COVID-19 Outbreak Puts Europe's Tourism Industry On Brink Of Collapse
Muhammad Irfan 2 months ago Fri 01st May 2020 | 10:39 PM
France, Italy, and Spain are Europe's three top tourism destinations; however, they have also been the three countries in the European Union that have been most affected by the COVID-19 pandemic, which has left the tourism industry on its knees
BRUSSELS (UrduPoint News / Sputnik - 01st May, 2020) France, Italy, and Spain are Europe's three top tourism destinations; however, they have also been the three countries in the European Union that have been most affected by the COVID-19 pandemic, which has left the tourism industry on its knees.
The combined COVID-19 death toll in France, Italy, and Spain has surpassed 75,000, and will continue to rise given the tens of thousands of active cases still remaining. The three nations on the Mediterranean are looking at easing lockdown measures over the coming weeks as the number of active cases in each country begins to fall, but it remains to be seen how long it will be before borders can open and tourists can return.
The collapse of the tourism industry raises big questions for the European Union. According to Croatian Tourism Minister Gari Cappelli, who chaired a meeting of ministers of tourism from the EU's member states on Monday, the sector accounts for 10 percent of the bloc's GDP and employs 12 percent of the workforce.
The COVID-19 outbreak has grounded planes, shut restaurants, cafes, and hotels and Europe's beaches have been left empty. It now falls on Brussels to provide relief to the embattled sector that is so crucial to the bloc's economy.
TOURISM SECTOR REACHES GROUND ZERO
"At this difficult time, human life and humanity should prevail above everything. The tourism, travel, transport, and entertainment ecosystem have reached ground zero as a result of coronavirus," Buhalis told Sputnik.
Businesses across the EU are desperate to reopen and return to some sort of normalcy after almost two months of lockdown, but Buhalis said that this can only take place once the disease is fully under control.
"The majority of the business and the regions that depend on tourism and travel are desperate to reopen and go back to the 'new' normality. They can only do when it is safe to do for staff, employees, and residents of destinations but also of transit and origin regions," he said.
The European Union must step in and provide support to the nations and regions that will be most affected by the loss of hundreds of billions of Dollars in revenues as domestic and international tourists stay home, the academic said.
"The European Union and governments need to take care of these regions and coordinate efforts for the support of this ecosystem that is responsible for a significant proportion of employment but also recreation and cohesion of society," Buhalis remarked.
On April 22, Italy's Interior Minister Luciana Lamorgese stated that the country was hoping to welcome tourists in July and August, so long as hygiene measures are observed. While this may be too early for a country such as Italy, which has been the epicenter of the disease in Europe, Buhalis suggested that other countries may begin to welcome tourists for the summer season.
"Greece, Cyprus, and Portugal have managed the coronavirus crisis remarkably well and fast. The number of cases was limited on their territory and therefore, these countries are expected to be able to reopen their holiday resorts early and welcome tourism activity," he said.
For this to happen, flight restrictions will need to be lifted and the public will have to have the confidence that they will be able to travel safely, without the risk of contracting the disease.
Introducing measures to support the EU's tourism sector is a significant challenge as some countries are much more reliant on the industry than others. Tourism represents only 2.6 percent of Slovakia's GDP, but the sector contributes more than 20 percent of Greece's GDP.
The impact of the pandemic has affected those who work in the hospitality industry and the travel sector equally. Travel agents, airports, and airlines have lost all of their business and are all looking to their respective governments for help.
Subsidiaries of Norwegian Air, one of the pioneers of low-cost long-haul travel, have applied for bankruptcy. Virgin Atlantic owner Richard Branson has pleaded with the UK government to offer a bailout to the beleaguered airline, with the billionaire even offering his private island in the Caribbean as collateral. The UK's flag carrier, British Airways, is looking to cut up to 12,000 jobs amid the current epidemiological and economic crisis.
Belgian airline Brussels Airlines, a subsidiary of the German giant Lufthansa, is looking for a government loan worth 290 million Euros ($319 million) to assure the company's survival. On April 24, the governments of France and the Netherlands confirmed that Air France-KLM, a conglomerate of the flag carriers of both countries, will receive a 10-billion-euro bailout as their planes remain grounded.
These costs all add up, and it remains to be seen if passengers will even have the confidence to take to the skies when borders reopen.
On April 22, the executive director of the World Health Organization's (WHO) Health Emergencies Programme, Michael Ryan, said that he expected international travel to begin only between countries that have a similar control on the COVID-19 outbreak, and were both displaying a downward trend in active cases.
