Recovery of tourism in 2021 depends on speed of vaccination – DBRS/Morningstar

The recovery of tourism in southern European countries in 2021, including Portugal, will depend on the speed of vaccination against Covid-19, according to a note released on Monday by the DBRS/Morninsgtar rating agency.

According to Monday’s commentary on the impact of containment measures against the pandemic in these countries (Greece, Cyprus, Malta, Portugal, Spain and Italy), the evolution of the recovery will still depend on factors related to the seasonality of tourism such as the behaviour of domestic tourism, the reason and mode of travel.

For DBRS/Morningstar economists, although the start of the season has allowed a rapid recovery in international tourism flow, the resurgence of contagion across Europe has interrupted the recovery, with tourist arrivals falling 79% in Spain, 77% in Greece and Malta, 76% in Portugal and 84% in Cyprus between July and September 2020 compared to the same period in 2019.

However, it said, the data for Italy showed a more resilient performance for the sector, with international arrivals falling more moderately compared to the other southern European countries, by 49%, from July to September.

“This may reflect Italy’s good land connections and proximity to some European tourist markets, such as Germany, Switzerland, Austria and France, combined with the epidemiological situation during the summer,” it said.

The sharp drop in international tourism flows is also reflected in travel services exports, after a dramatic decline in the second quarter of 2020, travel exports showed signs of recovery in July and August before relapsing in September.

Exports of travel services fell in the July-September period by 81% in Spain, 74% in Greece, 57% in Portugal and 37% in Italy.