Europe’s tourist resorts are desperate for visitors. Travellers from northern Europe can expect to be greeted with a very warm welcome, if not quite the open arms of a hug, given Covid restrictions.
But one holidaymaker who might not receive the friendliest service is Angela Merkel.
The German Chancellor is leading a push to block the British tourists who usually spend lots of cash during their week in the sun, calling for an EU-wide quarantine on arrivals from over the Channel due to the danger of the Delta, or Indian, coronavirus variant.
She has won the backing of her French counterpart Emmanuel Macron to exclude visitors from Brexitland even as EU nations try to open up within their common borders.
Merkel and Macron are a powerful pair, but do not expect the rest of the eurozone to go along quietly with the proposals.
Arancha Gonzalez Laya, Spain’s foreign minister, appeared to confirm the country has no plans to turn away Britons. “At the moment we are maintaining the measures which enable British citizens to enter our territory,” she said firmly.
There are reports of officials from tourist-reliant nations saying in rather stronger terms that Germany does not appreciate the urgency of the situation, as its economy does not depend on British visitors.
Claus Vistesen at Pantheon Macroeconomics says the costs will vary hugely between countries, as their economies are structured very differently.
“It is a fairly easy remark for [Merkel] to make because not many tourists are coming to Germany, relative to those going to Spain and Italy,” he says. “British tourists are a key source of income – especially in Spain.”
In the pre-Covid era Brits were the biggest visitors to Spain and Portugal, accounting for 15pc and 14pc of all tourists respectively, according to HSBC.
Meanwhile Germans are the biggest patrons of Italian and Greek resorts at 15pc and 13pc respectively, with Britain providing 6pc and 9pc of their visitors respectively.
Blocking Brits threatens to leave a big hole in those economies. Andrew Kenningham at Capital Economics says it depends on the duration and details of any block, but a ban for a year would knock about 2pc off Spanish GDP.
“We estimate that foreign tourism contributes around 8pc to Spanish GDP,” he says. “Foreign tourism contributes a lot more to Greece (over 14pc of GDP) and Portugal (nearly 12pc) but much less to Italy (just over 3pc of GDP).”
His colleague Jessica Hinds notes that Spain is already having a dire year even before any mooted quarantine on Brits.
“The Delta Covid variant has quashed hopes of a “normal” summer tourism season for Spain,” she says. “As the peak months approach, flights are still down over 50pc on 2019 levels.”
Some relief could be on the way from Germans and other EU nationals – a new certificate allowing travel within the bloc may help. But for countries which take more visitors from Britain than any other nation, that will only plug some of the gap.
The UK’s own rules are just as big a concern when it comes to many tourist hotspots.
“It is weighing the good news as the green list becomes longer and more people are vaccinated, against the reality of a consumer today still not knowing if they can book a holiday in August,” says Vistesen.
“Some will just say, ‘I will book in Cornwall instead because I am sure I can go’. How brave are consumers now in terms of booking in anticipation of everyone being vaccinated and things easing up, or waiting until next year?”
He expects tourist numbers in countries such as Spain to come in at about 50pc to 60pc of their 2019 level this year.
If everything goes right – including the certificate for travel within the EU, the UK opening up its green list further, vaccine progress continuing and ultimately some form of agreement for Brits to visit the continent more easily – then the numbers could rise.
Vistesen estimates a “best case scenario” of 75pc to 80pc of normal tourist levels over 2021 in such a situation.
By traditional standards, that would still represent a big drop, and means no real return to normality for the industry for another year.
“The tourism sector will still be holding back overall GDP growth even as domestic activity rebounds,” says Hinds. “But next year’s tourist season is more promising, though, and Spain’s economy might be just shy of its pre-Covid size by mid-2022.”
For now, it depends on whether the Germans get their way.
