travel. Those commoners should only be at work or in their dirt floor metal shacks and not dirtying up the world. The commoners should be wearing gps shock collars to make sure they remain where they belong and only speak in approved ways.

      The locals complaining about tourism living in Venice are not just random people who moved to a beautiful city they didn’t build. They are not parasites who want to steal and control a beautiful city for themselves. They should have exclusive control over national treasures, so they can only share it with the rich and deserving.

  13. Jdog says:

    One factor about tourism is that it is pretty much all financed. People rarely save for vacations, they simply charge them and worry about paying at some point in the future. That kind of behavior is fairly dependent on people’s confidence. I do not think people are going to regain their confidence for some time.

    • Synergy says:

      Good point. But hey there are some who think we will come roaring back!

    • Tim says:

      That’s my point about tailwinds for household finances. Xmas will be the next
      cultural focus of discretionary spending. It will, however, be on the back of depleted income from now on for many households.

      Bookings for next summer may well be substantially depleted as said households take longer to pay for a Christmas they would have otherwise prepared for differently.

    • char says:

      American?

      In my country the wages are cut a few percentage point each month and you get it as a lump sum in Mai to pay for your vacation

    • Thomas Roberts says:

      Jdog,

      Assuming a little much?

      The vast majority of tourism in Europe are other Europeans, who probably saved up for it. They didn’t have to travel far and for a German, a trip to Italy is probably on average cheaper than a person in the American midwest or northeast traveling to Florida. Most people in Germany don’t even have a credit card. They use either cash or a debit card.

      Also probably most people at six flags and Disney and other theme parks are locals to the state. Most tourism is from people within a few hundred miles. Most tourists in las Vegas are from California. Most tourists are probably not spending as much you think. There are yes people who put 10,000 plus on a credit card for a vacation, but it’s far from the majority.

  14. polistra says:

    Tourism and travel OUGHT to be limited in an epidemic. Real public health always limits travel, and checks travelers and immigrants for disease. This was standard procedure for 100 years.

    We’ve been FAILING to follow normal public health procedures for the last two decades, which is exactly why epidemics spread around the world now. The anti-science WHO actually prohibits normal public health restrictions.

    • Wisoot says:

      30% WHO budget under WHO decision making. 70% WHO budget from donations has agenda restrictions. Margaret Chan 2015 DG WHO.

  15. OutWest says:

    One big problem the tourism industry faces is that a lot of people for months if not years to come will be wearing masks in public. I for one have no plans to hang around with a bunch of people wearing masks during a relaxing vacation….it gives me the creeps and reminds me how sickly the human race has become. I suspect that many others feel the same way. I’ll be selecting more remote travel destinations going forward and probably spending less money.

    Before COVID, the effects of wearing masks in public (masks are critical in medical settings) was determined to be ineffective and waistful based upon independent studies done by nearly all industrialized countries.

    Now, you’re a jerk if you don’t comply even though the science proves otherwise.

    On a side note, my state is preparing to begin allowing elective surgeries again because hospitals, nursing facilities, and healthcare works in general are all going broke.

    • char says:

      It is a way to make people feel safe. It doesn’t matter that it doesn’t work

    • Tim says:

      In the UK we have most hospitals primed for Lombardy-like deluge of COVID-19 patients.

      I know of one regional hospital where they effectively have 3 HDU/ICU separate facilities spooled up and ready to go. Not a large hospital by many standards.

      But they have 8 or so COVID-19 patients in toto, across all three.

      Now, admittedly, that will not be the case everywhere.

      But….

      All the other things that kill are not going to take a vacation because there’s a virus in town.

      Hence a wide broadcast set of messages over the last week imploring patients with tight chest pain &c &c &c to still come to the emergency department or contact their family doctor.

      Elective procedures will simply have to wait, unless there’s time for them to be carried out at whatever golden nugget is still functioning.

    • jm says:

      Masks enormously reduce emission of droplets, and so.prevent infected people from infecting others.

