Located on the cusp of Valencia’s biggest beach and its marina, Hotel Neptuno would normally be bustling in late April as Spain’s tourism season fires up. This year, the hotel is just trying to survive.
In the past month, the hotel in Spain’s third-largest city has suffered 95% cancellation of its bookings for this summer. Director Massiel Garcia has furloughed 32 of her 40 employees. Those still working are painting the hotel and making preparations for what she hopes will be an uptick in reservations as Spain and other countries begin to roll back their lockdown measures in the coming weeks.
“This year will be a catastrophe,” said Ms. Garcia.
Hotels, restaurants, souvenir shops, ferry services and myriad other tourism-linked businesses across southern Europe face a similar fate as summer approaches and the coronavirus pandemic continues.
Tourism will fall all across the world this summer, and southern Europe will be among the hardest-hit regions. Travel and tourism account for a relatively large portion of the economy: 15% of gross domestic product in Spain, 13% in Italy and 21% in Greece, according to the World Travel and Tourism Council, while also providing a high percentage of jobs.
Although most lockdowns are expected to end in Europe and other continents by summer, many social-distancing restrictions will continue, including rules affecting travel. And consumers, wary about the virus and hit by deep imminent economic recessions almost everywhere, aren’t expected to return to their previous vacation habits for some time.
“Fear of traveling will probably last longer than the pandemic itself. It’s difficult to expect an immediate recovery of tourism once the lockdown measures are lifted,” said Steven Trypsteen, an economist at Dutch bank ING.
Parts of southern Europe are also starting from a weak economic position. The Italian and Greek economies still haven’t recovered to where they were before the 2008 global financial crisis. The International Monetary Fund is forecasting GDP drops this year of 9.1% for Italy, 10% for Greece and 8% for Spain.
In an optimistic scenario, nearly one-third of jobs in the European tourism sector will be lost, at least in the short term, said Jennifer Iduh, head of research at the European Travel Commission, an association of national tourism organizations.
Via Savona in Milan, normally bustling in mid-April because of the city’s furniture and design fair, was nearly deserted on a morning this week.
PHOTO: ERIC SYLVERS/THE WALL STREET JOURNAL
Spain’s tourism industry generates close to three million jobs, according to the WTTC. The blow to the sector could help push Spain’s unemployment rate even higher than the 27% mark recorded during the eurozone debt crisis if the government doesn’t step in with support, said Antonio Garcia Pascual, a visiting professor at the Johns Hopkins School of Advanced International Studies.
International arrivals to European countries will fall by 40% this year, according to a forecast from consulting firm Tourism Economics published this month. Italy will take the largest hit with international arrivals falling 49%.
Across Italy, which has been under a nationwide lockdown since March 10, more than 95% of hotels are closed, with the sector losing €300 million ($325 million) just over the three-day Easter weekend, according to industry lobby Confindustria Alberghi.
While Italy’s beach and mountain destinations stand to lose the most if travel during the summer is heavily curtailed, the country’s major cities are already reeling.
Via Savona, in the heart of one of Milan’s design districts, would normally be teeming in mid-April with people who come for the city’s furniture and design fair. On a recent morning it was largely deserted, with the silence broken only by the occasional car or food-delivery biker. Nearby hotels, restaurants and a popular museum are shut.
Medical personnel work in the Casal Palocco hospital near Rome. Italy has been one of the countries hit hardest by the new coronavirus.
PHOTO: ANGELO CARCONI/SHUTTERSTOCK
Eike Schmidt, director of Florence’s Uffizi Gallery, expects that curbs on international travel will continue to limit visitors to his museum, normally one of Italy’s most popular, after the lifting of national lockdowns. But he’s hopeful there could be a boom in the coming years, as happened following closures in the wake of a massive flood in 1966, and again following a mafia bombing in 1993.
“I’m expecting this same thing to happen in this case,” said Mr. Schmidt.
For Greece, the hit to one of its most important industries comes just as the country’s economy had begun to improve. The country has contained its coronavirus outbreak better than many other countries in Europe, with 123 deaths recorded up to Thursday, compared with more than 20,000 in Italy and Spain.
Elena Athanasiadou has had all reservations canceled through July for the eight apartments she rents through Booking.com and Airbnb in Thessaloniki, a normally lively city in northern Greece. She hasn’t had a single guest or new booking since mid-March, even for public holidays.
“It’s a disaster,” she said. “We missed March 25, a national holiday in Greece, Easter, and now May 1.”
At Valencia’s Hotel Neptuno, Ms. Garcia is hoping that more domestic tourism can make up for the drop in international tourists, who normally account for about 80% of her guests. Reliance on international travelers is typical across Spain, where they accounted for 56% of spending last year, according to the WTTC.
The hit to one of Greece’s most important industries comes just as the country’s economy had begun to improve. A once-bustling Athens overlook on Tuesday.
PHOTO: LOUISA GOULIAMAKI/AGENCE FRANCE-PRESSE/GETTY IMAGES
In Utiel, a small town inland from Valencia, Maria Jesus Yuste is the third generation of her family to run the El Vegano restaurant, which opened in 1952. The restaurant, which has 11 employees, has been closed since Spain’s government declared a state of emergency on March 14. El Vegano has unavoidable monthly overhead expenses of around €7,000, including loan payments.
A hostel that the family owns had been fully booked between March and June for various festivities in the town, but all bookings have been canceled, Ms. Yuste said.
The restaurant and hostel together will lose €217,000 from March to June, Ms. Yuste said. Now she’s worried about the summer season, but remains defiant.
“It will be a difficult summer, but it won’t be the end of our 70-year history serving clients,” she said.