The tourism sector has been one of the hardest hit by the Coronavirus lockdowns. The European Commission has estimated severe loss of revenue in European tourism that supports some 27 million jobs across in the EU. But how is the EU providing support for this important European sector? This Just the Facts in our series of Covid-19 briefings will unpack and explore this pressing issue as the fallout from the pandemic continues.
Introduction: Tourism and the fallout from Covid-19
As countries across Europe begin to lift Covid-19 restrictions, talk has turned to what tourism will look like in the ‘new normal’. Over the past few months as Covid-19 has swept across Europe, countries have implemented travel restrictions, such as those on air travel, which has had a severe impact on tourism. In April, the European Commission estimated that revenue for airlines and cruises has fallen by 90%, with losses for travel agencies at 70% and 50% for hotels and restaurants. These losses are compounded considering the sector’s economic importance, accounting for 11% of the EU’s GDP and 27 million jobs across almost three million businesses, many of which are small businesses. Furthermore, some EU regions and islands, are far more reliant on tourism that in other parts of the EU.
In April, European Commissioner for the Internal Market, Thierry Breton stated that, “We therefore have a collective responsibility to mobilise all the tools at our disposal to respond to this pandemic”. He proposed that a “Marshall Plan” type of recovery will be vital to Europe and the tourism sector’s recovery.
What will the recovery look like?
In May the European Commission published their ‘Tourism and Transport’ package outlining how the tourism industry could be sustained while also taking health precautions into account. This guidance is aimed at owners of small and medium sized businesses, tour operators, transport providers and tourists alike, so that all parties are both prepared and reassured for the upcoming tourist season.
As many borders that previously accommodated free movement between EU Member States were subject to travel restrictions, the European Commission guidelines include a phased plan to lift these restrictions. If it is not possible to lift travel restrictions across the board, movement across borders in key areas where people previously crossed the border routinely for personal or economic reasons will take precedent. Furthermore, Member States with similar low infection rates could establish ‘travel corridors’ allowing citizens to travel between countries.
This kind of measure would be subject to various conditions including the principle of non-discrimination and the mutual ability to ensure that containment measures are adhered to. Containment measures may involve additional public health measures at border crossings and airports, such as reduced numbers of passengers being permitted on public and private transport, widespread availability of hand sanitiser and mandatory wearing of face masks.
The European Commission has also recommended that at travel destinations themselves, plans should be in place to ensure sufficient health care capacity for additional tourists. This includes, an effective test and trace policy and the ability to monitor tourists’ movements if necessary, trough contact tracing apps or other means. Staff in hotels and at tourist attractions should receive additional health and safety training and a clear rota system that minimises risk both to workers and customers and allocates time ‘slots’ for attractions and restaurants.
For business owners, tour operators and restaurateurs
Many businesses within the tourism sector have faced considerable financial difficulties in recent months. Businesses in certain EU Member States may have already been able to avail of grants or loans worth up to €800,000 as provided under the ‘Temporary State Aid Framework’. The European Investment Bank will also play a large role in getting small and medium sized business back on track as the EU has set aside €1 billion as a loan guarantee.
The EU’s Coronavirus Response Investment Initiative will allow EU Member States the flexibility to direct funds to businesses and local authorities to help them adapt to proposed public health measures. Other pre-existing tools such as the European Regional Development Fund which has provided support to many tourist initiatives in European regions down through the years.
The next steps
Despite this comprehensive roadmap, challenges exist, for example, how different sets of guidelines have been issued by each Member State. In Italy, for example, travel abroad has been permitted since 3 June, Czechia requires a negative test to Covid-19 to be provided by anyone seeking to enter the country, travelling from a country they deem as medium or high risk. Greece hopes to allow entry of tourists from outside the country by 1 July.
Covid-19 is likely to result in more people holidaying at home, to which the European Commission have proposed various initiatives to help boost local tourism. Proposals include vouchers for citizens favourite attractions, as well as a commitment to existing programmes such as the European Capital of Smart Tourism initiative, which encourages innovative ways of looking at tourism in EU cities, or the sustainability focused European Destinations of Excellence.
Although the tourism sector has been badly affected by the Covid-19 pandemic, the package put forward by the European Commission offers clear guidance on how tourists and businesses alike can resume activity this summer. Given the importance of tourism in the European economic and cultural spheres, this kind of support from the EU is vital to ensure tourism’s bounce back in Member States in the months ahead.