This summer 2021 is key for hoteliers. If it doesn’t work, it means that most of us will have had two exercises in a row with terrible results. And if it works, it will largely save 2021 and open the path towards the recovery of the sector (and that of the rest of the economy dependent on tourism).
The existing consensus is not extremely positive. We could say that most investors (including banking) think that it is unlikely that it will work normally, and that it is better to wait until October to see what has happened.
However, there are enough arguments to defend – today, May 3rd – that this summer will be good. Most of these arguments are magnificently set out in the Arcano Economic Research reports, and I am going to use them partially in these notes (and if something is poorly explained it will be my fault).
Arguments:
- Vaccines work.
- According to Israel’s experience, when the population reaches 65% immunity (including people who have had the disease and those who have been vaccinated), group immunity is achieved.
- In Europe this second quarter we will distribute 360 million vaccines.
- At the beginning of July, we will achieve group immunity in Spain.
- The population group over 80 years old accounted for 2/3 of deaths and 1/3 of ICU hospitalizations. Once this segment is vaccinated, deaths and therefore social alarm are greatly reduced.
- When group immunity is achieved and the social alarm is reduced, people consume. Especially services, what has not been able to be consumed normally for more than a year.
- This consumption is based not on a wish or a hope, but on the basis of what happens in countries where they are more advanced than us: Israel, the United Kingdom, and the United States (where, for example, there were two million daily plane passengers before the covid, there were half a million in August 2020 and there are already one and a half million daily).
- Another argument that justifies consumption is the 70,000,000,000 euros of excess savings in Spain over the historical average. In the UK, 170,000,000,000 pounds.
In conclusion, there are enough elements to trust that the Spanish market will perform strongly this summer and that, probably starting in July, we will see the massive return of foreign tourists (especially British ones).
What about the Indian variant?
India’s serious problem does not appear to be that of a more lethal variant, but rather an overflow of health services. Precisely, the problem that in Europe we have avoided with better health infrastructures, more social equality and, above all, with the social sacrifice of confinements and restrictions that have greatly harmed our sector.
Despite what may seem at times due to mistakes or missteps, I believe that the developed world has managed this terrible crisis well. And the scientific community and the pharmaceutical industry have been able to provide us with vaccines in record time. Now we have to manage the exit well. Let’s do it right, wisely but without fear.
Agustí Codina – General Manager at MedPlaya Management Services
