Fresh Tsunami of Cancellations Washes Over Tourism-Dependent Spain amid Fears Borders Will Slam Shut Again.
By Nick Corbishley, for WOLF STREET:
The UK government this weekend delivered a hammer blow to Spain’s already battered tourism industry. On Saturday night — just two weeks after the government had dropped its two-week quarantine for travelers arriving or returning from a bevvy of European countries, including Spain — it backtracked once again: from midnight that night, it announced that all travelers arriving from Spain, where Covid cases are once again spiking, will face a 14-day quarantine.
On Tuesday morning, the UK changed policy once again. Travelers arriving from high-risk countries such as Spain will be tested for Covid eight days after they land. If they test negative, they will be able to come out of isolation two days later. If they test positive, they will have to remain in quarantine for the whole two weeks.
The quarantine rules are a nightmare for the approximately 1.8 million British holidaymakers either currently in Spain or about to go. Those already in the country now have to go through the rigmarole of informing their employers — assuming they still have one — that they will not be able to come back to work for between 10 to 14 additional days. They will also have to cancel any social engagements they had planned for the post-vacation period.
British tourists accounted for just over one in five of the 83 million visitors to Spain in 2019. Now, many of the tourists who were planning to come this summer will be staying at home or going elsewhere. Aside from reinstating the quarantine for arrivals from Spain, the UK government has also advised citizens to avoid all non-essential travel, not just to mainland Spain but also to its island archipelagos, which is likely to trigger a fresh tsunami of cancellations. The UK’s largest tour operator, TUI, has already axed all holidays to mainland Spain for the next two weeks.
That’s bad news, not just for Spain but for the whole of Europe. The sharp resurgence of Covid cases in Spain deals a heavy blow to any lingering hopes that the spread of the virus might be contained until at least Autumn, allowing tourism-dependent countries like Spain, Italy, France and Greece, to at least salvage something from the Summer tourist season. The UK has warned that it stands ready to apply similar “handbrake restrictions” to other countries in order to stop the spread of coronavirus.
It’s not just the UK that is reducing its exposure to Spain. Both France and Germany have advised their citizens not to travel to Spain’s northeastern region of Catalonia, which has witnessed one of the worst outbreaks. Norway has reimposed a 10-day quarantine requirement for people arriving from Spain. Belgium has announced a ban on all non-essential travel to the cities of Huesca and Lleida, as well as recommending a 14-day quarantine for travellers from Aragon, Catalonia, Extremadura, La Rioja and the Basque Country.
Taken together, these quarantine measures could end up costing Spain’s tourism industry an additional €8.7 billion in lost revenue, says industry group Exceltur. That’s on top of the tens of billions of euros that have already been lost due to the zero activity registered during the months of complete lockdown. Even in June, when the borders finally reopened, overnight stays in hotels were down 70% compared to the same month last year.
Ghost Towns Everywhere.
“Stay in the city and do not venture outdoors unless strictly necessary.” That was the recommendation issued ten days ago by the Catalan regional government to the residents of Barcelona and many of its surrounding suburbs.
Predictably, many did the exact opposite. Well-heeled residents hurriedly packed their bags and scattered to their second homes up and down the coast, with the result that many small coastal towns are now heaving.
Barcelona itself, already devoid of tourists, is like a ghost town, as the photo of the Sant Pere barrio, taken on Sunday afternoon, attests:
And here’s a beach shack on Bogatell beach in Barcelona at 12:30 on a Thursday, which would be busy on a normal summery day:
Similar scenes can be seen across myriad tourist destinations, from Mallorca to Tenerife, to Benidorm and Alicante, which would normally be swarming with international tourists at this time of the year. In many of these places, local residents have the beaches, bars and restaurants almost completely to themselves. Spanish — or in some places, Catalan, Valencian or Mallorquin — is once again the dominant language.
Many local companies that depend entirely on tourists for their income effectively have no business right now. It’s the reason why most hotels still haven’t reopened. Some never will. Many businesses that have a more balanced mix of customers (both locals and tourists) are hanging on in there. The question is whether or not they’re earning enough money to be able to take their workers off the government’s job retention program, which is scheduled to end in September, as well as have any hope of ever servicing the additional debt they’ve taken on to weather the storm.
For Spain’s economy as a whole, the loss in business just from this year could end up reaching as high as €83 billion. Tourism is as important to Spain as the automotive industry is to Germany, or the financial services industry to the UK. In 2019, it provided roughly 15% of Spain’s GDP and accounted for 13.5% of all jobs. It also played a huge part in Spain’s partial recovery from its housing crisis (2009-2013), creating more new jobs — albeit invariably of the low paid, short-term variety — than any other sector.
