EU on brink: Bloc warned 90% of revenue at risk if tourism sector collapses due to COVID

The European Union has been facing warnings of a potential economic collapse because of the financial struggles member states have been battling during the coronavirus outbreak. Leading tourist hotspots like Italy and France have seen tourism come to a standstill amidst shut down business and cancelled flights, the result of strict lockdowns aimed at containing the virus. European Commission spokesperson Sonya Gospodinova admitted current forecasts are showing some businesses could see as much as 90 percent of their income disappear in the coming months.

Speaking to Euronews, Ms Gospodinova said: “At world level, the loss of revenue would be between €275bn and €400bn.

“For Europe, what it means is, for example, hotels and restaurants could lose 50 percent of their revenues.

“The most impacted ones would be airlines and cruise operators, who could lose 90 percent of revenue.

“In the middle, we have around 70 percent of losses for tour operators and other travel agencies.”

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Tourism accounts for around 10 percent of the overall GDP in the European Union, with over three million businesses employing 27 million people directly and indirectly across the bloc.

But because of airlines being forced to ground their flights, as well as the public being told to limit their travel to essential journeys, tourism all but ground to a halt in the past two months.

And a quick recovery is unlikely, as many in the travel industry do not expect travellers to be confident about their safety rights after restriction measures are lifted. 

Ryanair CEO Michael O’Leary also cast doubt on suggestion flights could implement the social distancing measures needed to ensure crew and passengers are not in direct contact with each other.

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Mr O’Leary said last week: “We can’t make money on 66 percent load factors.

“Even if you do that, the middle seat doesn’t deliver any social distancing, so it’s kind of an idiotic idea that doesn’t achieve anything anyway.”

But despite warnings the travel industry could take some time to recover from the outbreak, some tourism hotspots have already thrashed out suggestions on how to attract travellers back.

Sicily announced last month the region will cover half the cost of plane tickets and give visitors free access to many of its museums. Current estimates suggest the Italian island has lost up to €1 billion (£884 million) since the start of the pandemic. 

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And the European Union has been considering launching a “COVID-19 passport” to boost travel between member states.

The proposed passport would attest the good health of visitors allowing them to move freely without facing demands of quarantining. 

Gari Cappelli, Croatia’s Tourism Minister, confirmed he had discussed with colleagues the creation of a common document with EU-wide validity.

Mr Cappelli said: “We reached several conclusions, particularly in the organisation of the joint European approach to emerging from the crisis.

“It will include the creation of joint protocols and measures in the spheres of health and security.

“The ministers agreed that the common document under provision name COVID-passport should be created and it will work all over the EU.”

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