Tourism industry bracing for economic impact of coronavirus

Besides creating a public health crisis, the Covid-19 coronavirus is also having an impact on national economies. The Spanish stock market has retreated over 9% in six trading days as new cases of the disease have been confirmed. And the tourism industry is closely watching events unfold in Italy, where major cultural, trade and sports fixtures have been cancelled in a bid to halt the spread of the virus.

Although no impact figures have been provided, sources in the Spanish tourism sector say that they are worried about the drop in bookings in Italy, where tourism represents 12% of gross domestic product (GDP). In Spain, tourism contributed 15% of GDP in 2018, making it the leading driver of the economy.

The US Embassy in Spain on Thursday issued a Health Alert noting that authorities are testing people for the coronavirus in the Canary Islands, Madrid, Catalonia and the Valencia region, all of which have reported cases. So far there have been 14 confirmed cases in Spain, 12 of which were detected this week after hospitals changed their protocols and began checking pneumonia patients for the disease. On Wednesday, Seville authorities confirmed the first locally transmitted case in Spain.

With a month and a half to go before the Easter break, which traditionally represents a peak in visitors and expenditure, there has so far been little change to tourist flows to the Canary Islands despite four confirmed cases of the coronavirus and a hotel in lockdown in Adeje, on Tenerife island. Local authorities admitted that there have been some last-minute cancellations, but not a significant amount.

“It’s too early,” said Carlos Garrido, vice-president of the Spanish Confederation of Travel Agencies, adding that expectations are still good for Easter travel to popular destinations such as the Balearic Island of Ibiza, and the Canary Islands.

The mayor of Adeje, José Miguel Rodríguez, expressed concern for a town “that makes a living from tourism.” Ashotel, the hotel industry association in Santa Cruz de Tenerife, issued a note underscoring that Spain “has first-class healthcare.”

Production slowdown in Málaga

Dani Cordero / A. Ponce

The Japanese IT equipment and services company Fujitsu has filed for a temporary workforce reduction (ERTE) at its factory in Málaga, in southern Spain. The move anticipates a halt in production due to a lack of equipment from China. The measure would affect a maximum of 336 workers and go into effect between March 2 and May 17.

English version by Susana Urra.