    • MC01 says:

      Masks are the very last of the problems for the tourism industry.
      The first and biggest problem is called politicians. I’d like to say they have hit rock bottom but every day brings a slew of idiotic new ideas and I am sorry to say the worst offenders belong to my generation. We are truly a bunch of pathetic losers with an obscenely inflated ego.
      The second problem is that, well, far too many businesses won’t reopen with these new idiotic ideas in place. And who can blame the owners? Better to collect unemployment or open a grocery delivery business. You cannot break even at these conditions, let alone turn a profit. Yes, I know “we-need-to-save-lives” but if that was the plan with lockdowns it wasn’t terribly successful around here.
      The third problem is that uncertainty and tourism don’t go hand in hand. With statesmen such as those we have in Italy and Spain new and idiotic ideas are not merely possible: they are a certainty. Right now it’s beyond any doubt the Italian government is being forced to reopen by lack of revenues and an explosive social situation in the South but they will desperately look for any reason to shut down the country again. Nobody is going to plan a vacation or redecorate a hotel in this climate: the only business that will thrive is preparing for the next lockdown.

      In short tourism is dead and buried, just like most sectors of the economy, and it’s not coming back.
      I hope it was all worth it.

      • char says:

        The Italian and Spanish governments acted right but a bit late. And loosening restrictions a week or two late does not cost a lot of money as the punters will be a bit skitties in the first few weeks

  16. char says:

    “Some Spanish hotel groups are urging the government to facilitate mobility by quickly rolling out an immunity passport, which will show whether someone has already suffered from Covid-19 or not. ”

    The number of people who got the disease is a low single percentage in Europe. Not really a big market except for Tirol. There are also reason why you don’t want those people. (they can be immune and carry the virus)

    • CRV says:

      It was reported yesterday that only 4% of the dutch population has been infected so far. There’s a long way to go.

      Some people think that with the death-number declining it will be safe(r) to go outside. But my opinion is that as the percentage of population infected rises, the risk of getting effected rises too, as there ar more people roaming about not having symptoms (yet).

      There are some reports saying that people who have had the disease mildly, don’t develop anti-bodies and therefore can get the disease again (and spread it). If true, and without a treatment for COVID19, tourism will be a no go for a long time. Unless we all stop caring and take it as it is.

      • char says:

        Sars, MERS and the corona viruses that can cause the common cold only give immunity for around a year. I don’t expect it to be different for Covid. In Belgium the number of blood donors that had immunity went from 2% to 4% in two weeks. So 50% will be reached in February 2021. This assumes infection rate stays the same which which is unlikely to be true.

      • MC01 says:

        The doom-mongering is reaching fever pitch right now because the media and their politician pals feel people are starting to escape their grasp. I agree with our prefect (one of the very few authority figures who handled this crisis well) who urged the local media to use “the utmost caution” when reporting virus-related news: some newspapers and websites have been spreading downright falsities in a desperate effort to keep people scared.

        I live in one of the worst affected areas in the world (Northern Italy) so here what you should expect: at a certain point this virus will lose steam. It won’t disappear all of a sudden to reappear in the Fall to kill millions, but we’ll get a long tail of isolated cases and highly localized clusters. This is manageable with vigilance and common sense and should keep people alert.
        New cases are overwhelmingly mild or even very mild in nature, but so far around here no “asymptomatic cases” have been found: all patients reported at very least an altered or diminished sense of smell and taste. Whether this means the virus is mutating or it has merely killed off most potential hosts remains to be seen: the genetic data we got from China back in late February are wrong at best and tampered with at worst.

        Re-infection has not been observed around here yet (albeit it’s well possible; see rhinovirus infections aka the common cold) but the suspicion is many patients who got “reinfected” were actually victims of faulty testing: it wasn’t until the end of March that reliable swab kits were available in quantity. Our present practice is to test all patients who tested positive for Covid-19 at very least four times over 15 days, and they are declared healed only if the last two tests are both negative. These folks are now being tested in mass for antibodies but the test is still experimental in nature and reliability still a big question mark.

