Spain races to save tourism after UK quarantine order

Bloomberg

Spain’s tourism industry is at increasing risk of being shut down as countries across Europe seek to restrict visits to the Mediterranean nation, following an order by the British government to quarantine
visitors.
A steady increase in new infections in Spain last week pushed Boris Johnson’s government to order a 14-day quarantine for all visitors from Spain. Other European countries, including Belgium, France and Norway, have also begun advising against visits to certain areas in Spain, and more restrictions could be coming.
The increase in new cases is “definitely an issue” for Germany too, Berlin’s Health Minister Dilek Kalayci said in an interview on Monday with ZDF television.
Prime Minister Pedro Sanchez’s government downplayed the trends as it sought to protect a sector that accounts for 12% of the country’s economy.
“Spain is a safe country,” Foreign Minister Arancha Gonzalez Laya said. “Spain has outbreaks. As do other countries. What’s important is that Spain is making great efforts to control these outbreaks.”
But the risks are becoming all too real in Catalonia, where the regional government sounded the alarm as it seeks to contain the spread.
“I wouldn’t make an appearance like this nor a call like this is if the situation weren’t critical, if the evolution of the data weren’t highly concerning,” Catalan’s President Joaquim Torra said on Monday at a press conference. Still, Catalonia is safe for tourists, he said.
Airline and other travel industry stocks plunged. The Stoxx 600 Travel & Leisure Index dropped as much as 3.6% earlier, the most in about a month. EasyJet Plc was down 11%, while British Airways parent IAG SA fell 10% and Ryanair Holdings Plc slid 9%.
The UK’s decision to quarantine travelers from Spain creates a tense standoff between two countries that need each other. Both their economies are tanking during critical summer months when people are finally emerging from lockdown and ready to spend.
UK Foreign Secretary Dominic Raab defended the government’s actions in an interview with Sky News on Sunday: “We took the decision as swiftly as we could, and we cannot make apologies for doing so.”
Taking decisive action was important, “otherwise we risk re-infection into the UK, potentially a second wave here and another lockdown,” he said.
The UK is critical to the Spanish economy — many of its pensioners have retired along the country’s Mediterranean coast, and British sun-seekers account for 20% of Spain’s overall visitors. The tension takes place against a backdrop of Brexit, with the UK negotiating its future relationship with the European Union.
The shock British travel ruling was prompted by new virus cases spiking in Spain’s Catalonia region, home to Barcelona and Costa Brava beaches. Hard-hit airlines relying on those flights to stay afloat are angry at measures they see as overly broad.
“We are disappointed that the government has decided to impose a quarantine requirement for those traveling from the whole of Spain since the increased occurrence of coronavirus is regional rather than nationwide,” EasyJet said in a statement, adding the decision “throws thousands of Britons’ travel plans into chaos.”

British Airways said it’s “​yet another blow for British holidaymakers and cannot fail to have an impact on an already troubled aviation industry.” The “uncertainty and confusion is damaging for business and disappointing for those looking forward to a well-deserved break,” Andrew Flintham, managing director at TUI AG’s U.K. and Irish operations, said in a statement.

Ryanair called the new rule “regrettable.” Europe’s biggest discount carrier on Monday posted a 185 million-euro ($217 million) quarterly loss and said a potential second wave is the company’s biggest fear.

“There are going to be localized breakouts in my view across Europe,” Chief Financial Officer Neil Sorahan said in an interview. “You’re going to see areas opening up, areas closing down and that’s where flexibility is going to be hugely important for ourselves and other airlines.”

Ryanair Says Second Virus Wave Is Worst Fear as Losses Mount

Applying rules to an entire country rather than specific regions is unnecessary, said Manchester Airports Group Chief Executive Officer Charlie Cornish.

Spain is now focusing on damage control. Gonzalez Laya said the country is working with the U.K. government to create air corridors for tourists to the Balearic Islands, home to the popular vacation destinations of Ibiza and Mallorca, as well as the Canary islands.