Southern Europe grapples with changing face of tourism

CORFU, Greece, March 6 (Reuters) – It took one electrical energy invoice to crush Dimitris Diavatis’ hopes that his Greek summer time resort may bounce again to its pre-pandemic well being this 12 months, even with bookings pouring in.

The quantity was greater than double what he paid this time final 12 months when the lodge was not even open. After two sluggish summers, the irony was not misplaced on him: “We can’t make a revenue in an excellent 12 months,” he mentioned. “It will be eaten up by inflation.”

Greece – like the opposite tourism-dependent economies on the euro zone’s Mediterranean fringe – is seeing indicators of a much-needed restoration in customer numbers in 2022 after two largely misplaced years. As in Spain, Portugal and Italy, the sector is a large employer and contributor to state revenues.

However throughout the area, the pandemic has modified the face of tourism. Inns have been already grappling with increased gasoline payments and inflation which an extra power worth surge within the wake of Russia’s invasion of Ukraine will solely make worse.

The dislocation of labour markets attributable to COVID-19 has left entrenched staffing shortages, whereas Italian vacationer officers concede that pandemic-era holidaying – with its emphasis on hygiene, cleanliness and house – is an enormous problem for its ageing infrastructure.

In the meantime, a marketplace for extra modest, small-scale holidays is opening up: In Spain and Portugal, a reluctance amongst many vacationers to journey far is accentuating the development for stays in rural areas in tents, campers or motorhomes.
Business and authorities officers in Greece are forecasting revenues will attain 80-90% of the file seen in 2019, when 33 million vacationers introduced in 18 billion euros in revenues, price a fifth of nationwide output.

But a bumper season is unlikely to supply a lot aid to struggling companies which emerged from a decade-long monetary disaster in 2018 solely to have the pandemic deliver international journey to a halt two years later.

So acute is the issue of hovering heating oil, gasoline and electrical energy costs that the president of the Greek tourism confederation SETE, Yiannis Retsos, wrote to ministers in January urging them to supply monetary help, saying it was “objectively not possible” for year-round motels to the duvet their prices, particularly after the quieter winter months.

The extremely indebted nations of Europe’s south have been additionally bracing for the European Central Financial institution to take away the stimulus that has saved their borrowing prices down.

Though the Ukraine battle has left the rate of interest outlook unsure, the southern fringe nonetheless badly wants its tourism sectors to get again to work given the financial hit the battle is about to ship.

Talking a day after the invasion, which Russia calls a “particular operation”, Greece’s Retsos mentioned it was too early to gauge its affect on the tourism sector.

Greater than every week into the battle, there was no noticeable enhance in cancellations throughout the area.

Russian vacationers solely make up a really small proportion of the sector in southern Europe – 2% of revenues in Greece in 2019 and round 1% of nightly lodge bookings in Portugal. Turkey – outdoors the European Union – is a extra widespread vacation spot.

However with European gasoline costs already at file highs, and this prone to feed into inflation globally, the priority in nations like Greece is the battle will solely worsen an already bleak outlook, additional crimping friends’ spending energy and rising suppliers’ prices.

NO END TO COSTS

Even motels that have been shut throughout winter fear they won’t be able to shoulder the additional burden, having already agreed costs with tour operators final summer time, mentioned Babbis Voulgaris, head of the Corfu hoteliers’ affiliation.

Resort proprietor Diavatis, who additionally owns a year-round boutique lodge and a waterpark complicated on the island, agreed.

“This will probably be an actual disaster for us,” he mentioned. “I will not say it is worse than the pandemic as a result of not less than we’re open. However we did not lose cash then. Now we’re heading in direction of dropping cash.”

The Greek authorities has spent over 42 billion euros in pandemic help measures since 2020 to maintain companies and households afloat and about 2 billion euros since September to subsidise energy payments via March. For hoteliers, the help doesn’t go far sufficient.

“In the summertime, with the air-conditioners working, the fridges, the kitchen, every little thing – I do not how when this may finish,” mentioned Costas Merianos, who owns a small family-run lodge on Corfu’s Ionian coast.