Roughly half of those jobs are now on pause. Others have simply disappeared. Even with the government’s job retention program, more than a million jobs were lost in the second quarter.
Same Old Wave.
Now, the overriding fear is that the borders will soon slam shut again. And the lockdowns will recommence. Although the French and Spanish governments deny they are considering closing the border, new cases of coronavirus continue to surge across Spain, from the northernmost reaches of Catalonia, Aragon, Navarre and the Basque Country to the southern regions of Alicante, Extramadura and Castilla La Mancha.
The main vector of contagion appears to be teenagers and young adults, doing what young people have always done during the long, hot Spanish summer: spend their days meeting up with friends, going to the beach or swimming pool and having oodles of fun. When the sun goes down, the action moves to late-night bars, nightclubs or quiet street corners, where youngsters while away the hours sharing all kinds of smokes, vapes, and alcoholic drinks. And in some cases, the virus.
In recent days, Catalonia and other regions have tried to stem the tide by closing late-night bars, nightclubs, cinemas, cultural centers and casinos. But it’s probably too little, too late.
Since Friday, Spain’s Department of Health has registered over 6,000 fresh cases. After a months-long downward trend, cities such as Barcelona, Zaragoza and Madrid are seeing a fresh surge in new infections, prompting the government to warn that a second wave could soon be imminent. The reality is that the last wave never really ended. While the politicians were planning for a second wave in October or November, Covid seems to have just stuck around.
“The fresh spikes are taking a terrible toll.” laments Carlos Garrido, president of the Spanish Confederation of Travel Agencies (CEAV). “In the end, it’s all about confidence, fear, and the economic crisis. And what the fresh outbreaks do is aggravate that situation.” By Nick Corbishley, for WOLF STREET.
Europe may be about to find out what it means when businesses and consumers tighten their belts at the same time. 128 days with my Mother-in-Law. Read… What Happens If Most Businesses & Consumers Tighten Their Belts at the Same Time?
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That’s it for the tourist season. It was already an absolute palaver to get away, and with it being August, most won’t rebook. What a mess.
As the weather gets colder and people get their normal colds and flus the UK economy is going to grind to a halt again as well. Nobody is going into an office/bar/restaurant/airplane while someone sniffles away in the corner with ‘just a runny nose from the changing temperature’. Right in time for all the wage subsidies to expire.
And then there is Brexit. My observations in the engineering sector is that lots of firms were sitting on detailed ‘no-deal’ plans that have now been triggered, since the combined likelihood of either a bad brexit or the covid recession have caused them to just throw the towel in. 25% at Mclaren and Dyson already – these are high value skilled knowledge worker jobs.
The most incredible thing is how house prices have held up, and in some areas are rising. I just can’t believe it, but it does seem to be the case, and I’m now convinced they’ll let the whole place burn down before they let house prices fall. Stamp duty cut for buyers (i.e seller subsidy) is just the start.
Excellent post. I’m afraid that house prices will continue to hold up until one fine morning when you rise to hear the worst has happened and as suddenly as a cramp from an onset of severe diarrhea, there it will be, and no toilet anywhere.
Barcelona and especially Madrid are HOT in Midsummer – many Spaniards close up shop and head for cooler climates. These policies are a wrecking ball.
In Canada, the Prime Minister is being caught giving almost a billion dollars to a charity scam where the two founders are pocketing 38 million from this and the charity is having a difficult time trying to explain it’s purpose. The Prime Minister and Finance Minister have family members receiving jobs or paid speaking engagements.
Conflict of Interest would be the pure definition of what they are doing.
Brings to question how many of these charity scams out there
The charity also has many different companies and affiliations attach to the board of directors.
This board of directors can be replaced at any time by the founding brothers as well. It is in their charter.
Interesting, buy is this comment on the proper thread?
How can cases be surging in Europe? I was told Europe did and is doing a terrific job halting the spread. Only in dumb America is the pandemic still a thing. Now you’re telling me this isn’t the case anymore (no pun intended)?
In either case, countries/regions have a choice to make. Lock down and destroy the economy. Or open up and take the risk that some people will get sick and maybe die. There is no 3rd option.
Ahem, except that there is a whole plethora of options between those…
The point of shutting down a lot and gradually reopening is to first get control and then to develop an understanding of where, what, how, when and under what circumstances we can ease or have to restrict things.
