Skift Take

Europe’s winter season looks bleak as the pandemic shuts down service economies in the region’s major destinations until early December — for now. Yet optimism remains that traveler demand will return as soon as restrictions end, even if that means a canceled Christmas.

From the UK to Belgium, France, Italy, Greece and Ireland, a second Covid wave has sent Europe into a range of lockdowns, curfews and restrictions until the first week of December. These could stretch into the holidays, depending on the pandemic’s progress, as the region is once again becoming the epicenter of the epidemic.

But what will this shutdown do to Europe’s already tepid tourism sector and its upcoming winter holiday season?

“In the UK, most hotels have a high degree of food and beverage,” Magnuson Hotels CEO Thomas Magnuson told Skift from the UK. “And [at] Christmastime there are traditionally a lot of events — family events, corporate events, Christmas type events — that’s going to be a hit for a lot of these properties.”

A Summer Uptick

The return of tourism wasn’t as promising this past summer as expected, though a handful of destinations saw a mild increase in visitors. Italy had begun seeing hotel stays increase in June, while Spain saw a slight uptick in hotel reservations in July and August, despite traveler quarantine restrictions from the UK and Germany.

“It was not a large summer by any means,” Magnuson said. “Corporate travel had been largely cut back, there was some domestic tourism. It wasn’t a significant impact, but one that was welcomed by travelers as well as the industry.”

Just two weeks ago, on October 22, the UK and Germany had lifted restrictions for Spain’s Canary Islands, agreeing to a long awaited “travel corridor.” The Canary Islands projected recovering between 40 to 50 percent of last year’s winter tourism activity these upcoming months, and a new campaign had launched promising “the warmest welcome ever.” The islands are now off the table for the UK – though RyanAir reported in its latest earnings call that it had received 28,000 bookings the first day of the Canary Islands-UK reopening and 25,000 the second day, proving pent up demand – while remaining open for German travelers, who face a lighter lockdown than their British counterparts.

Since restarting operations after Europe’s first pandemic wave, TUI also reported serving 1.4 million customers who went on holiday from mid-June through August.

A Steady Decline in the Fall

According to Skift’s latest Recovery Index report, Europe began showing a steady decline in performance and traveler demand in September, just as Covid cases began increasing across the region, extinguishing any slight prior summer recovery.

Hotel bookings in Spain dipped 78 percent in September, compared to last year. In Bruges, a destination that once hosted eight million visitors a year, bookings were at a dismal 10 percent for September and October. New data from trivago also reveals a sharp decline in interest from French travelers since the new lockdown, while the UK accommodation sector is likely to suffer as over 30 percent of British travelers were focused on immediate travel in October. In its third quarter earnings report, Expedia Group noted a “rockier” hotel recovery on the European side as compared to a steadier, improving North American market.

Germany recorded an 8.2 percent growth in September, unlike its neighbors, not thanks to tourism but with its manufacturing sector. That success was short-lived as the economy shrank again in October, alongside other EU destinations such as France and Italy as lockdowns were announced. “[W]ith lockdown measures being tightened, it is becoming increasingly hard to see how the euro zone economy will avoid falling back into decline,” IHS Markit’s chief business economist Chris Williamson said.

Airlines Too Have Hit a Wall – Particularly in Europe

Alexander de Juniac, the director general and CEO of global airline trade group IATA, noted this week that the airline industry’s recovery has “hit a wall,” between virus resurgences and government-imposed quarantines in the absence of “globally aligned testing regimes.” To boot, Europe was the only region to show September traffic decline compared to August. Eurocontrol forecasts that even if a vaccine were widely available by Summer 2021, air traffic would return to 2019 levels only in 2024.

To boot, this fresh round of lockdowns is expected to have a trickle down negative impact on European travel to the Caribbean region, as destinations such as Grenada, for instance, reopened borders to the UK in early October, with resumption of flights from Virgin Atlantic Airways and British Airways.

Hope Amid An Uncertain Winter Ahead

The pandemic’s resurgence will continue to thwart a rebound for European tourism — a critical part of the economy for the 23 EU nations, making up 11 percent of GDP and 27 million jobs. At the heart of this conundrum, however, isn’t just a raging virus, but governments resorting to a stop-and-start scenario of quarantines in the absence of a vaccine, plus an ever-changing set of restrictions that are specific to each destination, which travelers may have a hard time sorting out on their own.

“The problem is that it’s all different,” TUI’s Head of media relations Kuzey Esener told Skift. “In the UK and in Sweden we have complete travel bans. In Germany, we have travel warnings, and we have certain corridors that are open. Same goes for the Netherlands and Belgium, different restrictions and rules in place in the different markets.”

This alarming second Covid wave in Europe may or may not subside in time for a “normal” Christmas holiday season, but what’s clear is that any chance of regional tourism recovery for the upcoming winter is looking bleak — particularly for the hospitality sector and the airline industry.

Still, there’s optimism that as soon as the virus is under control, travelers will return. “In general we are very optimistic, because what you see is when a destination is opened again, that bookings flood in and that people really want to travel,” TUI’s Esener said. “And we do see that also with our bookings for the coming year for next summer 2021. For the holiday season, we have to wait and see what happens, but we’re expecting also that people want to travel again.”


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Tags: coronavirus, coronavirus recovery, europe, tourism, tui

Photo credit: Spain's Canary Islands recently established a travel corridor with the UK and Germany. But Europe's November lockdown has now thrown the winter holiday season into doubt. Andrew Callow / Flickr

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