Spanish hotels are turned into medical bunkhouses

Madrid

BEFORE the Covid-19 pandemic besieged Europe, Kike Sarasola worried about whether he was building enough hotels to capitalise on the region's long-running tourism boom. Such concerns have disappeared, along with the tourists.

The only guests at three of his six boutique hotels in Madrid are doctors and nurses fighting the deadly disease. The transformation of Mr Sarasola's Room Mate Laura hotel and dozens of others into lodging for hospital staff reflects how the crisis has overwhelmed the healthcare sector and also brought the tourism industry to a halt.

The sudden standstill is particularly notable in Spain and Italy, the epicentres of the outbreak in Europe. Millions of visitors travel to both countries each year, fuelling economic growth. Now, lockdowns mean nearly all hotels are closed. As the virus continues to spread, there's little prospect for an easing of restrictions on all but essential travel anytime soon.

He and other hoteliers in Spain and Italy have donated empty rooms to healthcare workers. Mr Sarasola supports the strict lockdown to stop the virus, and is counting on a rapid rebound after restrictions lift, when he thinks cooped up consumers will seek out sunny beaches to recover.

Others aren't so sure. Even if there's a boost to domestic tourism as people remain reluctant to travel abroad, that won't cover the losses in foreign visitors.

It's a similar story in Portugal, where tourism accounts for one in every five jobs and 19 per cent of economic output.

Without airlines supplying customers, hotels have little opportunity to fill beds, and some operators are considering closing for the rest of the year, according to Carlos Cendra of Spanish travel analytics firm Mabrian Technologies.

The outlook has been further clouded by events in the UK, a key source of travellers to southern Europe. Its containment came later than in other European countries, which could mean the peak of the pandemic there is still weeks away, keeping Brits at home for longer.

Beyond the immediate concerns about the coming travel season, the virus could spell structural changes for the industry. Travellers may be less willing to take part in mass gatherings such as conventions, fairs, and even soccer games.

Tourism executives and analysts say that many people - particularly older travellers - are likely to remain cautious about venturing abroad. Also, cash-strapped airlines may re-introduce services only gradually to slowly repair their damaged balance sheets. BLOOMBERG