German tourism: the mixed messages

The focus, pretty much all of it, is on Germany. While Majorca may, once the "new normal" kicks in towards the end of June, derive some benefit from national tourism, the possibility of there being German tourism, and rather earlier than the autumn, would have a more significant influence on the tourism industry dynamic, for which the messages are constantly changing.

Top of the list in this regard are the utterances of Germany's tourism commissioner (secretary of state), Thomas Bareiss. It was he who had said that it was "improbable" that Germans will be travelling to traditional holiday destinations such as Spain, Greece and Turkey this summer. Now, and little more than a week later, Herr Bareiss has suggested that if the virus remains under control, "people could soon be taking their foreign holidays".

In an interview this week with "Der Tagesspiegel", Bareiss said that Germans would find it easier if they were to travel by car, but he was not ruling out the fact that German citizens could be off to places like the Greek islands and the Balearics. He does, therefore, appear to have changed his tune, although "soon" could mean anything.

There is also the mixed message that has been coming from the Balearic government. President Armengol made clear some weeks ago that ports and airports should be the last things to open. While she has been stressing - over and over - the need for maximum health safeguards, there does appear to have been a shift in her narrative regarding reactivation of foreign tourism, and that primarily means German tourism. It was instructive to note what she said in parliament on Tuesday: "We have to be able to restore activity before anyone else, as we depend on tourism more than any other region". She also referred to shipping companies as well as airlines, thus implying a revival of cruise tourism.

But when is still the question. Talk of a decision being made next week regarding a reopening of Son Sant Joan Airport to non-essential flights sounds premature. There may be some indication, but a hard and fast decision? Doubtful. And if even there were, would this entail an opening for the purposes of international flights or just national flights?

Decisions of this sort are ones for Madrid to take, and Madrid has dropped few hints, other than what the transport minister has had to say about so-called "health corridors"; these were specific to Germany. This said, a decision next week where Palma is concerned may well have stemmed from statements made by José Luis Ábalos on Monday. The minister explained that there have been various meetings at a European level and that "we are trying to get an EU regulatory framework that gives us health conditions for all countries".

Ábalos went on to say that the European Commission is due to present "rules" on Wednesday next week. Spain was "interested in common health standards being in place in order to proceed with air travel". While such standards being established isn't necessarily the same as setting out a timetable for air travel, Ábalos indicated that if the EU doesn't act promptly, "Spain will have to consider its own options", noting that any regulations would have to be linked to de-escalation plans and "the country's capacity to integrate the influx of other people".

His words are open to interpretation, but there is a suggestion that the Spanish government, based in particular on the health data per region (and Ábalos stressed these) within the framework of the overall de-escalation plan for the country, is contemplating some air travel, and especially that from Germany.

Into this mix, we have in the Balearics a proposal from the Association of Hotel Chains that there could be a "test" from the middle of June. This would involve two flights from Germany with low capacity in order to check on procedures at the airport, on transfer coaches and in hotels. If this test were to prove satisfactory, hotels could look to open from the start of July for more flights.

Added to this is the undoubted and important role being played by Tui, both in its discussions with the German government and with the Balearic tourism ministry and tourism industry. Tui's CEO, Fritz Joussen, is calling on EU governments to develop, with urgency, "a roadmap for travelling". He has specifically identified the Balearics as one of the first destinations, thus emphasising what the Balearic tourism minister, Iago Negueruela, has said about agreement with Tui for the islands being the first Spanish destination to open up to the tour operator's clients.

Further to this, we have had the observations of Luis Riu, the CEO of Riu Hotels & Resorts, about some reactivation in June and the Balearics and the Canaries being at the forefront. His comments may have particular relevance in that Riu is not just a Tui partner in supplying hotel accommodation, it is also a shareholder in Tui.

Booking looking to 2022

The CEO of Booking Holdings, Glenn Fogel, is suggesting that tourism reactivation may not happen until 2022. The best scenario would be 2021, but it could still take another year.

Booking, a giant of the online travel world, is cutting its costs drastically, and this cost-cutting is mainly what it spends on generating traffic through search engines - Google especially. Expedia is adopting the same strategy. Over the past few weeks it has cut its search engine and television advertising spending by 80%.

Booking isn't alone in believing that a full recovery won't be on the cards until 2022. A report entitled Spanish Market Outlook Covid-19 from the CBRE real-estate firm suggests that there will be recovery in 2021 but that it will be 2022 before hotels in Spain can anticipate having occupancy levels like they were before the crisis.