As Spain battles its second wave of the COVID-19 pandemic, the harsh realities of its economic consequences are now becoming clearer. With the tourism industry in tatters, the Spanish central bank forecasted last week that the country’s economy could shrink by between 6.5 and 12.4 per cent this year alone, and that a COVID induced employment jolt could see unemployment rocket to over 20 per cent nationally.
A longtime foundational sector of the Spanish economy, the tourism industry has ground to a halt without its usual influx of northern European tourists and the implementation of new COVID secure regulations that limit capacity and profits.
The industry now nervously awaits a return to normality without a proper restart scheduled, or clear plan in place to properly reopen Spain’s hotels, restaurants and bars.
Tourism accounts for over 12 percent of Spain’s annual GDP and 13 percent of its employment. But with Spain’s status as the world’s second most popular tourist destination made irrelevant in the midst of a global pandemic, the consequences felt by the industry have been severe.
The raw statistical data on the damage done to the Spanish tourism sector by restrictions on international travel is stark, with just 204,926 international visitors coming to Spain in June, a staggering drop of 97.7 percent from the same month the previous year. As a result, tourist spending in the first half of the year plummeted by 70.6 percent to just €11.84 billion.
It is estimated the sector lost 27.3 million visitors and €28.4 billion in revenue during that same period.
The gentle easing of lockdown restrictions in June did, however, bring an improvement with foreign tourist arrivals over 10 times higher in July, and visitor spending 18 times higher.
But these shoots of hope aren’t without caveats: the demographics of the tourism industry have changed and present a new problem for the industry to face moving forward.
In July the largest group of incoming tourists were the French, who made up around a quarter of all arrivals, followed by Germans and then Britons – usually far-and-away the largest number of tourists – who were deterred when quarantine was imposed on travellers returning from Spain by the British government.
The collapse of Thomas Cook earlier this year has also dealt a blow to Spanish tourism, particularly on the island resorts.
Similarly, as Spain adapts to the nuevo normalidad its hotels, restaurants and bars have been forced to modify their services. Ever changing swathes of COVID legislation: capacity caps, social distancing measures and reduced opening hours – “bloody stupid regulations,” as one frustrated British business owner in Benidrom described them to The Local – have limited the financial recovery many businesses need to make after the lockdown, and the implementation by police can reportedly be “quite intrusive…[and] intimidating.”
Both the fluidity of the pandemic situation internationally and speed with which the British government has U-turned on a series of quarantine measures mean the immediate future of British tourism in Spain remains precarious.
Spain’s south-easterly coast, made up of the famous Costa Calida, Costa Blanca and Costa del Sol, is famous for British tourism and has been hit particularly hard. Travelling between these towns and resorts, it very quickly becomes apparent that Spain’s tourist coast has become the Ghost Coast.
A world famous tourist destination, towns and resorts up and down the south-easterly coast are now faced with economic ruin and the uncertainty of whether things will ever, or can ever, be the same again. Bar and restaurant terraces are desolate and cordoned off; hotels shuttered up and closed; smatterings of brave businesses remain open among the sea of for sale and for rent signs.
It is estimated that 9/10 of hotels are closed in Benidorm, the most famous of the Costa Blanca tourist destinations. Visiting downtown Benidorm today you can sense the eery uncertainty of a tourist destination in flux, a near ghost town operating far below capacity without its usual flood of tourists.
The town is peppered by orange SE VENDE and SE ALQUILER signs, and just a handful of bars and restaurants remain open on the strip for local Spaniards and long-term settled immigrants who have braved out the pandemic abroad.
Across town bilingual signs adorn shop shutters and hotel lobbies explaining that they are closed for business with no indication of when, or if, they might reopen.
Similarly, down in Andalusia it is estimated that around 80 percent of the Costa del Sol’s hotels have closed their doors without knowing when or if they will reopen.
