You may just remember that the Council of Majorca and various town halls were due to have been in Berlin this week to take part in a promotional exercise that had been arranged after the ITB fair in that city was called off in early March. There was a period of four weeks between the opening day of the fair and the start of this promotion, which has obviously been called off: a period of four weeks which highlights how rapidly the crisis has evolved and also how much this evolution was being underestimated.
There have been the optimistic plans, such as some tour operators apparently being ready to start flying from the start of May. They are utterly redundant. Jet2 have now delayed a recommencement of operations until mid-June, but no one can genuinely know when the tourism season will start; if it will start. An online poll by one of the Spanish tourism magazine websites is fairly evenly split on this: 47% say there will be a season (at some point); 53% reckon there won't be one and that tourism has to look to 2021.
Either way, but especially were there not to be a season, the situation is desperate. The Exceltur alliance for tourism excellence, which comprises leading tourism businesses in Majorca and elsewhere in Spain, e.g. Meliá, is calculating a 41% loss of tourism GDP for the Balearics, equivalent to just over 6,000 million euros. This estimation is, however, based on an assumption that there will be some resumption by July. This is in line with various predictions, but these can't be taken as read.
While certainly not being definitive, one analysis of how this year may pan out comes from digital travel marketing company Sojern. It has analysed searches for flights to Spain that have been made over the past fortnight. Only in September, and more so in October, does this analysis hint at any significant recovery - this is for the UK market. For the German market the indication is recovery in September followed by lower demand in October. The French market is roughly similar to the UK. Sojern has tracked searches for the domestic Spanish market and the Italian market as well. The upward trend for all markets into the new year is very strong, with the exception of Germany. For Majorca, the German market is typically and overwhelmingly the main foreign market in the winter.
The analysis does perhaps show how the travel consumer is thinking. As Sojern points out, there is no increase at present in searches for flights for the main summer season. At this time of year, there normally would be - and obviously so.
There is still hope that Exceltur is right and that July will be when the season gets into some sort of shape. Hotels in Majorca, which had been contemplating opening in June, are increasingly looking at July, but it is very unlikely that if there is a takeoff in July that hotel groups will open all their establishments.
Something similar to this happened at the height of the financial crisis. Groups with a number of hotels, especially if these were in the same area, chose to keep certain establishments shut. Holidaymakers with bookings for these hotels were allocated to others. But the number of hotels that were affected was minimal. This time, the number will, one suspects, be much higher, and such a scenario, right now, is about as good as it may get.
Furlough and financial help
The list of major tourism and travel players needing or receiving financial help and laying off employees grows by the day. In Spain, furlough has the acronym ERTE. There were few among the general public who had heard of either until a short time ago. They've certainly heard of them now. Tui UK & Ireland is laying off some 11,000 employees out of around 13,200. In Germany the number has yet to be specified, but it is understood that this layoff could extend until September. Globally, Tui employs around 70,000 people.
CEO Fritz Joussen has sent a handwritten letter of thanks to employees, suppliers and authorities. "Leading a company without revenue is a real challenge," he writes. The tour operator has secured a bridging loan of 1,800 million euros from the German state-owned development bank, KfW.
The German government is meanwhile looking at nationalising Condor. The airline has asked for at least 200 million euros to keep going, and it is an important operator where Majorca is concerned. When Thomas Cook went under, Condor could have as well. The German government rescued it, and the Polish airline LOT was supposed to have acquired it. LOT has announced that it can't now go ahead with the purchase.
Lufthansa is laying off 87,000 people, two thirds of all employees. Carnival Cruise Lines is seeking 6,000 million dollars to survive. The Aena airports authority has received 1,075 million euros.
What is happening with Airbnb?
Given its global reach, Airbnb is in a way more affected than any other tourism business (not that it necessarily defines itself as a tourism business of course). This month some time, Airbnb is to set up a means for clients to make donations to "hosts". CEO Brian Chesky says that travellers who have used hosts' accommodation previously will be able to "help you financially".
The company is spending 250 million dollars to help hosts defray the costs of cancellations. This relates to cancellations for any reason related to the virus up to the end of May. There is also to be a ten million dollar fund for so-called superhosts, who rent out their homes and need help to pay the mortgage.
Palma's "encouraging messages"
Palma's 365 Tourism Foundation has launched its social media campaign to attract tourists once the crisis is over. The town hall says that it intends transmitting "positive, constructive and encouraging messages".
While this initiative will highlight the likes of culture and gastronomy - themes that Palma 365 promotes for the low season - there will also be beaches and more of a summer focus than normally associated with the foundation's promotions.
4 comments
To be able to write a comment, you have to be registered and logged in
Well, you get what you deserve. Firstly you impose a tourist tax which obviously deters tourists. You would have to be a moron to think otherwise.Then you have people daubing buildings with " TOURISTS GO HOME" Now you have what you want and unwelcome, overcharged tourists will go elsewhere. BE CAREFUL WHAT YOU WISH FOR.
Maybe scrapping the outrageous tourist tax would help tourists return. 14 euro tax in Greece. /96.50 euros in majorca. Guess we're I am going on holiday this despite going twice a year to majorca for the past 15 years. Time to put this tax to history
Excellent article. Two points that I think should taken into account is the most probable increase of the IVA rates which will make things more expensive and the probably fluctuation of the Pound Sterling during the coming months. No doubt taxes will also increase in Germany and the U.K. All these things together will not help matters.
Do the authorities plan to lift the restrictions on all inclusive holidays once the lockdown is over