Massive Job Losses Expected as Tourism Between Spain and Portugal is Suspended Due to the Coronavirus

THE SPANISH AND PORTUGESE TOURIST INDUSTRIES ARE BRACING THEMSELVES FOR AN ‘UNPRECEDENTED AMOUNT’ OF JOB LOSSES AS BOTH COUNTRIES SEAL OFF THEIR BORDERS IN AN ATTEMPT TO CURB THE SPREAD OF THE CORONAVIRUS

Portugal declared its state of emergency 5 days ago and sealed off its borders as EU leaders agreed to restrict most travel into Europe for at least 30 days in an unprecedented move. The aim was to slow down the spread of coronavirus in Europe and globally and to limit the deadly outbreak’s impact on the bloc’s internal market of open borders.

Portugal welcomed 6.8 million foreign tourists in 2010. By 2016, this figure had risen to 18.2 million, an increase of 168 per cent. Overall, only Japan experienced a more significant increase in visitors this decade. This has changed dramatically in the last few weeks as the measures kicked in to slow down the spread of the coronavirus.

To support these figures, the Portuguese Minister of Economy, Manuel Caldeira Cabral, said that tourism receipts had increased by 17% in 2017 and 14% in 2018. It is hard to imagine that before 2013, in Lisbon, one building in three was empty.

British Tourism in Portugal

The single largest source of tourists to Portugal is the United Kingdom, which supplies one-fifth of all visitors to the country. It is not clear what effects Brexit and now the coronavirus may have had on British holiday plans, but visits to Portugal from the UK dropped by 7.3 per cent last year. A fall in the pound may further deter British travel to the eurozone.

To pre-empt any negative effects ahead of Brexit, the Portuguese government has pledged to maintain visa-free travel for British visitors and plans to open separate customs lanes for British passport holders in Algarve and Madeira.

Portugal also passed a law ensuring the rights of British citizens living in Portugal in the event of a no-deal Brexit. On the flip side, instability in competitor markets has proven favourable to the Portuguese tourism industry. Due to perceptions of increased security risks, tourism to France, Tunisia, Egypt, and Turkey, has declined since 2010, while Portugal, Spain, Italy and Greece, have all seen upturns.

Spanish companies, especially in the Canary and Balearic Islands, and Portugal brought in an annual 3.2 million visitors, they fear the closer of the borders could lead to millions of euros in losses, while Spain’s CGT labour union has also warned that thousands of jobs could be at risk.

Last year, nearly 84 million people visited Spain, 18 million from the UK. Tourism is the nation’s third-biggest industry, accounting for 11% of GDP. Even before the severe restrictions, including schools closures and bans on large public events, announced in the Madrid area, bookings were down.

According to the Spanish hoteliers’ confederation, reservations were already down 20-30%, in particular for holidays in Catalonia, Valencia and the Balearic and Canary Islands, in February compared with last year. Hotel bookings were down 24% in Madrid and 20% in Barcelona.

“The impact is really significant, especially on conferences and visitors travelling long distances,” Ramón Estalella said on behalf of the confederation. “If it’s only for a month, the impact won’t be so great, once confidence is restored. But it is impossible to predict. Every day there are new announcements from different countries and regions and government measures that change the outlook.”

The EU Helps out

In order to mitigate the economic fallout and keep the supply chains open, the EU leaders also endorsed a proposal by the commission to open up “green lanes” – fast-track lanes at borders for the transportation of goods.

“It is absolutely crucial that we unblock the situation, we know that too many people are stranded within the EU and have a problem to go back home, they have to be supported,” von der Leyen said.

“We have a lot of traffic jams of lorries transporting goods, the flow of goods has to be swift,” she added. Von der Leyen said she was optimistic there will be “positive changes” in the next days on the internal movement front.

But she also acknowledged that “it will take quite a while until we reach the lifting of the internal borders.”

Meanwhile, cross-border workers will continue to be allowed to move across frontiers, the leaders agreed.