I think random guy is just being sarcastic about our typical press coverage in the US. With our two-party system, it is often portrayed as a binary choice between opening up 100% or locking everything down.
The Democrat-controlled press tends to overplay the wonders of the European and Chinese economies as a way of showing how horribly we’re doing, while the Republican-controlled press touts the low death rates of covid and the high stock market as the ultimate gauge of the economy.
That being said, I’ve been a tourist around many parts of Europe – including a Spain trip to Madrid, Sevilla, Granada, Valencia & Barcelona. Many of those tourist shops and restaurants are family-owned businesses that simply won’t survive a lost season.
These small businesses can’t borrow money like the big corporations, and they have no clout with their landlords. Then they spend all this money on cleanup, reorganizing, disinfecting, and restocking only to get shut down again. We’re heading into a brave new world at the other end of this pandemic and I hope they still have a place for small business in it.
I think we have to assume that Covid-19 is an extinction level event for the tourism industry. The debt and equity in the industry will drop to the cellar, put on the shutters and tend the garden. A year or two from now , open the shutters, dust off the furniture, and those who are left standing can open back up. Some young people may get a chance they would not have had otherwise.
Most places that depend on tourism for a large chunk of their economy are in real trouble. Tourism is always dependent on the holiday’s and the summer is the biggest holiday. Income earned during the summer often subsidizes the rest of the year when business is slow.
I believe the ramifications of this are going to be longer lasting than most people realize. This has gone on so long now, it has become part of most peoples subconscious thinking.
I really do not know how long it will take before I feel comfortable in a restaurant or on a plane without any anxiety about the health concerns that go with those close proximity conditions.
I know the appeal of doing those things is considerably less so long as that anxiety lasts….
I tacked the following on to JDogs comment.
“They will also have to cancel any social engagements they had planned for the post-vacation period.”
This is a a highly infectious virus and pandemic. Who in the hell is making social engagement plans, let alone making arrangements for travel to Spain (from anywhere) ? Do people think the virus is contained? psssst…It’s not. I don’t believe critical thinkers will feel comfortable for quite some time after vaccine, let alone now. Mind you, people are still having house parties and going to bars so what do I know?
I know that travel insurance that covers Covid is not available for travel outside Canada. I guess it isn’t the same, elsewhere.
As always, very smart comment.
There is something both pathetic and so frustrating about articles like this. We are dealing with a dangerous, highly contagious virus. As of now medical science hasn’t devised a cure for the disease or a preventive vaccine. Of course economies largely dependent on consumer spending are in free fall. But we keep pretending that delusional optimism will somehow see us through. Because the last thing we are willing to do is examine a socio-economic system that is proving to be so vulnerable in the face of a pandemic.
The good thing is that freedom to stay indoors is still an option that way you can never get it
Paolo: BC: 194 deaths, 5 months, 5 million population, risk of death for the whole 5 months, 0.000039, or 0.0039%, or 1/258th of one percent, or a 99.996% chance of not dying from the virus. Currently hospitalized, 9.
Hawaii is dead, dead, dead. I think other islands are probably hurting as well
1.4 million people can still afford to go on holiday even with Brexit looming and the shutdown.
Best depression ever?
Eat, drink, and be merry, for tomorrow we tumble into another great depression. Or a Greater Recession.
I don’t know how the collective West will avoid it.
”Eat, Drink, and BEE as Merry as possible,” for tomorrow and tomorrow will not ever come, and, if by some slip in the ”force” tomorrow does actually arrive, WE THE PEEDONs will ”DINE.”
And, at that point, IMHO as a minion of the great and glorious OliGarChy who have lead or zinced or coppered us here, and to be sure continue to do so, WE will and should dine at their expense!!
OH, wait,,, those folks are already providing us the crumbs, AKA ”trickle down” from the results of their last great puppet, the ray gun who did his best as an actor and main malfactor of those same oligarchs, and the others since selling us out back to the oligarchs, or even selling us out to other nations, etc.
Get used to it if you have not already done so,, it is the way it is, and has been for the last couple thousand years, and likely before that, but not recorded or records lost of more ancient examples, eh…
Time and enough to INSIST that all kinds of guv mint everywhere get over and done with the entire concept of ”central authority figures”,,, and then insist WE the PEEDONs of each and every state/nation/country have an actual democracy, as was envisioned IMO by founders of USA, in spite of some calling them humans,,, which, of course, they were as are we all…
May the Great Spirits Bless Us ALL!!!
What’s wrong with you guys?
The squid head is DJing at Hamptons to entertain his clients celebrating record loots.
