Covid threatens catastrophe for Spanish tourism

Second summer without holidaymakers would cripple economy reliant on tourists

The Spanish town of Nerja is sometimes referred to as the Jewel of the Costa Del Sol.

A former sleepy fishing village, over the past few decades it has been transformed into a thriving tourist town. Thriving, that is, until the pandemic hit.

The clifftop Balcon de Europa promenade has been without its usual throng of pedestrians, while on the town’s beaches there has been no danger of failing to find a spot to plant a deckchair.

Gema Garcia, tourism councillor at Nerja town hall, spells out the concerns of many. "Nerja doesn't have other industries," she says. "Everything is related to tourism. If the hotels don't have guests, there's no one to go to the ice cream parlour or the fruit shops."

Nerja, Costa del Sol, Malaga Province, Andalusia, southern Spain, View from the Balcon de Europa, or Balcony of Europe, to the Playa Calahonda, Calahonda beach), It is the height of the season and the beach is packed with holiday makers. (Photo by: Education Images/Universal Images Group via Getty Images)

Now, like the rest of Spain, this Andalucian town built on tourism is holding its breath and hoping order will be restored by summer.

However, it is far from guaranteed, with many would-be holidaymakers unwilling or unable to travel. This week alone, the British government told its citizens not to make any plans for a summer holiday abroad.

The question for many businesses, and the wider Spanish economy, is can they survive if this year is also a wipeout?

The 83.5 million tourists that visited Spain in 2019 – estimated to have brought in more than €46 billion ($55.70bn) – made it the second most popular destination in the world. Tourism accounted for more than 12 per cent of the country’s economy prior to the pandemic.

Benidorm

 

But figures published this month by Spain’s national statistics office revealed that tourism last year dropped 77 per cent from the year before, taking the country back to the levels of the late 1960s when it was still under Gen Franco’s dictatorship. As a result, Spain’s gross domestic product plummeted 11 per cent plummet in 2020.

According to data, 40 per cent of Spanish hotels remained closed throughout 2020. The rates were particularly high in Madrid, whose hotel trade association says that 70 per cent of the city’s properties have not reopened since the first lockdown in spring 2020, costing the sector around 85 per cent of its turnover.

For a country with a 70 per cent Catholic population, Easter is typically big business. But this year’s Semana Santa (Holy Week) celebrations have already been cancelled in major cities like Seville and Malaga, whose festivities are together estimated to be worth a combined €500 million. The absence of other festivals like Las Fallas in Valencia and San Fermin in Pamplona will also leave a hole in Spain’s spring turnover.

Barcelona's La Mar Bella Beach

 

Tourism alliance Exceltur is lobbying the government for a rescue plan worth €5.3bn of direct, non-refundable aid. Its recent report said that accelerated vaccination in order to achieve herd immunity by summer was vital for the sector.

Not everyone has been deterred by the circumstances, however. Despite a challenging 2020, the Four Seasons opened its first Spanish property in Madrid last September, part of a €500m development that also includes a luxury shopping mall and 22 private residences; and the new Mandarin Oriental Ritz plans to welcome guests from the spring. Equally optimistic ventures are found on the Balearic Islands, where the 184-bedroom OKU Ibiza plans to open ahead of summer, as does Can Ferrereta, a smaller boutique property in Mallorca that had to postpone from last year.

Barcelona's Las Ramblas

 

Given the lack of international visitors, such grand openings are instead focusing on nearby audiences. “We are very closely connected to the city,” Greg Liddell, general manager of Mandarin Oriental Ritz Madrid says. “Our ability to cater to the local market allows us to open up all our outlets.”

But as the third wave of the pandemic sweeps across Spain, it is uncertain how much can realistically change in the coming months. On Monday, the health ministry recorded the highest number of Covid-related deaths in one weekend since April 2020. The confirmed death toll has reached more than 64,200 with more than 3 million cases. The more infectious UK variant is spreading fast, already making up around half of new cases in some parts of Madrid, the region’s health department says. With Catalonia’s regional elections approaching on February 14, epidemiologists are concerned that polling stations will become infection hotspots.

Madrid's Barajas Airport

 

Questions also linger around Spain’s vaccination drive. Pfizer and Moderna’s shipment delays in January slowed down the national campaign and Spanish health authorities have now ruled out the Oxford/AstraZeneca vaccine for over 55s until greater efficacy is proven. In a blow to public faith in the inoculation process, several government officials were discovered to have jumped the queue for the vaccine.

Meanwhile, it is rumoured that the UK may add Spain to its red list of high-risk countries to which direct travel is banned, a move that would cause considerable concern seeing as British visitors fell by 82 per cent last year.

Javier Navarro, an economics professor at the University of Nebrija, says that many are debating whether Spain should continue to focus on tourism or start investing in other sectors. “One of our other main exports is automobiles,” he says. “There are big efforts to be more competitive in technology and there is a lot of investment going into the food sector. But these are highly strategic questions – you cannot change your economic model overnight.”

For Britons living and working in Spain, the pandemic has been a mixed experience.

Jerome Evans, a filmmaker from London who lives in Ibiza, says the impact of Covid on the economy can be seen on the streets. “The tourism industry here took a massive hit, numbers were down by around 90 per cent,” he says. “A lot of people are struggling. There's a lot more homeless people, a lot of people here are losing their homes, they can't afford to pay their mortgages.

“The government is walking a tightrope because if they lift the restrictions too soon, then coronavirus numbers could spike again. But if they lift the restrictions too late, then they might lose another tourist season, which would be disastrous.

“Ibiza has always been this really exuberant place full of life. And that life has really ceased for the time being. Just walking around empty streets with no restaurants open in the cafes, it does really give the place a completely different feel.”

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That said, he is optimistic. “The magic of the White Isle is undiminished,” he says. “After a year without tourism the island looks more stunning than ever – the sea is crystal clear and dolphin, whale and flamingo populations have hit record levels. People come to Ibiza for fun, escapism, and wellness, and after the year we've all had I think those things are more in demand than ever.”

Sadeedo, a DJ from London who has been in Ibiza for four years, saw his number of gigs drop last summer, but he too is looking on the bright side.

“I'd like to think that it's just kind of on hold for a moment. I'm definitely hopeful that we're going to have some kind of season without expecting too much.”

With the tourism sector standing before yet another precarious year, it is a sentiment with which many will agree.

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