Germany’s Aid for Europe Starts Now as Tourists Seek Sun
Germany’s Fastest Aid for Europe Starts Now as Tourists Seek Sun
(Bloomberg) -- To Philipp Schertel’s delight, Europe’s coronavirus lockdown is easing, just as family vacation time looms.
“You can’t imagine how happy we are,” said Schertel, 50, a golf course manager from southwest Germany, who has rented an apartment on the Spanish island of Menorca in September. “We’re really looking forward to a nice beach to get away from it all.”
Families like the Schertels can start planning in earnest now that Germany and a raft of other European countries are easing travel restrictions from Monday. A wider question is how many others will feel safe enough to make such trips, and whether that will be enough to save the summer for the southern economies who rely most on visitors.
While the region’s rich northern countries are discussing how to bankroll a recovery fund to help out their southern neighbors, immediate aid for vulnerable economies such as Spain, Italy and Greece may come in the shape of free-spending tourists.
Holidaymakers from Germany alone -- the region’s most populous country, and one of its most prosperous -- could be especially important this summer, with U.K. travelers potentially deterred from trips by having to quarantine once they return home. Last year, Germans spent almost 70 billion euros ($79 billion) on vacations.
Underlining their significance, Spain is allowing Germans to fly to the Balearic Islands over the next two weeks through special “air corridors,” ahead of a wider reopening to visitors.
Price Cuts
It’s unlikely Germans will travel in anything like the same numbers as previously. Some 43% aren’t planning a summer vacation at all, according to a YouGov survey this month. Bookings for packages combining a flight and hotel are down 75% from last year, according to Berlin-based HolidayPirates Group, which runs travel websites in 10 countries.
Across the region, the tourist industry reported a drop of bookings of between 60% to 90%, the European Commission said last month.
Sun, Octopus and Face Masks: Greece Gambles on Rescuing Summer
Germans are traditionally the biggest spending tourists in Italy, and there’s little sign of them planning a return just yet. Giuseppe Roscioli runs six hotels in Rome and Milan, but just two are currently open. He’s cut prices in his 4-star hotels to 120 euros a night from 250 euros.
“People are still uncertain about traveling, companies are trying to save money cutting work trips, and many families won’t be able to afford holidays for a while,” he said.
Flight Searches
But some tentative grounds for optimism are emerging. Flight searches for a trip to Spain in July increased by about 50% in the seven days ending Tuesday, compared with the previous week, according to Spanish travel analytics firm Mabrian Technologies.
The reopening of borders “is an important step back to freedom of mobility and travel,” Norbert Kunz, managing director of the German Tourism Association, said Monday in an emailed statement.
German sales of trips to places such as the Greek islands or Menorca’s larger sister island, Mallorca, have picked up, according to travel site Urlaubsguru.
“I’m a little more optimistic about the sector this summer than a few months ago,” said Goncalo Rebelo de Almeida, a board member of Portugal’s Vila Gale Hotels, which operates 27 properties in the country. “We’re also getting a growing number of reservations from the Netherlands, Germany and expect bookings from Spain to pick up.”
For the southern countries, the stakes are high.
Tourism accounts for more than a 10th of gross domestic product in Spain and Italy, while it’s as much as a quarter of Greece’s. Those three economies were already seen shrinking by more than 9% in European Commission forecasts released last month.
At Jose Alberto Concha’s two hotels in the northern Spanish region of Asturias, occupancy is hovering at about 35% in July and 50% in August. Still, he can see light at the end of the tunnel -- one German client told the hotelier to keep his money even as he canceled his trip for this year.
“He told me, ‘Hold my reservation for next year –- I know the Spanish tourism sector is having a really tough time and I want to do my part to help,’” Concha said. “It’s not going to be a typical summer. We’re trying to salvage what we can.”
©2020 Bloomberg L.P.