Tourism activity represents a considerable part of the economy in Italy, Spain, Portugal, and Greece.The sector accounts for between 6% and 8% of these countries’ GDP directly and for further 8% to 13% indirectly, representing a major component of services exports.

Countries have been forced to take restrictive measures to halt the rapid spread of the coronavirus since the outbreak of the global pandemic. As a consequence, travel activity and demand plummeted in the first half of 2020, with tourist stays almost at zero year on year in April and May (Figure 2). The hospitality industry has been one of the hardest-hit sectors, with the plunge in demand causing many hotels and accommodation sites to remain closed throughout most of 2020. The Mediterranean countries benefited from a brief up-tick in demand as governments eased the most stringent restrictions during the summer and borders gradually re-opened, although annual levels remained well below those of 2019.

However, the health situation deteriorated rapidly in autumn and the tourism rebound came to a halt. Overall, last year’s tourist arrivals are expected to have fallen between 60% and 80% in the four most affected Southern European countries and to have contributed significantly to the countries’ GDP contractions (Figure 1).

What will the tourism recovery look like in the Southern countries?
We expect some rebound in tourism activity from late Q2 and early Q3 2021 as restrictions are gradually eased, allowing mobility to pick up, but the recovery outlook for the tourism sector remains clouded. According to Oxford Economics’ Tourism service, we expect substantial yearly growth in international arrivals to Europe during 2021, which are very relevant for the Mediterranean countries, but total nights in the region will continue to remain over a third below 2019 levels.

Confidence in the accommodation and travel industries in the Mediterranean region recovered only partially during the summer due to reduced infections rates, but then deteriorated again due to further spread of the virus and the general health situation. The availability of a vaccine gave a clear boost to confidence at the end of 2020, but initial delays in production and distribution led to slow vaccine rollouts in many European countries.

We think sentiment will take some time to restore completely as current travel restrictions have been extended and uncertainty about the future economic situation remains high. Expected demand for accommodation over the next three months is slowly improving following the second yearly plunge recorded in November and the new round of lockdowns that were reimposed in most European countries. However, hiring intentions remain very weak in the sector. The boost to confidence from a smoother vaccine distribution and improved health conditions will be a key element for the economic recovery of these Mediterranean countries, especially the tourism sector. The level of restrictions and travellers’ perceptions about inbound and outbound travel will shape the recovery of international and domestic travel.

Source: https://www.ispionline.it/en/pubblicazione/tourism-hoping-hot-summer-29507