Empty tables sit in the outdoor terrace area of a restaurant by the beach in Salou, Spain, on Monday, July 27, 2020. 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. Picture: ANGEL GARCIA/BLOOMBERG
Empty tables sit in the outdoor terrace area of a restaurant by the beach in Salou, Spain, on Monday, July 27, 2020. 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. Picture: ANGEL GARCIA/BLOOMBERG

Madrid — Spain’s tourism industry is at increasing risk of being shut down as countries across Europe seek to restrict visits to the Mediterranean nation, after an order by the British government to quarantine visitors.

A steady increase in new infections in Spain last week pushed Prime Minister Boris Johnson’s government on Saturday to order a 14-day quarantine for all travellers 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. Over the weekend, authorities put restrictions on nightlife, shutting clubs and requiring bars to close at midnight.

“I wouldn’t make an appearance like this nor a call like this if the situation weren’t critical, if the evolution of the data weren’t highly concerning,” Catalan President Joaquim Torra said at a media 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 was down 14%, while British Airways parent IAG fell 10% and Ryanair slid 9%.

The UK order caught Spain’s hotel and restaurant sector by surprise, according to Jose Luis Yzuel, head of the Spanish hostelry association.

“It’s a major blow,” he said in an interview. “The outlook was already bad,” and the order means there will probably be tens of thousands fewer British tourists, he said.

The UK’s decision creates a tense stand-off 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.

No apologies

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 action was important, “otherwise we risk reinfection 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 EU.

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 travelling from the whole of Spain since the increased occurrence of coronavirus is regional rather than nationwide,” easyJet said. The decision “throws thousands of Britons’ travel plans into chaos”.

British Airways said it is “​yet another blow for British holidaymakers and cannot fail to have an impact on an already-troubled aviation industry.”

“Uncertainty and confusion is damaging for business and disappointing for those looking forward to a well-deserved break,” Andrew Flintham, MD at TUI’s UK and Irish operations, said.

Ryanair called the new rule “regrettable”. Europe’s biggest discount carrier on Monday posted a €185m quarterly loss and said a potential second wave is the company’s biggest fear.

“There are going to be localised breakouts in my view across Europe,” CFO Neil Sorahan said. “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.”

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

More than 40% of the 3.65-million seats that airlines have scheduled from the UK to Spain in August and September are flying to the Spanish islands, according to Carlos Cendra of Spanish travel analytics firm Mabrian Technologies.

The surprise quarantine announcement by the British government worsens the uncertainty holiday-seekers face and many in the UK and elsewhere could decide to stay at home rather than run the risk of future cancellations, Cendra said.

“The virus is everywhere, and the virus will move when it gets the opportunity to move,” Mike Ryan, head of the World Health Organisation’s emergencies programme, said on Monday. “It’s difficult to get travel measures absolutely right.”

Bloomberg

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