In recent years, Spain became the second most visited country in the world behind France, leapfrogging the USA on the back of cheap flights, stunning cities and unprecedented mobility between European capitals. It’s not just an impressive statistic, but a profitable one as well.
The country brought in circa $200 billion (USD) on the back of 83.7 million tourists last year. The figure represents over 10% of annual GDP for the entire country, and that figure is in line with France, which estimates at least 9.7% of the country’s gross domestic product derives from tourism.
It doesn’t take an economist to tell you that losing 10% of an entire GDP is serious business, and even more serious for thousands, if not millions of local businesses.
As countries throughout Europe initiate plans to re-open, or loosen quarantine restrictions, tourism is one of the buzzing topics, and the buzz is that Spain will turn away all tourism through 2020. Italy is touting the same notion.
That may be the best answer for world health, but even that isn’t a certainty. Health is worth more than any amount of money, but the lack of access to money or opportunity could cause equal if not greater demise, and there may be better interim solutions. Covid-19 didn’t even exist just five months ago, so isn’t it early to pull the plug on plans eight months out?
Spain is looking at a two phase plan to re-open the country, and Labor Minister Yolanda Diaz has been quoted in recent days with an outlook that suggests no travel through 2020. Travel is currently lumped into plans of attenuated exceptionality, and attenuated normality, the latter of which won’t see a resurgence until 2021.
Italy is examining an equally bleak outlook to Spain, in terms of tourism recovery. The country is currently examining the notion of borders and travel being closed through March 31st, 2021, in a three phase plan which doesn’t open schools again until September, let alone border gates.
In remarks released prior to those from Spain, or Italy, President Macron of France was quoted with an outlook stating travel may not return until September, 2020. At the time, that was the grimmest outlook offered by a European leader, but recent statements out of Spain and Italy eclipse the bleak outlook.
Elsewhere, EU countries have largely avoided speculation, simply extending shelter at home orders for a number of weeks at a time. Most experts simply state it’s too early to tell.
Can EU Countries Afford To Ban Travel?
With a population of over 46 million, $200 billion in Spanish tourism revenue translates to over $4,300 per person. Of course, it doesn’t work that way – but it’s a powerful eye opener to just how big the losses are.
Tabernas, restaurants, cafes and guides throughout the country relied on tourism, and without it, no reasonable amount of economic stimulus would be likely to keep these businesses alive. Tourism brought in roughly double the number of residents, and without those numbers, hardly any business from local clothing shops to buzzy bars can survive.
That’s not even taking into account the brutality brought on by the potential collapse of larger travel businesses like hotels or airlines with hundreds or thousands of employees, all of which may be let go at some point, if a rebound isn’t coming within 12 months. Even national flag carriers could face jeopardy if more expedient time tables aren’t safely reached.
Let’s not forget Airbnb owners either, many of whom took out multiple mortgages during boom times to cash in on unprecedented European tourism demand, all of which could go into default, leading to a widespread housing panic.
Emirates recently became the first airline to initiate covid-19 finger prick tests immediately before flights, for destinations requiring prior testing. The plan isn’t without flaws, and absolutely adds a literal pain point to the sometimes painful experience of international travel, but it could provide a lifeline to countries dependent, and desperate for revenue.
Once global peaks have been reached, proactive screening and or passenger certification could lower risk factors to a significant enough level that a case for border openings would be robust.
If health systems have largely recovered and risk factors are closely monitored, surely there’s a point at which the damage being done from travel bans outweighs the increasingly mitigated risks.
Until a vaccine is released, which could be 18 months from now, there’s no foolproof solution, but agreed standards for travel across borders may be the only thing which keeps the world from a full scale depression. If borders don’t open sometime soon, it’s fair to say everyone might be depressed, not just the economy.