Laughing very hard right now at that from the Monterey Peninsula of California. “Best Depression ever”, for sure, especially for us real estate agents here. Rich people buying in crazed droves, a stronger purchase market than we have seen in decades, most especially in the mega millions price range. What do all these super rich people know?
The know enough to spend their money while it still has value. :-)
I read somewhere that if the World uses a different reserve currency, say a basket or blend of different currencies, the US standard of living will drop a great deal.
Regardless, trillions of new debt without a coherent plan or stated objective beyond sheer politics does not make a firm economic foundation for any country. Look out below!!!!
Paulo,
Ask yourself what is the alternative reserve currency to the US Dollar for the next, say, 10 years?
US Dollar is safe against other FIAT because they are all printing at the same rate, so the US Dollar will remain the reserve currency for some time.
The economy of China and Euroland seem to handle it better than the US. So which currency will take over? Besides US is trying to f*up China so Yuan will be the preferred currency unit of Chinese trade and undoubtedly the currency they use with countries for who American trade is not important
Yes, they’re putting their money in tangible assets, knowing fiat currencies are declining rapidly in purchasing power.
When the SHTF, property values may drop along with stocks but, if you hold on long enough, property is likely to go up at some point. Meanwhile, it hasn’t dissipated.
I bet they have money in PMs too.
Better be banking that easy money….. What goes around comes around, and no one will be immune from the destruction when this depression gets up to speed….
I should trademark that phrase “Best Recession Ever!!”
Nick, very curious to know, how is the Spanish hospital system handling the spike in cases? Is it being overwhelmed like the last time or are they handling it?
MCH,
For the moment, no. At least not according to the official data published with a certain amount of lag by Spain’s Ministry of Health. In Catalonia — one of the worst affected regions — there were just 34 hosiptalizations during the seven days between July 16 and July 23. That’s just under five per day in a region of 7.5 million people. Four of them needed intensive care.
The fact that the number of daily deaths owing to Covid is still exceptionally low, at around two or three a day, would also suggest that the hospitals are far from being overwhelmed.
Long may it stay that way (though I fear it won’t).
Good luck, Nick. Hope the situation stays that way. Certainly looks like lives are being saved with the caution involved so far. The biggest problem with C19 is that there just isn’t enough data yet, all of that has to be gathered in hind sight, so it pays to assume the worst.
MCH,
As you know, hospitalizations occur weeks AFTER cases surge. If you test positive, it takes a while to get so deadly sick that you’re admitted into a hospital. So you will see a surge in hospitalizations with a lag. Deaths start rising even later. Covid is not a sudden execution.
Look at Florida and Texas. In early June, cases started rising, and hospitals in the outbreak zones were not overrun. Now they’re overrun, and people are dying in large numbers. That’s how it works.
In February in Spain, no one tested and no knew what was going on, and people just went to the hospital. So sure, this was a different scenario than today. But if you see a surge in cases, you WILL see a surge in hospitalizations a few weeks later. That’s just how it works.
Over half of the people in the hospital with Covid in the California (and maybe the US) are now under 40. Younger people get just as sick, and they suffer terrible long-term side effects. They just don’t die as easily.
We’ll see what happens in CA in a few more weeks I guess. There has been a substantial increase in the number of cases, but there is a lag time on mortality. Not sure about what So Cal is seeing right now, but in the bay area, I think hospitals aren’t running out of space… at least not so far.
MCH,
On July 22 and 23, California reported two all-time state records back-to-back of 156 deaths on the 22nd and 157 on the 23rd.
Texas reported a state record 238 deaths on July 23.
Florida reported a state record of 173 deaths on July 23.
Of note, the population in Texas (29 million) and Florida (21.5 million) is a lot smaller than California (39.5 million).
There are real problems in Southern California in terms of ICU beds, particularly in Imperial Country, that has been shipping its Covid patients to neighboring counties, but they’re now also getting worried. In the Bay Area, I think we’re still pretty far from hitting ICU capacity.
Young people in general do NOT get as sick, the hospitalization rate and mortality of this disease is vastly higher in older age groups.
The long term effects in people who recover are not known in any scientific way at this point. The vast majority of people who recover have no major sequela.
The most accurate thing to say is that this is a disease with high mortality and morbidity, but that mortality and morbidity is much worse in older populations with comorbidities. The number of young adults dying from COVID-19 is small.
Over half the Covid patients in hospitals in California are under 40. The average age of Covid patients in the hospital now is 41. So please look at the numbers.
This means that young people get very sick, and they have long-term consequences that could well turn out to be life-changing and permanent (heart damage, etc.), though I agree that “permanent” will take years to prove.
