The Tourism and Travel sector – strategic for the European economy – is responsible for 9.5% of GDP and 11.2% – 22.6 million people – of employment in the European Union in 2019. Together with the Health sector, it is the industry most affected by the Covid-19 outbreak.
After forecasts of sustained growth in 2020 – it grew by 2.4% in 2019, above that of 1.3% growth in European GDP – today, the sector’s players face unprecedented loss estimates. Countries such as Spain, Portugal, Italy, or Greece face the collapse of one of their main economic driver and, to cope with that, request specific incentives to support the sector.
First of all, a coordinated approach between the Member States is called for: standard epidemiological criteria, in particular to identify zones of high risk; the same procedures at passenger terminal hubs, locator form at EU level; testing protocols, in particular tests at the origin avoiding quarantines; health passport for the period after-vaccine; clear and timely information about travel restrictions, which implemented should not be retroactive.
Without this coordinated action, it will not be possible to restore people’s confidence and informed choices by the sector by avoiding unilateral positions such as those we have seen since the outbreak of COVID19. The European Commission’s guidelines were important and timely, but in many cases ignored by the Member States – those should have been, in my opinion, mandatory.
Simultaneously, there is an urgent need to financially support agents in the Tourism and Travel sector, namely micro, small and medium-sized companies, whose structure does not allow them to access the credit market under acceptable and affordable conditions. Today, the industry faces severe liquidity problems that, if they are not bailed out, they will quickly default and are, as we acknowledge, in the imminence of closing doors.
In this regard, the NextGenEU recovery fund can be decisive and innovative because it represents the issuance of debt on behalf of the European Commission, in a historical amount, but that does not offer guarantees of support to the Tourism and Travel sector.
For this reason, the European Parliament defends, since at least 2015, the creation of a specific line of financing for the sector, which tourism stakeholders can use to solve particular problems and to support the twin transitions towards a greener and digital business environment – especially the smallest ones.
It is not understandable that facing an unprecedented crisis, both the European Commission and the European Council have ignored the importance of direct financing. However, both institutions recognized that the industry would have financing needs in the order of 161 billion euros, about 40% of the NextGenEU budget for grants.
Despite being one of the sectors at the forefront in sustainable projects and the digitization process, this direct financing line is vital for transition allied with the Green Deal and the targets on the need to implement innovation and digitalisation in all the value chain. If the Tourism and Travel industry is only concerned with its survival, the players will not have any capacity for investment or business conversion. The European Union has to realize in concrete actions the importance attributed to the sector for the economy of the EU27.
The Tourism and Travel industry was fundamental shaping nowadays resilient economies in the past and will be decisive, shaping up the future for a smarter, sustainable, and responsible development of the European regions.
