Thursday, September 24, 2020
The EU’s deepest recessions in the second quarter of 2020 tended to occur in countries with large tourism sectors
- Falling tourism income will shrink countries’ exports of services.
- Employment in the transport and hospitality sectors will be affected, although government schemes may disguise this.
- Small businesses in transport and hospitality sectors may lack the resilience to survive a prolonged slump in tourist numbers.
- Even if governments try to avoid lockdowns, foreign tourists will still stay away for fear of infection.
The seven worst-hit EU economies in the second quarter -- Spain, France, Italy, Malta, Portugal, Greece and Croatia -- are also those economies where tourism makes a large contribution to GDP.
Of the EU’s Mediterranean member states, only in Cyprus was the contraction below the EU average.
In Croatia, it was a little above. Its slightly lighter contraction than in the other six may be due to the government’s policy of mitigating COVID-19’s impact on the tourism industry by reopening Croatia’s borders from late May to citizens of countries where the pandemic was less severe, in particular Slovenia, Germany and Austria.
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