Business
Spain dives into deep recession, tourism woes bode ill for rebound
MADRID (Reuters) – The coronavirus crisis has pulverised Spain’s economy, triggering its worst recession since the civil war, with collapsed tourism numbers boding ill for hopes of a swift rebound.
Hit by one of Europe’s worst outbreaks and strictest lockdowns, the economy came to a virtual halt in March and remained paralysed until the end of June.
It shrank 18.5% in the second quarter, a drop so harsh it wiped out all the recovery achieved since the 2008 global financial crisis, figures from the National Statistics Institute showed on Friday.
“It’s a war economy,” said one Mallorca hotelier, Lluis Rullan, who has only reopened one of his two establishments and was limiting costs and staff to a minimum due to scant visitors.
The government had counted on tourists from northern Europe and further afield driving a third quarter recovery, but quarantines and travel advisories have dashed hopes as Spain battles with new localised outbreaks of the COVID-19 disease.
Rullan, who operates in Soller in northwest Mallorca, had planned for 60% occupancy for August but now expects barely 20% for what should be the high summer season.
After Britain required travellers to Spain to quarantine on return, Germany dealt another blow on Friday, putting three Spanish regions – including Catalonia, home to Barcelona – on its list of high-risk areas.
“Not only has the Spanish economy been one of the worst hit in the euro zone by the pandemic, it also looks set to make a much weaker recovery than its neighbours,” said analysts at Capital Economics.
Spain normally received about 80 million visitors annually and has depended on tourism for about 12% of economic output.
‘Everything is empty’
The government has forecast contraction of 9.2% in 2020 as a whole, surpassing the fall during Spain’s 2008-2013 financial crisis, but expects 6.8% growth in 2021.
“I fear something worse because in the previous crisis we had health and now we don’t,” said pensioner Amelia Martin, walking in Madrid with a mask on.
Spain insists it is not experiencing a second wave of the coronavirus and recent increases are still far from the peak.
But Alex Lazarowicz, a British artisan brewer in Barcelona, whose business has suffered from the local resurgence in cases, said things were not improving: “Everything is empty. People no longer go inside the bar.”
With the economy hibernating and most shops closed until reopening began in May, private spending and investment plummeted in the second quarter, inflicting a much greater blow on Spain’s economy than European counterparts including Germany, France and Italy, the data showed.
The second-quarter contraction came after a 5.2% drop in the first three months, at that stage the worst quarter in modern records. Historians say only the 1936-39 civil war hit harder.
The third quarter will now be weaker than expected, said Raymond Torres, chief economist of thinktank Funcas, forecasting that Spain might manage to rake in from tourist income for the whole year what it usually gets in the third quarter alone.
Some sectors, though, recorded positive data in the second quarter, such as agriculture, driven by strong demand for food. A stimulus package and health measures also helped boost public spending.
“Let’s be positive, fight and think that if everybody pushes, we will get Spain out of this,” said retail shops owner Inigo Crespo, who had to close one shop after the lockdown started and is unsure if can keep his other businesses running.
Reporting and photo: Reuters
Maldives on Thursday welcomed the one millionth tourist to visit this year.
The one millionth tourist is a Thai named Sutapa Amonwivat, who arrived from Singapore with her husband and two children. This is her second visit to Maldives.
Maldives Marketing and Public Relations Corporation (MMPRC) and the Ministry of Tourism gave a warm welcome to Sutapa at the Velana International Airport (VIA) Thursday afternoon. She was welcomed at the VIA by tourism minister Ibrahim Faisal, MMPRC Managing Director Ibrahim Shiury and senior officials of various relevant agencies.
After welcoming her with traditional offerings, she was presented with various gifts by the ministry, MMPRC, customs, immigration, Maldives Association of Travel Agents and Tour Operators (MATATO) and Trans Maldivian Airways (TMA).
Maldives reached one million tourists in June, three weeks earlier than last year. The number of tourists reached one million on July 16, 2023.
Maldives expects to reach 2 million tourists this year.
Chongqing Airlines on Monday began its inaugural flights to Maldives.
The Chongqing-Male route, scheduled three times a week, is expected to strengthen the bonds between China and the Maldives, opening up exciting new opportunities for tourism and cultural exchange.
The inaugural flight was welcomed upon its arrival at Velana International Airport (VIA) in Maldives, where local officials and tourism representatives expressed their enthusiasm for this new development.
“We warmly welcome our friends from China to our beautiful islands. This new connection strengthens our bonds and opens up new opportunities for tourism,” the tourism ministry said on X.
Maldives currently welcomes four airlines from China, including China Eastern, Beijing Capital Airlines, Xiamen Airlines.
In January, Maldives government urged tourism stakeholders in both Maldives and China to ramp up efforts to restore China’s position as the primary source market for Maldives tourism, a status held before the onset of Covid-19.
China, being the largest source market for Maldives tourism before the pandemic, saw a resumption of tourist arrivals from January 2023 after a three-year hiatus due to the pandemic. In 2023, the Maldives welcomed 187,118 Chinese tourists, marking a significant recovery in numbers. This year, the Maldives has welcomed the most number of tourists from China, with over 107,940 or 11.5 percent of total arrivals by June 12.
CROSSROADS Maldives has introduced WeChat Pay, widely known as Weixin Pay in China, across its world-class resorts, SAii Lagoon Maldives, Curio Collection by Hilton, and Hard Rock Hotel Maldives. This payment option is made available to enhance the convenience and overall experience for guests from China, making their stay in the Maldives more enjoyable and hassle-free.
Understanding the needs of the diverse guests, CROSSROADS Maldives has integrated WeChat Pay into operations, allowing guests from China to easily and securely conduct transactions using a payment method familiar to them. The introduction of WeChat Pay is a testament to CROSSROADS Maldives’ dedication to enhancing guest satisfaction by offering exceptional experiences at every turn. What is also expected through this initiative is that the guests could benefit from better foreign exchange rates, translating to better savings on their expenditures during their stay.
The option is available for guests in-house conveniently at both resorts as well as across the Marina at CROSSROADS Maldives where a wider variety of unparalleled dining and retail experiences are available for all guests. The day visitors from China will also therefore equally benefit from this new introduction at the Maldives’ premier multi-island integrated leisure destination.
SAii Lagoon Maldives, Curio Collection by Hilton, is a vibrant tropical escape that offers unique and locally inspired experiences. The resort features spacious rooms and villas, a variety of dining options, and an array of recreational activities designed to cater to the desires of modern travellers. Guests can escape to the island’s SAiisational natural beauty, enjoy water sports, and indulge in spa treatments, all while relishing the personalised service that defines Hilton’s Curio Collection.
Hard Rock Hotel Maldives brings the iconic Hard Rock spirit to the tranquil shores of the Maldives. This family-friendly resort offers a perfect blend of relaxation and entertainment, featuring music-inspired experiences, live performances, and the brand’s signature amenities. With luxurious accommodations, diverse dining options, and a plethora of activities for all ages, Hard Rock Hotel Maldives ensures an unforgettable holiday experience for every guest.
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