The Costa de la Luz’s tourist hotspots, such as the port city of Cadiz, are surviving on 20 percent occupancy.
The sector is trying to adapt itself to a model of pandemic-tourism. Many businesses are now offering discounted deals and promotions in a bid to attract Spanish domestic tourism in lieu of foreigners, such as this hotel promotion in Benidorm and COVID travel insurance packages in Andalusia, but the reality is that struggling hotels are just one chain in a causal sequence that kneecaps the tourism sector in its entirety.
Without bustling hotels many other small-businesses such as ice cream parlours, souvenir shops, beach bars, restaurants, cafes, and car and bike hire-shops are rendered unnecessary, for now. For how long, nobody knows.
Speaking to business owners up and down the Valencian coast, it was clear that many were opening as much as is legally permitted in order to recoup some of their losses incurred during the first lockdown; have decided that operating below capacity would be a financial impossibility; or have, as we observed in several smaller tourist towns, closed their doors for the last time.
Staff at the Ruta al Sur bar and restaurant in Torrevieja described how despite being able to reopen as lockdown measures were lifted, their incomings have been capped by capacity limits of 50 percent on the terrace and just 30 percent inside.
Its terrace, just a stone’s throw from Mediterranean, was entirely empty when The Local visited, with dusty tables and chairs stacked high where holidaymakers usually enjoy the sun and pump money into the local economy.
Inside the restaurant was just as deserted. One staff member described how they have become entirely “reliant on the permanent expat community” which includes not only Britons but Germans, Swedes, Danes, Norwegian and Dutch.
“They keep everything stable…but we’ve really lost out on tourists,” another said.
Another business owner in Torrevieja described how COVID has made a “massive difference” to their finances, and that the seasonal nature of tourist towns means many businesses may never reopen again as “they are closing down for Christmas anyway.”
This could mean that many bars and restaurants reliant on tourist spending may only open for two or three months during the whole of 2020. “It’s sad,” they added, “but it’s the same everywhere.”
Many business owners that talked to The Local were aware that some businesses might not ever reopen, and could only hope that it wouldn’t be theirs.
This uncertainty is felt two-fold by many British business owners.
In towns such as Villayisosa and Santa Pola, entire expat enclaves exist with English restaurants and waiters and barmen, English menus, foods, supermarkets and urbanisations that don’t possess the bilingualism or business flexibility of Spanish owned businesses that can now pivot towards domestic tourism. Many have, as a result, lost almost their entire client base.
However it seems that smaller, lesser known towns are fairing slightly better than the more traditional tourist traps.
Staff at Disante Lunchroom in the village of La Marina in Elche described how they are “quieter than normal because there’s no tourists,” and although “we’ve seen it slow down a bit we do enough to get by,” but are now entirely dependent on regulars and expats in order to do so. “We are breaking even…at least the doors are open,” said one optimistic member of staff.
Of the expat community, staff described how the loss of short-term tourism means that the only Brits left in Spain are property owners or friends and family of property owners who can afford to stay in Spain for the duration of the pandemic.
But it is not only tourism focused businesses struggling through the pandemic.
While Disante has managed to do “enough to get by” thanks to their loyal regulars and what’s left of the expat community, they explained that many Spanish businesses have also been forced to close.
“A lot of places have closed for good,” they said. Walking down the main road in La Marina, it seems only one in every five or six businesses is open.
Businesses are now stuck in limbo, awaiting an unspecified return to normality. This uncertainty and waiting is only compounded by the prospect of Brexit looming in the New Year, in whatever form it takes, and presents a fresh challenge for businesses struggling through the pandemic.
For many businesses who cater to British tourism, a no-deal could be the final nail in the coffin and alter the face of Spain’s tourism industry forever.
Unfortunately for some of Spain’s bars, restaurants, hotels, tourist traps and destinations, COVID-19 changed everything. For how many of them, and how long lasting the effects will be, remains unclear.
By Conor Patrick Faulkner in Valencia
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