European tourism at a standstill

The tourism sector has been devastated by the national lockdown measures and border closures to prevent the spread of the virus. According to the World Tourism Organization, global tourism has already plunged 22% since the start of the year and could even fall by 60-80% in 2020. Consequently, the current health crisis is likely to have a far greater impact on the sector than previous crises ( Chart 1 ). Europe is indeed the world’s leading destination for international tourists. In 2018, the tourism sector accounted for 9.5% of EU GDP, making it the third-largest contributor to GDP. COVID-19 is also having a heavy impact on tourism in terms of job losses, due to the sector’s high labour intensity. It employed 22.6 million people in 2018, i.e. 11.2% of EU employment. The crisis brought activity to a virtual standstill in branches directly related to tourism (accommodation, travel agencies, air transport) and indirectly related to it (restaurants, retail, other transport, recreational and cultural services, etc.) during the months of March, April and early May in Europe. This represents a major loss of income for companies in the sector and for those European countries that are highly dependent on tourism. In addition, the headwinds buffeting the sector could continue into the summer season. Some segments of the sector are still shut down or have barely resumed their activity in Europe, such as restaurants, recreational and cultural services, transport, etc. Moreover, where activity has resumed, companies must also implement health measures (social distancing, masks, etc.), leading to additional costs. The outlook also remains uncertain on the demand side. A slowdown in household consumption is to be expected and a recovery in international tourism still seems difficult to predict due to the staggered timetable for reopening borders and the absence of coordination at the European level. Despite the desire for a common European response to support the sector, the exceptional economic measures put in place by governments to support the sector and decisions on border reopenings also differ from one country to the next. In this Special Report, we give an overview of the importance of the sector in Europe and of the impact of the COVID-19 lockdown measures on it. A forthcoming edition will focus on estimating the impact of the slowdown in international tourism on the sector in Europe and on the possibility of a boom in domestic tourism during the summer.