Southeast Europe looks to near abroad tourists to save 2020 summer season

Southeast Europe looks to near abroad tourists to save 2020 summer season
The crowded Baska Voda beach in Croatia last summer. Scenes like these are unlikely in summer 2020.
By bne IntelliNews May 11, 2020

The popular Adriatic and Black Sea tourist destinations of Southeast Europe are looking to domestic holidaymakers and those from nearby countries that have managed to get their coronavirus (COIVD-19) outbreaks under control to save the 2020 summer season. 

With travel restrictions imposed across Europe to contain the spread of the highly infectious novel coronavirus, countries such as Albania, Croatia and Montenegro, where tourism accounts for a substantial share of GDP, face severe economic contractions this year. 

Figures now being reported for March, during which lockdowns were imposed across most of the region, as expected show a slump in tourism. Croatia, for example, reported that tourist arrivals slumped by 76.8% year-on-year in March, as the pandemic took its toll on the tourism industry worldwide. 

The number of foreigners arriving in Albania plunged by 66.4% y/y to 95,321 in March, after rising 13.6% a month earlier, data from the statistics institute INSTAT indicated.

Slovenia recorded 75% fewer tourist arrivals and 67% fewer tourist overnight stays y/y in March due to the government action to prevent the spread of the coronavirus (COVID-19), the statistics office said on April 24. Foreign tourists generated just over 47,000 arrivals or 78% lower than a year earlier and almost 146,000 overnight stays which is 71% fewer than in March 2019, the tourist office said.

An important contributor to GDP

The World Bank puts the direct contribution of travel and tourism to GDP as high as 11.67% in Montenegro, 11% in Croatia and 8.49% in Albania, as of 2018. 

Taking into account both direct and indirect effects, tourism accounts for around a quarter of GDP in the three countries, according to the World Travel and Tourism Council. The European Commission projects a 9.1% GDP contraction in Croatia this year, one of the largest in the union. The other EU members expecting a drop of more than 9% are Greece, Italy and Spain, all major tourist destinations. 

The report points out that Croatia’s reliance on tourism “exacerbates the slump and poses a risk in case of longer travel restrictions”. “Service exports should suffer ... due to the negative impact of the suppression and mitigation measures on the travel, hospitality and transport sectors. Due to the expected increased aversion towards international travel by potential non-resident tourists, tourism is not expected to recover to its 2019 level in 2021. However, the negative impact on GDP of the large fall in exports should be mitigated by the high import component of tourism exports,” said the report. 

Croatia is preparing for a fall in tourist overnight stays that could range from a best-case scenario of 60% to a worst-case scenario of 90% this year, Tourism Minister Gari Cappelli said on April 1, outlining three possible scenarios. 

A report from S&P puts Albania and Montenegro among 15 countries that will see huge consequences for their tourism sectors from the pandemic, a list that also includes Aruba, the Bahamas, Barbados, Cape Verde, and Fiji. “The impact is expectedly large for … small tourist-driven economies such as Barbados, Aruba, Belize, Cape Verde, Montenegro, and Albania,” the analysis released in March showed.

Meanwhile, the Slovenian Tourist Board expects the sector to experience a 60-70% contraction this year. Previous economic crises have been brutal on tourism, but the sector has been able to recover fairly quickly. The coronavirus pandemic is different, according to officials from the tourist board.

Smaller providers of tourist accommodation could open the doors in mid-May, and the standards for their operation will be set by a working group. The tourist sector meanwhile, is calling on the country to help them provide liquidity. With the tourism industry projected to remain shut down longer due to coronavirus than most other sectors, the Slovenian government is considering extending temporary emergency aid for tourism companies by a few months or even until the end of the year. After the sharp decline, the recovery is expected to be long, maybe several years, depending on how successfully the virus is contained, when borders reopen, and when tourism providers are allowed to operate again.

“COVID-free corridors” 

However, as many countries across Central and Southeast Europe have managed to subdue the virus — with new daily cases now being reported in the single or low double figures — there are hopes that bringing in tourists from the region could ensure hotels, restaurants and other tourism-oriented businesses do not lose out entirely. 

Several governments are currently negotiating bilateral agreements to allow tourists from specific countries to make tourist trips to destinations such as Croatia and Greece. The Croatian government is considering creating “tourist corridors” to enable Czech holidaymakers to visit this summer, Cappelli told state radio station HRT on April 21. Creating the so-called corridors would make it possible for Czechs — who would first need a certificate to show they are free from the coronavirus — to visit Croatia. Similar measures could be put in place for tourists from other nearby countries such as Austria and Hungary. 

Zagreb is also looking to domestic tourists to help rescue the holiday season, Cappelli said on April 15, according to a government statement. However, domestic tourists are unable to save the tourist season single-handedly: their share in total traffic in the last two years has been around 12%, and foreign tourists tend to be bigger spenders. 

Albanian Tourism Minister Blendi Klosi announced that the government in Tirana is also negotiating with certain countries and airlines so that international tourists may be able to come to Albania via charter flights and stay in hotels while following all the appropriate physical distancing rules. Klosi said that Albania first expects to receive tourists from neighbouring Kosovo, and then other countries.

Meanwhile, the head of Albania's tourist operators in the south of the country, Vasil Bedini, said that tourism service operators have already prepared packages for tourists and are just waiting for the relevant authorities to give them the green light.

Romania might establish “green corridors” to Greece, the most popular destination for Romanian tourists, but with no end to the lockdown in Romania currently in sight, this remains a far-off prospect. Meanwhile, Germany is reportedly negotiating similar agreements to allow its nationals to visit Greece and the Balearics. 

