Spain, Portugal and Italy: Sunshine holiday hotspots expect ‘boom’ for Irish tourists, but fear hotels may not cover the cost

It took Dimitris Diavatis an electric bill to dash hopes that his Greek summer resort could bounce back to pre-pandemic health this year, even as bookings fall about.

the amount he paid was more than double what he paid this time last year when the hotel wasn’t even open yet. After two sluggish summers, the irony is yet to come for him: “We’re not going to make a profit in a good year,” he said. “It will be eaten away by inflation.”

Greece – like other tourism-dependent economies on the Mediterranean edge of the eurozone – is seeing signs of a much-needed recovery in visitor numbers in 2022 after two years. years of loss for the most part.

As in Spain, Portugal and Italy, the sector is an employer and a major contributor to state revenue.

But across the region, the pandemic has changed the face of the tourism industry. Hotels have already struggled with higher fuel bills and inflation, which further increases in energy prices after Russia’s invasion of Ukraine will only make matters worse.

The labor market turmoil caused by Covid-19 has caused staff shortages, while Italian tourism officials admit that the holiday in the age of the pandemic – with a focus on hygiene, cleanliness space and space – is a major challenge for this country’s aging infrastructure.

Meanwhile, a market for more modest, small-scale vacations is opening: In Spain and Portugal, many travelers’ reluctance to travel long distances is highlighting the trend. stay in the countryside in tents, camps or motorbikes.

Government and industry officials in Greece forecast revenue to be 80-90% off the record seen in 2019, when 33 million tourists brought in 18 billion euros in revenue, worth a fifth of it. gross national product.

However, a bumper season is unlikely to offer much relief to struggling businesses that emerged from the decade-long financial crisis in 2018 only when the pandemic brought global tourism to a halt for two years. the following year.

The serious problem is the soaring prices of heating oil, gas and electricity for which the president of the Greek tourism association SETE, Yiannis Retsos, wrote to ministers in January urging them to provide financial support, saying that it is “objectively impossible” for all year round. hotels to cover their costs, especially after the quieter winter months.

The highly indebted nations of southern Europe are also bracing for the European Central Bank to scrap stimulus measures that have brought their borrowing costs down.

Although the Ukraine war has left the outlook for interest rates uncertain, the southern region still desperately needs its tourism industries to get back to work due to the economic impact that the conflict is about to resolve.

Speaking a day after the invasion, which Russia called a “special operation”, Greece’s Retsos said it was too early to assess its impact on the tourism sector.

More than a week into the conflict, there has been no appreciable increase in cancellations across the region.

Russian tourists make up only a very small percentage of Southern Europe – 2 percent of revenue in Greece in 2019 and about 1 percent of nightly hotel bookings in Portugal. Turkey – outside the European Union – is a more popular destination.

But with European gas prices already at record highs and this potentially increasing inflation globally, the concern in countries like Greece is that conflict will only worsen the outlook. already dismal, continues to reduce the spending power of guests and increase the costs of suppliers.


An employee works in the lobby of the Cavalieri hotel on the island of Corfu, Greece, March 2, 2022. REUTERS / Adonis Skordilis

Babbis Voulgaris, head of the Corfu hotels association, said that even hotels that close during winter are worried they won’t be able to carry the extra burden, having negotiated prices with tour operators in last summer.

The resort owner Diavatis, who also owns a year-round boutique hotel and a water park complex on the island, agrees.

“This is going to be a real crisis for us,” he said. “I wouldn’t say it’s worse than the pandemic because at least we’re open. But then we weren’t losing money. Now we’re headed towards losing money.”

The Greek government has spent more than 42 billion euros on pandemic support measures since 2020 to keep businesses and households running, and about 2 billion euros since September to subsidize electricity bills until the end. March. For hoteliers, the support doesn’t go far enough.

“In the summer the air conditioning works, the fridge, the kitchen, everything – I don’t know when,” said Costas Merianos, who owns a small family-run hotel on Corfu’s Ionian coast. this will end”.

Across the Italian seas, closures and energy prices have forced many hotels to close, said Marina Lalli, president of the industry association Federturismo.

And while Lalli hopes the tourism industry can get close to 2019 levels this year, Italy faces the additional problem of being “a mature tourist destination with a mature hotel structure in need of renewal.” , she said.

“In the post-Covid era, tourists pay even more attention to quality, they want to be assured of cleanliness and want to feel safe.”

Greece says it will open the tourist season as early as March 1 this year to meet demand, but like in Italy, Spain and Portugal, this season won’t start in earnest. until the Easter holiday in April, a test that kneels before the crucial summer months. .

Both Greece and Italy are racing to fill job shortages as the pandemic forces workers abroad to take higher-paying jobs or enter different sectors with less uncertain prospects. than.

In Greece, the Tourism Minister even called for refugees to flee Ukraine, providing them with residence and work permits to fill 50,000 job vacancies in the hospitality sector.

According to the vice-president of the industry association Exceltur, Jose Luis Zoreda, demand for Spain’s holidays looks strong this year thanks to Spain’s high vaccination rate and the easing of restrictions on travel. pandemic in the country’s major markets, the UK and Germany.

“There is a cumulative and strong tourism taste in Europe, predicting a tourism ‘boom’ from Easter onward, but also lower margins due to inflation and prices,” said Zoreda. energy.

However, Exceltur also found travelers looking for a different experience. In 2021, campground rents increased by 19.2 points, apartment rents by 16 points, and rural houses by 11 points. Hotel usage fell by 8pc, a drop also due to fewer business trips.

In January, sales of new motor vehicles and cargo trucks increased 34.1 percent year-on-year, according to the Spanish Association of Industry and Trade Caravanning (ASEICAR).

“The all-in-one holiday model has been left behind,” Yescapa, an online motorbike and van rental company, told Reuters.

Nico Aro, who rents out a camping van on the island of Tenerife, said he hasn’t been able to enjoy it on his own since he bought it last March because of continued requests from Italy, France and Belgium. His biggest problem is that he can’t find another one to buy because they are in great demand.

“I have benefited from the pandemic,” he said.

The appetite for “slower” travel has also increased in Portugal, where the sector played a key role in the recovery from the 2010 debt crisis. Tourism stood at around 15 percent of GDP in 2019 but drops to 8 percent in 2020.

“More and more people are looking for places with fewer people,” said Helder Martins, president of the main hotel association of the Algarve. “I don’t believe they’ll go back to just wanting the sun and the beach.”

Centuries-old ‘slate villages’, built from the rock of a mountain area covered with pines, are coming back to life after years of neglect by young Portuguese Nha is looking for work elsewhere.

“This summer is filling up quickly,” said Sonia Cortes, who owns a small five-room hotel in the slate village of Janeiro de Cima, where construction workers are rebuilding traditional houses.

“The beginning of the pandemic was really hard for people who lived off of tourism,” she said. “(But then) people in larger cities were looking for villages like this where they could feel safe.”

Bruno Ramos, who works for a tourism promotion agency there, has seen a 30% increase in overnight stays in the slate villages between 2019 and 2020-21.

Back in Greece, however, Merianos, the owner of the Corfu hotel, has a more sober view of the coming months.

“I would be happy if at the end of the season I owe no to my employees, no debt to the state, no debt to the energy supplier – even if I have €10 left in my wallet ,” he said.

– Additional reporting by Corina Rodriguez in Madrid, Catarina Demony in Janeiro de Cima, Giselda Vagnoni in Rome and Adonis Skordilis in Corfu, Greece Spain, Portugal and Italy: Sunshine holiday hotspots expect ‘boom’ for Irish tourists, but fear hotels may not cover the cost

Fry Electronics Team

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