But “healthy” young people just survive the hospital treatment better (intubation for three weeks, etc.) than old people.
So now you’re 30, and you survived Covid in the hospital — so you’re not part of the “deaths” stats — but for the rest of your life, you have a heart problem, and you cannot do what you thought you could easily do, and you will require continued medial attention for the rest of your life, all because you went to a bar. Is it worth it? Is it worth for society and for the economy?
Is it worth being stupid about it???
You do know that if you are dying to see your friends, dying to go to a bar, dying to go out for a meal that you are dealing with a virus that loves you, passionately don’t you?? This lover will use and abuse you, leave you wrecked emotionally and physically, maybe even kill you. Then disappear to find another lover.
No one knows how this particular virus works, except, it needs to feed on humans, maybe animals too. If we had all kept apart from each other it would have died by now. It was circulating for a long time until it found its first victims. Then it just got greedy for more.
August is the vacation month in most of Europe, thus early september will probably indicate how things will develop regarding c19.
Just to be clear, Spain had re-opened nightclubs?!?
That’s right, MarMar. As far as I know, in some regions they’re still open.
In Spain, we went through one of the most soul-crushing lockdowns. Then, when things began reopening, our elected leaders decided to throw all caution to the wind and set the stage for one last summer of love. Now we’re paying the price.
‘The Gain of Fuction labs’
How many out there are even aware of this GOF!? I confess. I had no clue!
How come MSM is NOT touching on this issue?
Look for U of Minn CIDRAP article Dec. 19, 2017. 8th paragraph
Trying not to be a debbie downer.
Because the range of research in these labs is also responsible for alien abductions – aka abduct Joe Bloggz – take genetic material from spine – modify human DNA – hybrid with pig goat sheep – whatever the guise is for defence nowadays – overwrite memory with little grey alien – dump Joe back on street. You the human are the farm animal. MSM hasnt caught on yet. All nuclear biological warfare labs will be shut within 10 years. Joe is going to close them down. When countries get animal outbreaks of mass death – pigs in China – cows in UK – its over 90 percent likely mankind manufactured it that way. Its the new not-war. Like this plandemic. Taking nature to its extremes. Australia more concerned with koala extinction than tree numbers which provide their rain and oxygen. Compromising ionosphere with thousands of metal sun ray enhancer satellites. Gaia will flip the poles soon and get her own back! Tesla envisioned an electric grid surrounding planet – what was not shared and instead – rubbished his name and genius – was this grid would mind control humanity to rid the war senses. Take a genius – put the well intended tech into the wrong hands – and it serves the few rather than the whole.
I can confirm that the airlines are going to be in big trouble.
I just flew back from Bangkok to London with Etihad.
95% of flights on the departure board at Bangkok were cancelled.
The Boeing 787-10s that I flew on (seats 330) had only 28 passengers on the Bangkok to Abu Dhabi flight and 23 passengers on the Abu Dhabi to London flight.
I already hated travelling with the “Terrorism Threat security checks” but now with the Corona Virus fiasco (temperature testing and form filling in and wearing a mask), it is even worse.
I cannot see people bothering to fly (especially if you will require a medical certificate) so bankruptcy for the majority of the airlines and a lot of lease/banks are going to be hit financially big time.
Thanks for that update
Very frightening numbers
It sounds like a little payback thing due to BREXIT!
Call me crazy but isn’t there a chance that Brexit will be called off until this Covid-19 emergency is over?
Everywhere you look the signs of economic collapse are visible. Office rentals, high street shopping, brick and mortar retail, aviation, tourism….the list goes on.
The political leaders can’t say this out loud, but they clearly know it. Instead we just get “return to (new) normal” type phrases.
Given the above, and the statistic re the relatively narrow mortality effect of the disease – which again they must know, I continue to struggle with why?
If the economic impacts are extinction level in some cases, and mortality is generally low – why are we going through all this nonsense.
I don’t subscribe to the conspiracy theory of life generally, but this sh** show has me stumped !
Mortality is low for young people, but it is not for older people, it’s very contagious and a serious threat to elderly populations. The distancing measures and closures of bars and such will save lives.
I look forward to the day when the British finally figure out the distinction between a “holiday” and a “vacation” (and also, between “pudding” and “dessert”).
The distinction is purely geographical
I understand the 14 day quarantine is on the honor system.
More than 113,000 viral infections in Miami Dade County, Florida. More than 5300 hospitalizations. More than 1300 deaths.
Not many tourists during hurricane season.