Controlled tourism 

It sounds like the opposite of a relaxed beach holiday, but “controlled tourism” is the subject of discussion as officials try to find ways to allow beaches, hotels and restaurants to open safely. This could, for example, see beachgoers sunbathing in marked off areas separated by plexiglass screens. 

In Montenegro, where the tourism ministry recently announced it is drafting a plan how to make the season possible, Damir Davidovic, state secretary at the ministry, said earlier in May that the government will allow a single family to use 16 sqm of beach. Umbrellas and other beach facilities will be disinfected daily. Davidovic explained this would be a new sort of tourism – controlled tourism.

Klosi revealed similar plans for the re-opening of Albania’s tourism industry at the end of April as the number of new coronavirus infections started to decrease. According to Klosi, the tourism industry will be re-opened after certain conditions are met such as keeping physical distances.

New regulations for visiting the beaches will allow no more than four people within a 10-sqm area. Arrival of large groups of tourists in small spaces will be banned. Local media reported that many Albanians already flocked to beaches during the May 1 holiday after authorities eased restrictions.

The government's plan also envisages that accommodation facilities should provide a certificate with “Controlled Structure” logo, which will require businesses to adhere to protocols for sanitary and hygiene standards necessary to protect the health of the visitors.

Black Sea confusion

Compared to the Adriatic tourist resorts, plans are less advanced in the Black Sea countries of Bulgaria and Romania. 

There is confusion in Bulgaria, where it seems that the tourism ministry still has no idea how to proceed with reopening the sector. Tourism Minister Nikolina Angelkova has been strongly criticised by the sector for the lack of policy and support in the crisis. So far, she has only said that a mobile phone app is being developed that would show where tourists can find free umbrellas. Also, the ministry is considering providing vouchers to local people to allow them to spend their vacation in local resorts.

With a share of just 1.4% in GDP, half of that in Bulgaria and far from the double digit figures seen in Croatia or Montenegro, Romania’s tourism has not been on the government’s agenda during the coronavirus crisis despite the efforts of tour operators and hotel owners. And it was low on the public agenda as well — or at least not as high as employment, wages or bank loan repayment. 

Although the outlook for the tourism industry remains highly volatile, consensus expectations for 50% drop in the tourism business in Romania have consolidated.

On a more positive note (for tourism), President Klaus Iohannis announced that museums will be among the first establishments to be reopened after the planned relaxation of restrictions on May 15.

Also, hotels in Romania will reopen on May 15, when the state of emergency due to COVID-19 ends in the country, Prime Minister Ludovic Orban said in his press conference on May 4. This would have been good news, if the hotels were ever closed — but they were not.

However, at the same press conference Orban stressed that “we can survive without restaurants for another two months”. Speaking about restaurants, coffee shops and bars, he argued that, especially those who operate mainly indoors, pose a high epidemiological risk.

"After May 15, based on the evaluations we have at the moment, restaurants, cafes, and bars will not open, neither in closed spaces nor in open spaces. Depending on the evolution of the epidemic, depending on the evolution of the meteorological conditions, we do not exclude the possibility that those in open spaces will open on June 1 or June 15, under certain conditions," Orban explained, adding that the holiday season in Romania only starts after June 15.

And he mentioned the insignificant role played by horeca in country’s economy — a comment quickly criticised by opposition politicians.

Orban promised companies in the tourism some support: grants (10% of turnover) or “consumer vouchers”. Nonetheless, neither of the measures proposed by Orban meet the companies’ expectations and tour operators as well as hotel owners are still asking for more targeted support.

Specifically, the head of tour operators’ association ANAT Nicolae Demetriade asked the government to return from public money the payments made in advance by tourists for holidays abroad that they will, most likely, not be able to go on. The government invited tour operators to provide data as regards the money paid by tourists and how was it spent. Their failure to answer supported allegations about tour operators running sort of Ponzi games or at least paying for last year’s holidays with the money received in advance this year.

Can we go on holiday? 

After around two months of lockdown in most of the Southeast Europe region, easing of restrictions has been welcomed and people are starting to look ahead to the summer, and ask whether they will be able to go on holiday — not least those who have paid for their holidays in advance. 

In Romania, the main questions on the agenda are: will Romanian Black Sea resorts open and if yes when and under what conditions? Will Bulgaria and Greece open their resorts and, similarly, when and under what circumstances? In fact, it remains unclear whether Romanians will be able to travel freely out of their city of residence after May 15, when the state of emergency ends. Top officials have provided contradictory answers. Under these circumstances, scenarios of green corridors to Greece, COVID-free passports, testing and plexiglass walls everywhere abound, while the holidays are placed in a remote future that can be reached only after an indefinite number of 14-day steps, each of which can generate alternative futures “depending on the recommendations of the epidemiologists”, writes bne IntelliNews’ correspondent in Bucharest.

Meanwhile, bne IntelliNews reports from North Macedonia that many people say they will not go on holiday this summer due to the coronavirus situation as they fear for their health, although some already are visiting their weekend houses in rural and lakeside areas. Tourism workers expect that the tourist season this year will be supported only by local tourists. Most of the tourists in summer visit the Ohrid lakeside resorts, while the capital Skopje is a destination for tourists throughout the year.

51-year old Skopje citizen Biljana, who works during summer as a host in Greek resort city Paralia (mainly visited by Serbia and Macedonian tourists), fears that this year the season will be completely ruined due to strict restrictions that must be observed by accommodation facilities providers and guests.

“I don’t know if Serbians and Macedonians will visit Greek beaches this year in great numbers, due to fears for their health and the restrictions on buses that should be half empty. And how the distance of two metres will be held on beaches that previously were crowded,” she wondered.

With contributions from Valentina Dimitrievska in Skopje, Iulian Ernst in Bucharest, Denitsa Koseva in Sofia and Clare Nuttall in Glasgow