Gabriel Escarrer hopes that foreign tourists will come back to Spain this year — but he knows how much his company and his industry will suffer if they do not.
As chief executive of Meliá Hotels International, the 326-hotels, €1.4bn-valued group that takes pride in its beach resort roots, Escarrer is all too aware of the wounds left by last year’s drastically shortened summer season.
“If we lose this summer, we would be talking about practically zero activity from October 2019, when [travel agent] Thomas Cook collapsed, to June of 2022,” he said, noting that about half of Spanish tourism revenues normally come between June and September. “It would be devastating for the fabric of the tourist industry.”
According to the country’s main business federation, some 500 Spanish hotels have closed over the past year — and many more would fold with the loss of a second consecutive season.
Such difficulties are particularly significant for Spain, the world’s second most popular tourist destination, whose economy shrank 11 per cent last year.
In a normal year, the industry accounts for 12 per cent of GDP and 13 per cent of employment. In the words of Ramón Aragonés, chief executive of NH Hotel Group, the urban hotel chain: “Tourism is the petrol of Spain.”
As the sector struggles with the impact of the latest travel restrictions in the EU, the UK and the US, both Escarrer and Aragonés acknowledged that people will initially be more likely to travel in their own country before they venture abroad. But their two companies are making very different bets. Meliá believes that foreign tourists will want sun and sea this summer; NH that the main theme will be “tourism of proximity” — trips closer to home.
“We know that 2021 will be a difficult year and that we have complicated months ahead, but there is a perspective of medium-term recovery,” said Aragonés, whose 360-hotel company also has a market value of €1.4bn, a third lower than pre-pandemic levels. “The figures for 2021 will be better than 2020, and 2022 will probably be more like 2019, with a full return in 2023.”
The crucial question is the pace of the recovery, which will be determined by infection rates, vaccinations and politics. And until it arrives, the tourism industry will continue bleeding cash. As of the third quarter last year, Meliá was burning about €34m a month and NH about €25m. Things are even more difficult now, with both groups keeping about half their hotels closed.
“I did not think that the third wave going to hit us so hard,” said Escarrer, adding that “the first quarter [of 2021] will probably be very bad . . . the worst since the second quarter of last year, when there was a very tough lockdown”.
Go to the news source: Can Spanish tourism survive a second Covid summer?