Spain Battles to Rescue Tourism After U.K. Quarantine Order
Spain’s tourism industry is at increasing risk of being shut down as countries across Europe seek to restrict visits to the Mediterranean nation, following an order by the British government to quarantine visitors.
A steady increase in new infections in Spain last week pushed Boris Johnson’s government on Saturday to order a 14-day quarantine for all travelers from Spain. Other European countries, including Belgium, France and Norway, have also begun advising against visits to certain areas in Spain, and more restrictions could be coming.
The increase in new cases is “definitely an issue” for Berlin too, German Health Minister Dilek Kalayci said in a ZDF television interview Monday.
Prime Minister Pedro Sanchez’s government downplayed the trends as it sought to protect a sector that accounts for 12% of the country’s economy.
“Spain is a safe country,” Foreign Minister Arancha Gonzalez Laya said Sunday. “Spain has outbreaks. As do other countries. What’s important is that Spain is making great efforts to control these outbreaks.”
But the risks are becoming all too real in Catalonia, where the regional government sounded the alarm as it seeks to contain the spread. Over the weekend, authorities put restrictions on nightlife, shutting clubs and requiring bars to close at midnight.
“I wouldn’t make an appearance like this, nor a call like this is, if the situation weren’t critical, if the evolution of the data weren’t highly concerning,” Catalan’s President Joaquim Torra said Monday at a press conference. Still, Catalonia is safe for tourists, he said.
Airline and other travel industry stocks plunged. The Stoxx 600 Travel & Leisure Index dropped as much as 3.6% earlier, the most in about a month. EasyJet Plc was down 14%, while British Airways parent IAG SA fell 10% and Ryanair Holdings Plc slid 9%.
The U.K. order caught Spain’s hotel and restaurant sector by surprise, according to Jose Luis Yzuel, head of the Spanish hostelry association.
“It’s a major blow,” Yzuel said in an interview. “The outlook was already bad,” and the order means there will probably be tens of thousands fewer British tourists, he said.
The U.K.’s decision creates a tense standoff between two countries that need each other. Both their economies are tanking during critical summer months when people are finally emerging from lockdown and ready to spend.
U.K. Foreign Secretary Dominic Raab defended the government’s actions in an interview with Sky News on Sunday: “We took the decision as swiftly as we could, and we cannot make apologies for doing so.”
Taking action was important, “otherwise we risk re-infection into the U.K., potentially a second wave here and another lockdown,” he said.
On Monday, James Slack, Johnson’s official spokesman, said travelers should be aware the advice could change for other destinations if they see a spike in the virus.
“No travel is risk-free and disruption is possible,” Slack told reporters on a conference call. “Anyone traveling abroad should be aware that our travel advice and exemption list are under constant review as we monitor the international situation.”
The U.K. is critical to the Spanish economy -- many of its pensioners have retired along the country’s Mediterranean coast, and British sun-seekers account for 20% of Spain’s overall visitors. The tension takes place against a backdrop of Brexit, with the U.K. negotiating its future relationship with the European Union.
The shock British travel ruling was prompted by new virus cases spiking in Spain’s Catalonia region, home to Barcelona and Costa Brava beaches. Hard-hit airlines relying on those flights to stay afloat are angry at measures they see as overly broad.
“We are disappointed that the government has decided to impose a quarantine requirement for those traveling from the whole of Spain since the increased occurrence of coronavirus is regional rather than nationwide,” EasyJet said in a statement Sunday. The decision “throws thousands of Britons’ travel plans into chaos.”
British Airways said it’s “yet another blow for British holidaymakers and cannot fail to have an impact on an already-troubled aviation industry.”
“Uncertainty and confusion is damaging for business and disappointing for those looking forward to a well-deserved break,” Andrew Flintham, managing director at TUI AG’s U.K. and Irish operations, said in a statement.
Ryanair called the new rule “regrettable.” Europe’s biggest discount carrier on Monday posted a 185 million-euro ($217 million) quarterly loss and said a potential second wave is the company’s biggest fear.
“There are going to be localized breakouts in my view across Europe,” Chief Financial Officer Neil Sorahan said in an interview. “You’re going to see areas opening up, areas closing down and that’s where flexibility is going to be hugely important for ourselves and other airlines.”
Spain is now focusing on damage control. Gonzalez Laya said the country is working with the U.K. government to create air corridors for tourists to the Balearic Islands, home to the popular vacation destinations of Ibiza and Mallorca, as well as the Canary islands.
More than 40% of the 3.65 million seats that airlines have scheduled from the U.K. to Spain in August and September are flying to the Spanish islands, according to Carlos Cendra of Spanish travel analytics firm Mabrian Technologies.
The quarantine announcement by the British government exacerbates the uncertainty holiday-seekers face and many in the U.K. and elsewhere could decide to stay home rather than run the risk of future cancellations, Cendra said.
“The virus is everywhere, and the virus will move when it gets the opportunity to move,” Mike Ryan, head of the World Health Organization’s emergencies program, said at a press briefing Monday. “It’s difficult to get travel measures absolutely right.”
©2020 Bloomberg L.P.