Various information published in the last few days in Spain, following the announcement by the Spanish government of the plan to end the confinement, suggest that the country's borders may remain closed to tourism until October. This caused surprise and concern in the Spanish tourism sector, whose economic activity represents almost 20% of the country's GDP.
From an economic point of view, this would aggravate the situation which, according to the government, would mean a drop of more than 9% of GDP in 2020 and an increase in unemployment to 19%. Another proof that the covid-19 reached the economy of all countries, as well as the financial and stock markets, increasing the volatility of the shares and the Forex or currency market.
If information about border closures throughout the summer is confirmed, it will also have an impact on the Portuguese economy. Since the beginning of the covid-19 crisis, the Spanish-Portuguese borders have remained closed for the first time since the disappearance of border controls after the beginning of Schengen.
Although António Costa's government is planning to reopen more cross-border points as of June 1, this would only facilitate the flow of goods and workers so far, but not tourists. For this reason, Spain and Portugal, two countries dependent on tourism, will be able to see the flow of travelers between the two countries limited, affecting the number of visitors who would arrive in the Algarve, Lisbon or other tourist spots this summer.
European Union advises caution
Although almost all European countries affected by Covid-19 – Portugal, Spain, France, Italy, Germany, the Netherlands, etc. – have already announced their plans to return to a certain normality, some doubts still remain in the air. For example, the European Commission warned European citizens a few weeks ago not to make plans for this summer. At least, not abroad. This is due to the uncertainty about the possibility of reopening the borders in time and about the health and safety measures that would be necessary when traveling.
As a result, the impact of covid-19 on the Portuguese tourism sector – hotels, restaurants and other dependent industries – will be significant as the volume of transnational travel decreases. In Spain, for example, the Ministry of Tourism is strengthening and promoting domestic destinations as an alternative to travel outside the country. In doing so, they hope to make up for some of the losses caused by the two-month closure, the cancellation of Easter holidays and the expected decrease in revenue between June and September.
In Italy and Portugal, some ideas have already been launched to organize access to the beaches this summer. But it does not seem easy to implement the plans to limit the number of bathers or the spaces between them. It will be necessary to have many police officers or guards to avoid overcrowding, as well as other uncivilized behavior. This will not be feasible on all beaches in all municipalities.
In Spain, there is not even a plan designed for this situation. Access to the beaches is foreseen within the scope of the activities authorized in Phase 3 of the Government Plan, but without further details. This phase will begin on June 8 in areas of the country that on that day meet the requirements demanded by the Ministry of Health to overcome the previous phases. Thus, it is very likely that not all beaches in the country will be accessible on the same date.
Without international tourism, the economy collapses
On the same day that information on the possible closure of the borders until October was known, the Spanish government was preparing a new macroeconomic framework for 2020. It forecasts a drop in national GDP of more than 9 points and an increase in unemployment to 19% . These numbers may worsen due to the evolution of covid-19 and if there is a new outbreak of the virus in the autumn and winter months, before a vaccine is available.
Both a new closure of stores and industrial activities and very negative data from the tourism sector – if the entry of foreign tourists into Spain is finally prevented by October – could cause the unemployment data to exceed 20%.
Indirectly, the prolonged closure of the borders would affect Portugal in two ways: it would prevent the arrival of Spanish visitors, who increasingly choose Portugal as a tourist destination; and it would prevent Portuguese tourists or emigrants from crossing Spain to reach Portugal by road, coming from countries like France or Switzerland.