CEOE and the professional services firm EY have jointly presented this Thursday the report 'Management of the tourism crisis caused by COVID-19', in a context in which the health emergency derived from COVID-19 is causing an economic impact and social dimension of still incalculable dimensions in this sector, which had been directly generating 12.7% of jobs and 12.3% of the country's GDP. An informative meeting that was attended by the president of CEOE, Antonio Garamendi, the president of the Council of Tourism, Culture and Sports of CEOE, Marta Blanco, and the partner in charge of Public Sector and Financial Accounting Advisory Services of EY, Chus Escobar.
The document includes proposals inspired by the interventions of the leaders of the sector at the CEOE Business Summit in June 2020, other demands from representatives of the tourism sector and the best international practices.
The World Tourism Organization (UNWTO) estimates that this year between 850 and 1.1 billion international tourists will be lost in 2020, while the OECD considers that the most affected destinations will be those with a greater degree of dependence on international tourism. All this puts the focus on Spain.
So far, the number of hotel overnight stays in Spain has fallen by 71.1% between the months of January and July compared to the same period of the previous year, with an impact on all the autonomous communities, but especially on the most touristy ones.
Only international tourist arrivals have fallen by 72.4% in the first seven months of the year and international tourist spending by 72.6%.
The situation is even more worrying if it is taken into account that the imposition of quarantines on the return to the origin or the travel restrictions to our country are generating an image of insecurity that causes cancellations and changes in the preference for other destinations.
This coupled with other risks such as possible massive appeals to the population in all destinations in the world to reactivate local tourism, make it necessary to implement new measures, as other countries have done, to curb the economic impact of the pandemic on the tourism sector. their companies and workers.
Specifically, the governments of different countries are implementing various measures to support the reactivation of tourism and the continuity of business activity in the sector, especially in the tax area, such as, for example, the application of super-low VAT rates; specific lines of financing and extension of guarantee lines; the postponement of the payment of taxes, fees and contributions to Social Security; o temporary exceptions or reductions in essential bills; as well as participation in the capital of strategic companies.
Likewise, in other countries mechanisms have been applied to help maintain employment through the assumption by the administrations of the wage cost of suspended contracts or with reduced working hours; the definition of new promotion and communication strategies or market tools until the reactivation of connectivity.
Urgent plan to promote the recovery of tourism
Along these lines, the report presented proposes a series of measures on which to work to promote the recovery of the tourism sector and guarantee the survival of its companies, as well as the maintenance of the employment it generates.
In the first place, measures are proposed to facilitate the liquidity of companies:
- Maintaining the validity and extension of the scope of application of tax and Social Security debt deferrals.
- Maintaining the validity and extension of the amounts of credit lines and guarantees granted by the ICO. Extension of grace and amortization periods and increase in the percentage of guarantees.
- Grant aid in the form of very long-term loans to viable companies that commit to investing in competitiveness improvements.
- Aid for transport and connectivity.
- Measures to mitigate the damage to companies derived from situations of canceled and postponed trips.
Measures to boost demand in the tourism sector:
- Regain confidence in the destination through a communication campaign that is adapted to each issuing market, highlighting the effort and investment of Spanish companies to guarantee safety in their establishments.
- Sanitary measures to generate confidence in the tourist.
- To restore as soon as possible ordinary mobility and area connectivity with the main emitters of tourists who visit Spain.
- Facilitate the subscription of travel medical insurance for international tourists that include contingencies derived from COVID-19, such as medical, hospital or pharmaceutical expenses or expenses such as cancellation, interruption or extension of trips.
- Reduction to 7% during 2020 and 2021 of the tax rates applicable to services provided by the tourism sector. The reduction in rates would affect accommodation, catering or passenger transport services, but also the provision of services to which the special regime for travel agencies applies, and other services in the tourism value chain.
- Temporary exemption from tourist taxes.
- Fiscal measures by the City Councils.
- Launch of a campaign to promote the destination Spain adapted to the circumstances.
- Increase public-private collaboration in the sector through subsidized vacation programs that boost employment and promote seasonal adjustment.
Measures to contain operating costs of companies in the tourism sector:
- Maintenance of ERTEs due to force majeure associated with COVID-19 until demand recovery.
- Maintain and promote flexibility measures in the negotiation of rentals assumed by companies in the sector.
Plan for the recovery of tourist activity and to increase its capacity to create value
The document includes a proposal to develop a Strategic Plan with the participation of public and private agents, which incorporates the current situation and the difficulties in recovering demand in its diagnosis. This plan would be called to be a fundamental part of the Spanish and European reconstruction program and to dedicate sufficient budgetary resources.
