The EC Recommends Re-Opening Frontiers To Reactivate Tourism; Does Not Favour Imposing Quarantines

european tourism

Following WHO recommendations and in line with other European governments, such as the United Kingdom, Spain has announced this week two measures to regulate the entry and exit of people from abroad. One of these is to impose a 14-day quarantine on international travellers. However, although the initiatives are necessary from a health point of view, they spark new doubts over the tourism sector, which is strategic for Spain’s economic recovery. Only the new plan for tourism coordinated with the European Commission, which recommends reopening borders and reviving the sector, could prevent the Spanish government’s decision to impose a quarantine on foreign tourists.

The tourism sector accounts for 10% of European GDP and nearly 15% of Spanish GDP.

Regarding the quarantine period in Spain, it would last 14 days for all persons coming from abroad from 00:00h on May 15th, and during the whole term of the State of Alarm and any possible extensions.

The second measure regarding the entry of foreign travellers is the temporary reestablishment of internal EU air and sea controls (those on land were already being applied) from 00:00h on 15 May until 00:00h on 24 May 2020. In this case, only Spanish citizens and residents in Spain would be allowed to enter national territory. But others such as authorized workers, health workers, etc. are included.

Although the real impact of the quarantine would depend on how long the state of alarm lasts, Banc Sabadell experts believe the key issue is as follows:

That the measures do not remain in force once flights can be re-established from end-June and do not affect the most important months of Spain’s high season. This would de facto make the interest of tourists in Spain inviable.

In fact, following the announcement of similar measures by other countries (the UK), the airlines have already stated they will not re-establish activity. For example, IAG planned to return to 50% activity in Q3’20 vs 10% in Q2’20, already increasing capacity from end-June).

The measures would also have relevant implications for hotels, as tourists represent about 70% of overnight stays in Spain.

In this regard, the European Commission’s guide on requirements and standards for passenger transport (tourist corridors, health measures, airplane capacity, etc.) has opened the door to a possible common response (Italy has proposed to create this tourist corridor between Germany, France, Italy and Spain), thus cancelling the imposition of quarantines.

Brussels is not in favour of any of the measures announced by Spain and is committed to its tourism strategy of a return to normality in three phases. So the European Commission has presented a report with its recommendations to gradually reopen the European Union’s internal borders. It proposes a three phase de-escalation process and safe corridors between countries with similar situations in terms of containing the pandemic.

The implementation of the phases will take into account contagion and monitoring criteria. They will start in areas where the levels of contagion are lower and comparable and where the epidemiological situation can be controlled in real time. Also included are criteria for the capacity of health services, which are the exclusive responsability of each State.

The aim is for this process to be carried out “in a coordinated, concerted and non-discriminatory manner” and in accordance with “proportionality” criteria.

The European Commission will also allow airlines to fill flights, without leaving any seats vacant.

The recommendations from Brussels come after several countries have announced their own measures. France and the UK have reached a bilateral agreement not to require quarantine for those who transit between the two countries.

In the opinion of the Bankinter analysis team:

“These recommendations could lead the European Union governments to coordinate cross-border movements for the summer season. This would avoid measures like the one taken by the Spanish government to impose 14 days of quarantine on people who come into the country from abroad.”

However, the experts remain cautious about the tourism sector.

“If the borders are re-opened, the summer season will be well underway. And we do not foresee a normalisation of tourism until there is a vaccine against COVID-19, which could be delayed until 2021.”

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The Corner
The Corner has a team of on-the-ground reporters in capital cities ranging from New York to Beijing. Their stories are edited by the teams at the Spanish magazine Consejeros (for members of companies’ boards of directors) and at the stock market news site Consenso Del Mercado (market consensus). They have worked in economics and communication for over 25 years.