Furthermore, he asserted that travel would be inter-regional, potentially leaving the wide-body planes of Europe's flag carriers on the ground for longer.
REFUNDING TOURISTS PROVING DIFFICULT ISSUE
Governments and travel agencies are also hampered by the issue of refunding passengers who had booked summer trips before the outbreak of COVID-19. Tourists who had their vacations canceled are looking to get their money back, as many people face job insecurity.
This is a particular problem for Europe's charter airlines, which often run close to the edge of profitability.
Europe's largest travel agent, TUI, has also asked for state assistance to navigate the ongoing crisis, particularly as disgruntled customers await their refunds. Many have been frustrated by the offer of travel vouchers, allowing them to rebook their trips before August 31, rather than cash.
"We are asking for the understanding of our customers and it functions well. They accept and understand that the circumstances are exceptional, especially since the situation changes frequently. We send the people with reservations a voucher by email and ask them to reserve again only once they have received the email. The new ticket must be for the same person," Chantal Vandemoortele, a TUI travel agent in Brussels, told Sputnik.
However, she expressed hope that TUI customers will be able to travel over the summer and referred to the role the company has played in repatriating tens of thousands of tourists who were left stranded abroad.
"We still hope for the skies to open in June and that sunny destinations will be open to tourists. We have repatriated some 30,000 people in March from around the globe and travelers are very thankful. We ask for patience," the travel agent said.
EUROPEAN COMMISSION TAKES ACTION
According to the EU's foreign policy chief Josep Borrell, the European Commission has played an active role in repatriating as many as 300,000 tourists who were caught out by the flight cancellations.
"Most tourists have now been safely brought home. There are still some repatriations to finalize from far away, and dual-nationals from North Africa who want to come back to Europe, that are having difficulties with their national authorities in North Africa to be allowed to travel, but the task is nearly completed," a European Commission spokesperson told Sputnik on Friday.
While the majority of EU residents have returned home, there is little clarity whether these citizens will be allowed to travel in the summer, either for business or leisure.
"As for the summer tourist season, we do not yet have a clear vision of what will happen. Most European countries have postponed the reopening of tourist charter flights and travel agencies ... Countries such as Spain, have announced that they would probably close their territory to foreign tourists this year. It would be dramatic, of course, for the tourism sector in Spain, which represents more than 11 percent of GDP," the spokesperson said.
To a large extent, EU citizens have diligently observed the social distancing measures imposed to curb the spread of the coronavirus disease. However, this might be in vain if Europe is told that there will be no chance of foreign travel this summer, the spokesperson said.
"Another worrying issue is the fact that European citizens have been very responsible, adhering to the confinement rules for months now with the summer holidays as the beacon of light at the end of the tunnel. Hearing now that they would not be allowed their holidays on the beach would be a terrible disappointment and they might feel less motivated to respect confinement measures," the spokesperson remarked.
European Commissioner for Internal Market Thierry Breton on April 21 urged the EU to take greater action to save the bloc's tourism industry. The commissioner said that 1.6 trillion euros ($1.7 trillion) would be required to fund Europe's economic recovery after the COVID-19 outbreak, and a significant portion of these funds must be diverted to the tourism sector.
Airlines, travel agents, and hospitality staff across the continent are eagerly waiting to see if Breton's recommendations are taken forward.
EUROPEAN TOURISM MINISTERS PROPOSE CREATIVE SOLUTIONS
Breton was present at Monday's meeting of European ministers of tourism. He stated that a new Marshall Plan was needed for the industry, referring to the economic program that funded the continent's post-World War II recovery.
Croatian minister Cappelli, the meeting's chair, cited that more than three-quarters of international trips taken by EU citizens were to another member state nation. Consequently, the minister proposed establishing internal tourist corridors between EU member states, although he added that this proposal would require consultation with health officials.
Cappelli also called for establishing homogeneous rules for all forms of mobility, including air, sea, and land. The sector must also receive assistance as part of the EU Recovery Plan, he said.
However, individual countries will retain a large degree of sovereignty over their tourist industries. Cappelli stated that common measures must not supersede the laws and regulations of individual member states, which may also impact Brussels's ability to provide broad assistance to the sector.
During the meeting, tourism ministers also lent their support to a harmonized solution for the refunding of travelers whose trips were canceled, and for support measures to prevent travel agencies and other businesses from going bankrupt amid the current crisis, although few practical measures were announced.
Lawmakers face the challenging task of balancing an economic sector that is in crisis and the public health implications of allowing domestic and international travel.