The Tourism Cluster of Galicia has prepared a first report on the impact of the COVID 19 crisis on the Galician tourism sector, in which they propose losses of at least 2.476 million euros, which would translate into a 33.2% drop in tourism GDP and 3.9% in the total calculation of Galicia’s GDP in the most optimistic scenario. In terms of demand, the arrival of travelers would be reduced by about 50%, with falls of over 2.5 million passengers while in employment, the report suggests the loss of between 22% and 26% of employment, which would result in the destruction of between 27,230 and 32,181 jobs in Galicia. These forecasts could be even more negative, as there could be higher peaks of job losses, between 40% and 50%, depending on the evolution of the crisis and the times that the health authorities establish for the recovery of the tourist activity.
The report has been prepared by the Cluster Tourism of Galicia from documents and forecasts of entities such as the World Tourism Organization (UNWTO), the International Monetary Fund (IMF), the Galician Economic Forum, the Bureau of Tourism, Exceltur, Bain & Company and EY, Deloitte or McKinsey & Company.
Based on the data and estimates of these entities, the Galician Tourism Cluster proposes up to four possible scenarios for the evolution of this crisis for the Galician tourism sector in terms of tourism demand. In this sense, it is worth noting that Galicia received 5.1 million travellers last year:
This is the most positive scenario, as it envisages a lifting of the ban on travel between the end of April and the beginning of May, which would lead to a rapid recovery in national demand (on the theory that there would be no restriction on the movement of people within the national territory). In this unlikely scenario, Galicia would close the year with 2.6 million travellers and would achieve a rapid recovery in 2021 by Xacobeo’s Effector to 4.1 million travellers.
The appearance of a COVID outbreak in the autumn is contemplated, which slows down the recovery, although the reaction is quicker as we are better prepared at the health, economic and social levels. The effect of Xacobeo will save the second half of 2021. As a result, the fall in travellers to Galicia is more pronounced in 2020, falling to 2.3 million and the recovery in 2021 is softer, reaching 3.5 million.
Confinement is lifted in mid-May. In this scenario the recovery curve is smoother, with a slower recovery of demand from the international market. The fall is more serious in 2020 and leaves the number of travellers at around 2 million, while recovery is faster in 2021 and Galicia reaches 3.6 million.
This is the most pessimistic scenario. The appearance of a resurgence in autumn and the slow recovery of the situation makes it difficult to stimulate demand. The effect of Xacobeo manages to pull the national recovery in the second half of 2021. The fall in passengers places us below 1.8 million and the recovery in 2021 is more moderate, remaining at 2.9 million passengers at the end of the Holy Year, less than 50% of the initial pre-crisis target, which was to reach six million passengers.
The report notes, therefore, that in the most positive scenario, Galicia would lose in 2020 1 in every 2 tourists while, in the most negative scenario, would lose two of every three passengers this year.
Continued analysis and evolution of the crisis
The report elaborated by the CTG raises, therefore, up to four scenarios of evolution of the demand of travellers that Galicia can receive in the horizon of 2020-2021 but from the Cluster they are conscious that these forecasts are subject to continuous changes and corrections, as it has done Exceltur in his proposal of evolution for the set of the Spanish tourist sector.
In this sense, and as explained by the president of the CTG, Cesáreo Pardal, “the report is based on an analysis of the current situation of supply and demand in Galicia, marked by the compulsory closure of establishments, the crisis of confidence and the limitation of the free movement of travellers which results in a retraction of demand, economic crisis and regulatory changes whose consequences we will see little by little”, he explains.
“In this difficult context the report draws up to four scenarios, from more to less positive, with the aim of putting black on white what economic and employment impact we are talking about on tourism in Galicia”.
We want the various administrations to be aware of the weight of our sector and the importance of measuring very well the calendar of de-escalation for an economic sector vital to Galicia as is tourism, to mitigate as far as possible the impact of this crisis.