If new coronavirus cases continue to rise and Europe experiences a severe second wave of infections, the number of people travelling to tourism destinations could fall by up to 68% in 2020, a new JRC report finds. Less severe scenarios could still see a drop of around 38% to 52%.
Currently, there around 19 million people either directly employed in the tourism sector, or with related jobs on the tourism ‘value chain’ – from restaurant workers to shop owners and their suppliers. Depending on the severity of the drop in travel, between 6.6 and 11.7 million of these jobs could be impacted through reductions in working hours or permanent job losses.
With the coronavirus crisis affecting people’s willingness and ability to travel and their destination preferences, JRC experts analysed survey responses and economic data to identify three potential scenarios and estimate subsequent impact on employment across the EU.
A severe second wave would be the worst-case scenario, with border closures and very low levels of domestic travel putting huge pressure on jobs and businesses. Less severe scenarios, with borders remaining open and people (albeit in lesser numbers) deciding to travel to holiday destinations, would be less detrimental to the economies of those areas reliant on tourism.
Croatia, Cyprus, Malta, Greece, Slovenia, Spain and Austria are the countries with the highest share of jobs at risk, based on:
- the contribution of tourism to their national employment;
- their dependence on international tourists;
- the share of temporary employees in related sectors.
Even if some countries are likely to be more affected than others, within each country there are also regional differences. For instance, some regions in Italy, Portugal, France and Germany are also strongly affected. The JRC report also maps out the regional differences within each country, to help policymakers identify those most in need of support.
The scenarios, based on changes in consumer behaviour, foresee a decrease of tourist arrivals in EU countries of between 38% and 68% in 2020. This fall in demand is likely to not be in line with the current employment level in tourism industries. Most companies have survived so far, thanks to European and national measures - including special lay-off schemes and access to special bank loans or subsidies to support liquidity. Since June 2020, all 27 EU countries have been progressively opening their borders to allow people to travel. However, as the disease is still active worldwide, willingness to travel could be affected.
The effect of COVID-19 outbreak on employment is not expected to have the same dimension as the effect on companies’ turnover or GDP, based on lessons from previous economic crises. Firing people with a permanent contract also has its costs (e.g. with indemnity, which is usually proportional to the number of years in the companies). Furthermore, as personnel are central to the tourism sector, companies will try as much as they can to protect and conserve their human capital. However, people with a lower level of education and with temporary contracts could be the most affected by the crisis.
The experts also lay out short, medium and long-term actions that can be taken to support the tourism industry and people’s livelihoods as they face these pressures. As impacts are likely to be wide-reaching between and across EU regions and countries, the report recommends both local and European-level solutions.
Supporting tourism: possible policy responses
Immediate short-term solutions highlighted in the report focus on managing the health and economic crisis, and how regions have reacted to mitigate its negative effects.
Medium and long-term interventions include reactivating demand and supply, developing new forms of sustainable tourism, making best use of Europe’s territorial and cultural diversity, and helping regions to become more resilient to crises.
As Europe’s regions are diverse and are being impacted by coronavirus in different ways, the experts highlight that part of the solution is likely to be local.
Sustainable ‘smart specialisation’ strategies (S4) for place-based innovation could play a key role in the post coronavirus recovery process. The JRC’s Smart Specialisation Platform provides advice to EU countries and regions in designing and implementing these strategies. These strategies could also be a good basis for designing the national Recovery and Resilience Plans.
Smart Specialisation builds on the assets and resources available to regions and countries and on their specific socio-economic challenges in order to identify unique opportunities for development and growth. In this case, the approach could help the EU, countries and regions to make the right choices for investing in sustainable tourism, in line with the diversity of regional strengths and needs.
Commission takes action to support tourism
In May 2020, the Commission released a package of guidelines, recommendations and actions to help EU countries gradually lift travel restrictions and allow tourism businesses to reopen, while respecting necessary health precautions.
One of the first actions of this package is Re-open EU – an interactive tool with the essential information needed to confidently plan European travel and holidays, while staying healthy and safe. Developed by the JRC, the platform is frequently updated and available in 24 languages. Re-Open EU has had over 4 million visitors since its launch in June.
The Commission’s recovery plan includes support to EU countries for investment and reforms to address the crisis. A new initiative, REACT-EU, will provide support to EU countries, with a budget of €47.5 billion. This will be available from 2020 and distributed according to the impact of the crisis. It will ensure there is no interruption in funding for key crisis repair measures and support to those most in need. The initiative will support workers and SMEs, health systems and the green and digital transitions across sectors – from tourism to culture. The overall recovery plan also includes a Recovery and Resilience Facility of €672.5 billion.
On 1 July 2020, the European Commission adopted the European Skills Agenda for sustainable competitiveness, social fairness and resilience. The Communication announces a new Pact for Skills to mobilise a concerted effort for quality investment in skills for all working age people across the Union. The Pact will initially focus on the industrial ecosystems heavily affected by the current crisis due to the COVID-19 pandemic. Tourism has been identified as one of the four priority sectors.
JRC brief: COVID-19, tourist behaviour, jobs and policy options (PDF)
JRC report: Behavioural changes in tourism in times of COVID-19
- Publication date
- 26 August 2020