Covid-19 has had an enormous impact on our motor economy: Tourism. In the next paragraphs, we will expose how this pandemic has affected the different autonomous communities.
Over the last decades, tourism has turned into an essential part of modern life. For instance, the last figures retrieved from the World Tourism Organization (UNWTO, 2019) reveal that in 2018 there were 1.4 billion international travellers who went on vacation. It represents a 6% rise in comparison with the previous year and meaning that the international demand for tourism is increasing significantly as time goes by.
Índice de contenidos
Has Covid-19 affected all of Spain equally?
The answer is no. While is true that tourism is an important economic sector throughout the Spanish territory, in Spain there are cities more tourism-dependent than others.
In 2020, the arrival of tourists to Spain from abroad fell by 77% compared to 2019. However, in Andalusia, the Community of Madrid, Catalonia and the Balearic Islands the drop was even greater. In fact, in the Balearic archipelago, one of the most affected region, the loss of inbound tourism compared to the previous year exceeded 87%.
Covid-19 and economic impact
In general terms, tourism has an important influence on the economy worldwide. In the case of Spain, the weight of this industry in the country’s economy reached 154,487 million euros in 2019, which was 12.4% of GDP. Indeed, the characteristic branches of tourism generated 2.72 million jobs, 12.9% of total employment.
In this map, there is evidence that the tourism industry is relevant to the Spanish economy. Moreover, and most importantly, it is easy to find those regions more tourism-dependent. For instance, the case of the Balearic Islands or the Canary Islands. It is estimated that the Balearic Islands and Catalonia will be the unfavourable impact they experience, due to the high presence of foreign tourism. The contribution to GDP is forecast to fall -80.5% and -68.5%, respectively.
In general, the restrictions imposed by the COVID-19 pandemic has resulted in important restrictions when travelling. According to Hosteltur (2020), three of the most affected airports in Europe are Spanish airports. More specifically, we are talking about the airports of Palma de Mallorca, Barcelona / El Prat and, Madrid /Barajas. These are the airports that have suffered the greatest decline in terms of passenger arrivals. An especial case is the islands. The main feature of these destinations is the insularity. Therefore, it makes them highly dependent on tourists arriving from maritime and air transport.
Covid-19 impact: The islands
The pandemic Covid-19 has affected very significantly the two Spanish archipelagos: The Canary Islands and the Balearic Islands. Taking a look at the statistics, the GDP of both destinations is highly dependant on tourism. Consequently, both destinations have suffered the most the effects of the pandemic. For instance, 112,800 jobs have been destroyed in the Canary Islands; moreover, the unemployment rate rises to 25.22%. In the case of the Balearic Islands, there are 47,200 more unemployed in the year or what is the same, an increase of 75% compared to the end of 2019. For example, in this region, the unemployment rate rises to 17.34%.
Measures to support the sector in Spain
The central government has carried out a series of measures to alleviate the effects of this pandemic. in this case, we are talking about ERTE (in other words, Records of Temporary Employment Regulation). 8 out of 10 tourism workers in Spain are in ERTE. However, the professionals of this sector see these measures as insufficient. In comparison to other European countries, the Spanish government presents the weakest recovery plan.
For instance, Germany supports the losses of this sector with 11,000 million euros a month in non-refundable funds since the beginning of November 2019. Moreover, the country has lowered in this sector the VAT from 19 to 5%. The contribution of this sector to the German GDP is only 3.9%. Another example would be our neighbours, France. The government has a specific plan for tourism, which includes for example, for SMEs in these sectors (hotel, catering and tourism) an exemption from social security contributions during the closing period, from March to June.
Therefore, the CEHAT (Spanish Confederation of Hotels and Tourist Accommodation) has proposed different protects to reactivate tourism with European funds. These projects focus on digital transformation, ecological transition, and social and territorial cohesion.
Read more about these projects here.
In addition, the large Spanish hotel companies (Riu, Melià, Iberostar and Barceló) have come together to get 2,000 million in EU funds. More specifically, with this project, they intend to promote the renewal and repositioning of tourist destinations considered mature.
Know more about the project here.
Stay tuned to our blog to learn more about the international business world!