        Finally a note of caution: the weird behavior of this virus is apparently not due to how weird this virus is (more on this in a minute) but due to early data provided by Chinese authorities and the OMS/WHO. This data was misleading to say the very least and seriously affected our decision-making capabilities. Germany, who disregarded this data and carried out her own research work, has had great success in managing the disease while Italy put it under the control only once she started disregarding the early set of data and using only her own. This is misinformation campaign by China and the OMS is something that needs to be addressed sooner than later, especially since China and the OMS are still trying to feed us false data. A few shipments of hazmat suits and facemasks won’t suffice, President Xi.
        This virus is either a close relative or a mutation of the original SARS which surfaced in 2002: whether this mutation is natural or man-made is possibly the hottest political topic in the world right now. But we do know that the original SARS escaped at least twice from research labs in China over the past fifteen years causing localized outbreaks. In short this stuff may not be man-made, but evidence against the Chinese government is now piled sky-high.

        Like the original SARS this virus will be beaten and I do hope people will learn a few lessons this time around. At least wash your hands once in a while and don’t eat vile disgusting things. Better, much better grab a Mars bar!

        • char says:

          In what way was the early data misleading? And did it matter when governments don’t act forceful more than a month later. It sounds to me like an excuse, a not particular good excuse.

          ps And two months later for the UK and NY, even though they say what happened in China, Iran & Italy

          ps. If there is 1 to blame for the situation here than i look at Tirol. Thank you Tirol.

        • Not as it Appears says:

          I too am in Italy, albeit in Tuscany, and here everything is just fine, we lived off the land, the tourist income was icing on the cake, so now we only have the cake.

          Nobody is lying, everybody is lying.

          The Italian people were never told the truth from day one. The Italian people don’t care, as long as somebody else is getting rich, and getting more sex than them, they think that life is good, that there is something higher to strive for.

          To most Berlusconi was a ‘Trump’ but to the Italians, he was a fine example of an elderly gentleman enjoying life as a teen-ager.

  17. Tim says:

    No. You simply do not get the multi-cluster expansion of cases recorded in the last 4weeks in European states if there is less than 10% prevalence.

    …..but as to fellow guests in an hotel or the staff, well, they are less of a threat than one’s family…..

  18. Denise says:

    It breaks my heart to not travel domestically or abroad for possibly the next 18 months. A wedding in Puglia fir late August has been canceled. I have been on many a beautiful trip to developing countries (last year Morroco and Peru) eager to spend my dollars and enjoy an authentic yet touisty cultural experience. I am to old now to shelp my own luggage across a vast landscape. I choose active small group tours that hire locals. Our travel will be limited until their is a successful vaccine to protect the planet.

  19. paul easton says:

    In Buddhism they say it’s not necessary to travel, because the main treasure is inside you. Now that Buddhist gatherings have migrated to Zoom I will have to put this notion to the test.

  20. gorbachev says:

    The need to do better is too powerful to overcome.

    With or without the vaccine we will figure out how to live.

    With the vaccine we will party like it’s 1999.Without it

    bars will be bigger and social distancing in the pub demanded.

    Testing will be commonplace and quick. Rents down by 50% and

    prop taxes to match. Plans are being written now.

  21. WES says:

    Well, since the central bankers didn’t bail in my travel budget, I guess that means I am not going anywhere!

  22. Wisoot says:

    Lombards and Catalans locked down first. A spirited bunch – wait to see if they are silenced or lead with a gilet jaune

  23. Realist says:

    It isn’t only in southern Europe where the tourism sector is in deep trouble, for example up north in the Nordic and Balticum they have problems. One good example is the ferry lines ( from an American or UK point of view the ships are luxury boats similar to those cruises ). They are in deep trouble. Those ferry lines are strategically important for transport of exports and imports but with most ships moored due to no passenger traffic, they are generating massive losses, because lorries do not generate the needed cashflow by themselves. Finnish Viking Line is deep in the red and Estonian Tallink ( the jewel of Estonian economy ) is much worse off than Viking. This just an example how the current situation affects things. Finnish Eckerö did fire most of their crews because their ships are registered in Sweden and Swedish law do not allow to furlough people for longer periods the way Finnish law does.

