The tourist hole worsens: 106,000 million will be lost and Spain falls back to activity levels of the 90s
Exceltur says the sector is in "a borderline situation" and worsens its forecast by an extra 7.5 billion losses for 2020
The tourist hole will exceed 100,000 million euros in 2020, 7,500 million more than expected in August, and it will mean that tourism activity this year will have fallen to levels of 25 years ago. The pandemic has brought Spain back to a 1995 scenario.
Forecasts for the sector worsen with each passing quarter and, in light of current circumstances, losses of 106,000 million euros are expected. It is the money that companies in the sector will stop entering: hotels, transport companies, accommodation, car rental, leisure … They are 7,500 million euros more than what was expected in August, according to the calculations of Exceltur, an organization that brings together the main companies in the sector:
“By the end of the year it will have fallen back to levels of 25 years ago. We would be in 1995. If we discount inflation, we would go further back, and taking into account that the supply was lower then, the impact of this fall is even worse, “said JosÃ © Luis Zoreda, Vice President of Exceltur.” We are. in the worst period since World War II, “with 2020” on fire and a very complex horizon in 2021, “he added.
These losses account for 67% of the total fall in Spanish GDP that the Bank of Spain estimates for Spain this year. By the end of the year, 750,000 jobs will be at stake, according to Exceltur. Of this figure, they believe, at the end of the year around 60% could be closer to the ERE (Employment Regulation File). “In the last two months the number of people within the sector who have lost their jobs has grown”, said Ã ?? scar Perelli, Director of Studies and Research at Exceltur.
Until the end of September there were 595,000 jobs affected. “These are jobs that are on standby” and account for 50% of the jobs that are now affected in Spain by the pandemic, Zoreda pointed out. There are 281,000 fewer affiliates than in 2019 and 315,000 people in ERTE. The drop in employment in the sector is about 28.5% compared to the same period of the previous year.
This summer, just between the months of July and September, almost 40,000 million euros were lost, representing a drop in billing of almost 70%. “This is a historical collapse, unprecedented in history,” pointed out JosÃ © Luis Zoreda. Since March, when the pandemic broke out, it has accumulated a hole of 84,000 million euros.
Foreign demand has been almost non-existent, while Spanish demand, although there has been, has been 30% below 2019 levels. Only in July and August the nights in hotels fell by 60%, 15,000 million euros of foreign currency have been lost and the passengers that passed through Spanish airports fell by 70%.
With this panorama behind us, “the fourth quarter anticipates a limit situation”, Zoreda has pointed out. The outbreaks, restrictions and the possibility of passing a curfew “promote progressive declines of tourist companies.” Entrepreneurs in the sector expect a 77% drop in this period. “This is not the most powerful quarter but it represents a drop of 16 points compared to what they expected in August. Confidence is decreasing,” Zoreda pointed out.
Urban hotels, for example, anticipate a collapse of 82%, which means having almost zero activity. The main cities such as Madrid or Barcelona concentrate 33% of hotel overnight stays in this autumn period and the Canary Islands, another 25%.
A rescue plan
Exceltur demands “an urgent rescue plan”, given that other countries with less tourist weight “have received much greater aid.” They ask, for example, to guarantee international mobility with PCR tests at airports, a fund for the rescue of companies, apart from that of Sepi, for SMEs in the sector and a VAT reduction for the tourism sector. “It is about stimulating demand and increasing liquidity, but not through credit,” Zoreda added.
Regarding the tourist corridors that the Canary Islands and the Balearic Islands want to create with the main emitting countries, Zoreda has indicated that “the initial approach is good, because the island territories facilitate better control”, but has added that “These efforts must be treated with prudence and not to generate expectations in territories that do not meet the conditions”. “We cannot eat the chorizo before we kill the pig. Until the issuing countries do not accept the condicpnes, we will remain in a declaration of good intentions,” he said.