40,000 and counting: How many of Spain’s bars and restaurants will be lost?

Devastated by the loss of customers during the virus crisis, around 40,000 bars, hotels and restaurants in Spain have permanently closed, the hotel and catering industry said Tuesday.

40,000 and counting: How many of Spain's bars and restaurants will be lost?

The figure amounts to 13 percent of such establishments in Spain, a country in which tourism plays a major role in the economy, and where the population tends to eat out very often, Spain's hostelry federation said. 

By the end of the year, that figure is expected to rise to 65,000 — or 20 percent of the total.

“It confirms our worst-case scenario,” said José Luis Izuel, head of Hosteleria de Espana, at a press conference. 

At the height of summer and a month after European borders were reopened, “in popular tourism areas, there are no tourists, that's the harsh truth,” he said. 

In areas like the Balearic Islands, he said, less than half the bars and restaurants had reopened. 

Business was also terrible for restaurants in business districts of Spain's biggest cities, which have remained largely deserted due to people working from home. 

“Working from home is affecting breakfasts, the (late-morning brunch run for) Spanish omelette and churros, and the lunch menu, particularly in Madrid,” he said of a culture in which people often eat out from early in the 

The sector's turnover could be slashed by as much as 50 percent, said the federation, which fears that between 900,000 and 1.1 million jobs, both direct and indirect, could be lost.

Speaking just hours after EU leaders approved a landmark 750-billion-euro ($860-billion) virus recovery deal, industry leaders said they wanted “significant resources” for a sector that represents six percent of gross  domestic product and about nine percent of employment.

The world's second-most popular destination after France, Spain was badly hit by the virus that has claimed more than 28,400 lives and dealt a major blow to its tourism industry, which accounts for 12 percent of GDP.

At the end of June, the government presented a 4.2 billion euro aid package for the tourism industry, mostly in the form of loan guarantees.

But the sector has called for bigger gestures such as transferring funds, tax breaks or even “holiday voucher” schemes for Spaniards to subsidise holiday costs and boost national tourism, as seen in Italy.

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Spain’s middle-class youngsters the most likely to end up poor across all EU

Spain leads the ranking of EU countries with the highest risk of young people ending up in poverty as adults, despite coming from families without economic difficulties.

Spain is the fourth EU country with the highest inherited poverty
Spain is EU country with most middle-class young people who end up poor. Photo: Jaime ALEKOS / AFP

Spain is also the fourth EU country with the highest rate of inherited poverty risk, according to Eurostat, the EU Statistical Office.

Data on intergenerational poverty indicates that there is a correlation between the financial situation of the household you grew up in and the risk of being poor when you reach adulthood and in Spain, there is a strong link. 

The latest statistics available from 2019 show that the at-risk-of-poverty rate for the EU was 23 percent among adults aged 25 to 59 who grew up in a poor financial situation at home when they were 14 years old. This is 9.6 percentage points more than those who come from families without financial problems (13.4 percent). 

READ ALSO: Spain’s inflation soars to 29-year high

How the situation in Spain compares with the EU

Spain has become the EU country with the highest risk of poverty among adults who grew up in families with a good financial situation  – 16.6 percent.

This was followed by Latvia with 16 percent and Italy with 15.9 percent.

That statistics also show the countries where it is less likely to be poor after growing up in households without economic difficulties. These include the Czech Republic (5.9 percent), Slovakia (7.9 percent) and Finland (8.5 percent).

The overall poverty rate in the EU decreased by 0.1 percentage points between 2011 (13.5 percent) and 2019 (13.4 percent), but the largest increases were seen in Denmark (1.9 points more), Portugal (1.8 points), the Netherlands (1.7 points) and Spain (1.2 points).  

On the other hand, the biggest decreases in the poverty rate were seen in Croatia (-4 percent), Lithuania (-3.6 percent), Slovakia (-3.5 percent) and Ireland (-3.2 percent).

READ ALSO: Spain’s government feels heat as economic recovery lags

Inherited poverty

The stats revealed that Spain was also the fourth country with the highest rate of inherited poverty risk (30 percent), only behind Bulgaria (40.1 percent), Romania (32.7 percent) and Italy (30.7 percent).

This means that children of poor parents in Spain are also likely to be poor in adulthood. 

The countries with the lowest rate of inherited poverty risk were the Czech Republic (10.2 percent), Denmark (10.3 percent) and Finland (10.5 percent).

The average risk-of-poverty rate for the EU increased by 2.5 percentage points between 2011 (20.5 percent) and 2019 (23 percent), with the largest increases seen in Bulgaria (6 points more), Slovakia and Romania (4.3 points), Italy (4.2 points) and Spain (4.1 points).

The biggest drops were seen in Latvia (-8.5 points), Estonia (-8.0 points) and Croatia (-2.3 points). 

The largest gaps in people at risk of poverty when they reach adulthood were in Bulgaria (27.6 percentage points more among those who belong to families with a poor economic situation as teenagers compared to those who grew up in wealthy households), Romania (17.1), Italy (14.8), Greece (13.5) and Spain (13.4).