The Bank of Spain is forecasting a 60% fall in Spain's tourism activity this year and sees little likelihood of there being a return to pre-pandemic levels of activity before the second half of 2021.
In the bank's annual report, published on Tuesday, there is a section devoted to tourism. Óscar Arce, the director of the bank's economics and statistics, says that this is because of the weight that tourism has in the Spanish economy. This is not just in terms of the direct contribution to GDP but also because of the fact that for every euro which is not spent on tourism, turnover of another fundamental sector falls by three per cent; such is the extent to which other sectors feed off tourism.
The bank's view is that even if there are no new outbreaks and that countries' de-escalation plans continue to advance, the recovery path for tourism will be very gradual. The bank adds that while there is no effective and large-scale treatment or vaccine for Covid-19, there will be uncertainty regarding possible outbreaks and their impact on tourism.
In order to minimise risk, various sectors, e.g. restaurants and transport, will still be subject to restrictions and will have to adopt measures that will affect their normal performance. This will therefore delay recovery because of the impact on tourism-related companies' short-term profitability.