Countries like Spain, like Italy, are countries that are at a difficult crossroads. The tourism sector is a vital sector for the proper functioning of economies, which, in view of the Coronavirus outbreak, leaves it in a difficult scenario, at least if the appropriate measures are not taken. Despite the warnings, some countries continue to ignore the warnings we repeatedly issue to governments that at least subject a large part of their economies to a sector such as tourism, making it a strategic axis for their respective economies.
Spain, for example, has around 15% of its gross domestic product (GDP) dependent on the tourism sector. As we can see, we are not talking about a derisory figure to which we are not paying attention. We are talking about an estimated contribution, according to the WTTC, of 176 billion; to which we must also attribute the year-on-year increases in the sector, highlighting that potential which other sectors lack. A potential that, precisely, led the tourism sector to position itself as one of the priority sectors for the Spanish economy.
If only because of its weight – not because of the measures adopted – tourism is a great engine of growth for the Spanish economy. In this regard, we have not talked about employment, but if we talk about it, we can see how 14.7% of employment in Spain is dependent, in the same way as GDP, on the tourism sector. To get an idea, in absolute terms we would be talking about a sector that keeps more than 2.8 million people employed. As we usually recall, this sector has generated 20% of the total employment created since 2013; in other words, 2 out of every 3 jobs since 2013 have been generated in the tourism sector.
As we see, in light of the data, there are few excuses left for governments like Spain’s to come to the rescue, as President Donald Trump announced this week for his airlines, for his tourism sector. There are few excuses for a sector that, due to the crisis, considers the year lost, as well as its income. And we are talking about Spain, a country that was running as the first world power in tourism, that was asking for the world tourism summit organized by the World Tourism Organization (WTO), but that, when it comes down to it, leaves a sector, which it says it admires, helpless in the face of the storm that is coming.
The year for tourism is not going to be good, there is no doubt about it. But we continue to see governments, except in some cases like the United States, without plans to act strategically to ensure the sustainability of the sector. Until now, as if it were just another sector, the tourism sector was included in the measures taken by the government to help businesses. However, with territories in the country such as the Balearic Islands or the Canary Islands, where tourism represents nearly 60% of GDP, while employment is almost 50% of total employment, a severe crisis for the sector could cause severe problems for the survival of these territories, as well as an increase in unemployment that is more than discounted.
We are talking about the tourism sector. In this sense, we can be reassured to think that we are talking about one of the sectors with the greatest adaptability to economic scenarios. No other sector has ever presented such an adaptation, since we are talking about precisely that element that many criticize, temporariness, has allowed it to adapt and move forward at all times; it is curious that this is the case and that the country continues to believe in plans such as the ban on employment. The tourism sector is a very cyclical sector, which forces it to adapt its workforce according to demand. In this sense, the high seasonality in the country, 32%, improves the adaptation of these companies, conditioning the work of the employees to the existing demand at every moment.
Something similar occurs with Italy. Italy, like Spain, is a country that has 13% of its GDP dependent on the tourism sector. Employment in the tourism sector in Italy does not go unnoticed either. This sector in the country directly or indirectly employs more than 14% of the Italian population, that is, some 3.5 million people. We are talking about the fact that, according to the WTTC, Italian tourism could destroy around 1 million jobs. Along with Spain, the WTTC places Italy as another country that could be most affected by the effect of the Coronavirus on the tourism sector. This ranking is compiled by the source Statista.
As we can see, taking as a basis for the contrast the weight of tourism in the GDP of each country, Italy is, below Spain, at the top of the world ranking of countries more dependent on this sector.
“The coronavirus has erased more than half a century of tourism”. This is how Vittorio Messina, president of Assoturismo, the organization that brings together tens of thousands of companies in a sector that in Italy represents 13.2% of national GDP, equivalent to about 230,000 million euros, according to data from the National Tourism Observatory (ONTIT), concluded his speech a few days ago. Moreover, emphasizing that tourism, as in Spain, will be the sector most affected by the pandemic that befalls us.
And the president is not wrong, but we continue to see the same policies that we see in the case of Spain. Generalist measures, including the sector among the rest of the affected sectors; enabling tools that this sector must dispute with other sectors without preferences in view of its importance in the productive model. A situation that, if not corrected, could damage, even more, a large part of the European economies that, like Spain or Italy, base their productive model on this sector. A productive model which, instead of being cared for and applying measures that try to alleviate the situation, has been included in the common block.
This is not the way to help such an important sector. Based on the professionalization that both countries must undertake, especially Spain because of its massive sun and beach tourism, both countries must also focus their efforts on helping sectors that, in light of the data, are vital to their economies. Governments cannot look the other way, especially in a situation where we are talking about the greatest threat to the tourism sector. It is time to talk about reforms and concrete measures, because if we do not, European tourism is in serious danger, as are their economies.
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Francisco Coll MoralesEconomist