Throughout the ocean in Italy, lockdowns and power costs have pressured many motels to close for good, mentioned Marina Lalli, president of the Federturismo trade affiliation.

And whereas Lalli was hopeful tourism may inch nearer to 2019 ranges this 12 months, Italy faces the extra drawback of being “a mature vacationer vacation spot with mature lodge constructions that must be renewed,” she mentioned.

“Within the post-COVID period, vacationers are much more attentive to high quality, they need a assure of cleanliness and need to really feel secure.”

SOMETHING DIFFERENT

Greece mentioned it was opening its tourism season as early as March 1 this 12 months to satisfy demand however, like in Italy, Spain and Portugal, the season is not going to start in earnest till the Easter break in April, a litmus check earlier than the important summer time months.

Each Greece and Italy are racing to fill job shortages because the pandemic pressured staff overseas for higher paying jobs or into totally different sectors with much less unsure prospects.

In Greece, the tourism minister even appealed to refugees fleeing Ukraine, providing them residence and work permits to fill 50,000 job gaps in hospitality.

Demand for Spanish holidays was wanting very robust this 12 months, in accordance with the vice-president of trade affiliation Exceltur, Jose Luis Zoreda, because of Spain’s excessive vaccination charges and the easing of pandemic restrictions in its massive markets, the UK and Germany.

“There’s a robust, accrued journey urge for food in Europe,” Zoreda mentioned, forecasting an “explosion” of tourism from Easter onwards, but additionally decrease revenue margins attributable to inflation and power costs.

Exceltur, nonetheless, additionally discovered vacationers have been in search of a special expertise. In 2021, campsite leases have been up 19.2%, flat leases have been up by 16%, rural houses by 11%. Lodge utilization fell by 8%, a decline additionally pushed by fewer enterprise journeys.

In January, new motorhomes and camper vans gross sales have been up 34.1% on an annual foundation, in accordance with the Spanish Affiliation of the Caravanning Business and Commerce (ASEICAR).

“The ‘all-in-one’ vacation mannequin has been left behind,” Yescapa, a web based motorhomes and camper vans rental firm, instructed Reuters.

Nico Aro, who rents out a camper van on the island of Tenerife, says he has not been capable of take pleasure in it himself since he purchased it final March as a result of requests preserve coming in from Italy, France and Belgium. His largest drawback is that he can’t discover one other one to purchase as a result of they’re in nice demand.

“I’ve benefited from the pandemic,” he mentioned.

The urge for food for “slower” tourism has additionally grown in Portugal, the place the sector performed a vital function in its restoration from the 2010 debt disaster. Tourism stood at about 15% of GDP in 2019 however fell to eight% in 2020.

“There’s an rising variety of individuals searching for locations with fewer individuals,” mentioned Helder Martins, president of Algarve’s foremost lodge affiliation. “I do not imagine that they may return to only wanting the solar and the seaside.”

The centuries-old “schist villages”, constructed from the stone of a mountainous area clad in pine bushes, are roaring again to life after being deserted over time by younger Portuguese in search of work elsewhere.

“This summer time is filling up quick,” mentioned Sonia Cortes, who owns a small five-room lodge within the Janeiro de Cima schist village, the place development staff are rebuilding conventional homes.

“The start of the pandemic was actually troublesome for many who lived off tourism,” she mentioned. “(However then) these in greater cities regarded for villages like this one the place they may really feel secure.”

There was a 30% enhance within the variety of evening stays at schist villages from 2019 to 2020-21, mentioned Bruno Ramos, who works for an company selling tourism there.

Nonetheless, again in Greece, Merianos, the Corfu lodge proprietor, has a extra sober view of the months forward.

“I will be completely happy if on the finish of the season I do not owe my employees, I do not owe the state, I do not owe the power supplier – even when I am left with 10 euros in my pockets,” he mentioned.

Extra reporting by Corina Rodriguez in MADRID, Catarina Demony in JANEIRO DE CIMA, Portugal, Giselda Vagnoni in ROME and Adonis Skordilis on CORFU, Greece; Writing by Karolina Tagaris; Modifying by Toby Chopra

Our Requirements: The Thomson Reuters Belief Ideas.