    Eckerö and other Finnish companies often register their ships under Swedish flag because of the Finnish Sailors’ Union which has been instrumental in significantly reducing the numbers of merchant ships under Finnish flag ….

  24. LasVegas Frank says:

    I am the son of parents that left Calabria, Italy in the late 1950s for a better life in America. Calabria was and still is a spectacular land at the foot of Italy, blessed with clear water, beautiful beaches, mountain forests ,where wolves still roam, handsome people and amazing food. Unfortunately it is also the home of the N’Drangheta, which is the most powerful, wealthiest organized crime syndicate in Europe. They won’t need any banks, or bailouts because their billions in cash is dispersed throughout the world. Calabrian elderly taught their children and grandchildren survival lessons in America. Work hard, save money, live modestly, eat well and put family and close friends above everything. Many of us already knew how to live as if there was a depression well before this happened. Those of us that listened will
    soon be thriving and will move this country forward as this crisis unfolds. We are the ones that will decide the way
    forward.

  25. char says:

    The biggest problem for Italy, Spain and Greece will be that they will have defeated Covid by the summer but that the Northern European countries, their main holiday market, will still battle with corona so those holiday makers can’t be allowed in without a 2 week quarantine. A bit problematic if the holiday is only for 2 weeks.

  26. Stephen C. says:

    Yes, I too grew up in this same mind set, from grandparents who had come from a place in Italy where governments, such as they were, basically told them to either leave of die of starvation. So they learned how to take care of themselves and tried to instill this in their children and grandchildren. And so here we are, reaching back to that set of skills that were made war upon by our government for the last 50 years. Also, we have the N’Drangheta here in the US, they just call it Wall + K street.

  27. Island teal says:

    Morning….after reading the article and all comments I’ve decided to plan out a road trip for summer. Thanks for the inspiration 😎😎

  28. David Hall says:

    A tourist industry official reported 38.5% of Florida’s GDP is from the hospitality industry. We have 600 miles of beaches, theme parks and winter homes.

    I suspect there is a property bubble in my state.

    • char says:

      Not all hospitality industry is tourist related and this number, 38.5%, sounds like they have included everything they could possible include plus some more.

  29. Christoph Weise says:

    Some comments suggest that the problem is not well understood. It is not limited to Italy and Spain. Greece, Portugal, Thailand, Africa and alike will be victims as well. It is not limited to closed borders. 14-day quarantine periods shall apply after borders will have opened. Getting sick on foreign travel may become socially unacceptable. The tourism industry is composed of some large and thousands of small operators. The supply of aid to this industry looks virtually impossible. At the end it will probably surface that only some airlines and the financial industry received support. All the rest will go belly-up.

    • Forester Gump says:

      I think Wolf could do an article on ‘tourism’ like everything else.

      1.) In Thailand tourism & the ‘economy’ were already dead pre-virus

      2.) In Italy the economy was dead long before the virus hit

      Thus the question, how do you get back to bad is relevant. How do you get back to ‘great’ is impossible.

      I think they’re both similar, Italy did the ‘Disneyland’ thing from 1950’s until 2010’s, and most have been there, done that.

      Thailand is much the same, the old novelty was under-sexed middle age men ‘tourists’ who had been there during the Vietnam War, and wanted to be kids again.

      For the youth, now that Pot is legal in the West, the SE-Asia, really doesn’t bring anything that can’t be found at spring break. So for Thailand/Laos the youth gig is up, and the old-guy gig, well that’s like Harley, where the average age of the guy who goes to Sturgis is now +70.

      Thailand will be just fine, 90% of the entire country is self-sufficient grow their own food. Italy too will adjust, post WW2 they had no tourism, and they lived just fine.

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