REPORT FROM SPAIN—Reeling from the precipitous drop in international and domestic bookings due to COVID-19, Spanish hoteliers have taken another hit with the British government’s recent decision to quarantine travelers for 14 days upon their return from Spain.
“The United Kingdom is Spain’s leading tourism market, and this will be a devastating blow to the industry,” said Ivar Yuste, partner at Madrid-based industry consultancy PHG Hotels & Resorts.
Last year, more than 18 million Britons took their vacations in Spain, racking up 56.5 million overnight hotel stays, according to Spanish government figures, and spending €18 billion ($21.1 billion).
“Two of Britain’s top tour operators, TUI and Jet2, cancelled flights and package holidays to Spain following the government’s announcement. Around 70% of Spanish hotels are independent and rely heavily on these tour operators for their guests,” Yuste said.
“So the question is: How are they going to survive with no cash flow while this quarantine order lasts? Big hotel groups can survive this, but the independents don’t have the same resources,” he added.
Citing reports of dramatic spikes in COVID-19 cases in some Spanish regions, the British government issued the self-isolation order on 26 July just hours before it was to go into effect, shocking British travelers who had booked their summer Spanish vacations or were already in the country.
At time of publication, the quarantine regulation has not been lifted.
It initially covered only Britons returning from mainland Spain, but a day later, the government said it was extending the order to include the Balearic and Canary Islands, the two top destinations for British visitors.
Equally shocked were Spanish officials and tourism authorities who argued that regarding COVID-19, Spain and especially the islands were much safer than the U.K.
According to Spanish media reports, the rate of COVID-19 cases in the Balearic Islands, which includes the popular destinations of Majorca, Menorca and Ibiza, is eight per 100,000 inhabitants compared to 14 in the U.K.
The total tourism sector accounts for approximately 12% of Spain’s gross domestic product and employs 13% of the country’s workforce.
“Spain is safe; it is safe for Spaniards; it is safe for tourists,” said Spanish Foreign Minister Arancha González.
UK dependence
In a bid to allay British concerns, the Confederation of Spanish Hotels & Tourist Accommodation industry group (CEHAT in its Spanish initials) offered to pay for virus tests for travelers upon their departure for Spain and their return.
María Frontera, the president of the Majorcan Hotel Association, which represents 850 hotels with approximately 200,000 beds, said the British quarantine order “is going to set us back tremendously as it’s triggering an avalanche of cancellations which will continue for the rest of the summer.”
More than 570 hotels in the Balearics were already temporarily closed due to the effect of the virus on tourism.
Asked if the drop in guest numbers could lead to some of these properties going out of business permanently, Frontera said “owners are reconsidering their options because of these sudden and unexpected changes, but it’s too early to say what will happen.”
She said association members were pinning their hopes on efforts by the Spanish government to convince the U.K. government to at least lift the quarantine for travelers from the Balearic and Canary Islands.
“We are hopeful these diplomatic steps will be successful and the British government will reconsider,” she said.
Dominique Carayon, owner and GM of the boutique Hotel San Roque on the Canary island of Tenerife, said many of his fellow hoteliers were complaining of massive cancellations by British guests.
Even before the quarantine order, Canary Island tourism officials were expecting a 66% decline in overall visitors compared to last year.
“Because of the pandemic, we had decided well before the British announcement to open our hotel on 28 August. But we know we’re going to lose a lot of guests in September, and there will be low occupancy into the autumn high season,” he said.
“We have a lot of guests who come every year at that time, and they’re now rescheduling their stays for January, February and beyond when the situation should be clearer,” he added.
Carayon said he is using the break in business to test out antiviral safety measures at his 20-room hotel.
“This is our opportunity to try out new ideas to make the guest experience unforgettable and safe,” he said.
France, Belgium, Germany, the Netherlands and Norway have added to Spanish hoteliers’ concerns by calling for their citizens to avoid travel to several Spanish regions, including Catalonia.
“We’ve seen a lot of cancellations since the French government warned against traveling here, and we’re also getting cancellations from Britons and Germans,” said René Veitl, owner and GM of the Hotel Vistabella in the Catalonian seaside resort town of Roses.
Veitl said occupancy at the 34-room property at this time of year should be 100%, but that it’s only averaging around 60%. “And now we’re expecting even lower numbers in August,” he said.
“I don’t understand the logic behind these warnings, as we follow all the COVID-19 safety rules here. I think perhaps the politicians are using this to get their citizens to not travel abroad and spend their vacation money at home,” he said.
Pain all around
It is not just independent hotels that are struggling, sources said.
In the glitzy resort town of Marbella on Spain’s southern Costa del Sol, the Hotel Don Pepe Gran Meliá is operating at about half the typical occupancy for this time of year, GM Rocío Galán said.
“We are at around half occupancy for our 194 rooms, which usually at this time of year is some 95%, and August isn’t looking any better,” Galán said.
“This summer everything was starting to look up and then this happened. Our British guests say they had to cancel because there were no more flights and they couldn’t self-isolate on their return,” she said.
In a bid to attract guests, the hotel has slashed its current daily rate of €600 ($705.39) for a standard double to €400 ($470.26) and offers no-penalty cancellations.
“We don’t have a crystal ball to see what happens next. September to April is our high season for British guests, but with the situation changing day-by-day, who knows?” Galán said.
PHG Hotels & Resorts’ Yuste warned there is another possible danger for Spanish hoteliers.
“Many northern Europeans denied a Spanish vacation are switching to alternative Mediterranean destinations like Turkey and Tunisia which are cheaper,” he said.
“Hopefully, that will be a short-term effect, and these tourists will eventually return to Spain, which offers a higher-quality product,” Yuste said.