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TOURISM

Italy’s tourism industry braces for ‘worst revenue slump in over 20 years’

The Italian tourism sector is expecting a steep fall in visits this summer, and is concerned that the drop in revenue could become the worst ever recorded.

Published: 18 June 2020 11:57 CEST
Italy's tourism industry braces for 'worst revenue slump in over 20 years'
Visitors return to Rome's Colosseum. Photo: Filippo Monteforte/AFP

The country, which welcomed over 60 million foreign tourists in 2018, according to the World Tourism Organization, is now expecting 56 million fewer overnight stays, according to a new survey from Florence's Centre for Tourism Studies (CTS).

That translates into a 3.2 billion euro ($3.6 billion) drop in turnover for the industry, representing the worst results since 1998, the survey found.
 
Nearly half of the drop in revenue will come from the hotel sector, found the study, which surveyed more than 2,100 entrepreneurs in the sector.
 
“A decrease was expected, but if it continues like this it will be the worst drop in the history of our tourism industry,” said Vittorio Messina, president of Assoturismo, Italy's tourism federation, which commissioned the survey.
 
“We have to make a plan for the revival of the sector which represents 13 percent of gross domestic product (GDP) and our calling card abroad,” Messina said.
 
The Italian tourism sector was already reporting its “worst crisis in recent history” in early March as the initial outbreak prompted a flurry of travel cancellations.
 
After an almost three-month lockdown, Italy allowed European tourists to return on June 3rd, but tourism from outside the Schengen zone is still prohibited. No date has yet been announced for it to restart, though it is expected to be after June 30th.
 
And even though Italy is starting to re-allow travel, many flight routes have yet to resume, some 40 percent of hotels still haven't reopened, and many other countries including the US and UK currently have their own travel warnings in place.
 
Overseas tourists spent a record €40 billion in Italy in 2017, according to the most recent Banca d'Italia figures.
 
The numbers show that the majority of Italy's tourist revenues – 67 percent – are concentrated in just five regions: Lombardy, Lazio, Veneto, Tuscany and, more recently, the southern region of Campania.
 
The south continues to make less money from tourism than the centre and north, despite visitors tending to stay longer there.
 
This year, a lack of tourists is the very opposite of the usual problem: Italy's most established tourist destinations famously suffer from overcrowding, especially in the peak summer season. Many local residents' groups have long warned that the influx, however profitable, takes a considerable toll on their quality of life and jeopardizes the survival of Italy's heritage, the key to its appeal. 
 
Residents' groups and even some of those working in the travel industry say now is the time for change, with some Italian attractions saying they'll be doing things differently in future.
 
Italian tourism chiefs say they are now looking at ways to make the industry “greener and slower”.

“Post-Covid crisis, there will be an opportunity to tackle the issue of sustainability and a new way of proposing and experiencing tourism,” 

Palmucci predicts that the tourism industry will recover quickly, once unrestricted travel begins again, with the market getting back to where it was in 2019 “by 2022.”

He said he expects “a rapid recovery of international tourism from distant markets, especially in the States.”

However many tourism businesses warn that they might not be able to to hold out much longer, with small businesses in particular saying they're feeling the squeeze and have had little support from the government.

Some small accommodation business owners told The Local earlier in June that a government scheme meant to incentivise tourism could actually leave them out of pocket in the short term.

“We’ve had requests from guests wanting to use the 500 euros off your holiday scheme, but we’re expected to claim the money back through tax credits which could take a long time,” said one hotel owner in Umbria, who gave her name as Stefania. 

Bernabó Bocca, president of Italian hoteliers' association Federalberghi, called on the government to provide more assistance for the sector, telling the Senate in that “some of the measures taken so far go in the right direction, but with maddening slowness.”

“We need to increase resources to support tourism and speed up the time taken for measures to come into force,” he said. “otherwise companies won't make it.” 

A closed hotel in central Rome. File photo: AFP

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TRAVEL NEWS

German train strike wave to end following new labour agreement

Germany's Deutsche Bahn rail operator and the GDL train drivers' union have reached a deal in a wage dispute that has caused months of crippling strikes in the country, the union said.

Published: 26 March 2024 09:55 CET
German train strike wave to end following new labour agreement

“The German Train Drivers’ Union (GDL) and Deutsche Bahn have reached a wage agreement,” GDL said in a statement.

Further details will be announced in a press conference on Tuesday, the union said. A spokesman for Deutsche Bahn also confirmed that an agreement had been reached.

Train drivers have walked out six times since November, causing disruption for huge numbers of passengers.

The strikes have often lasted for several days and have also caused disruption to freight traffic, with the most recent walkout in mid-March.

In late January, rail traffic was paralysed for five days on the national network in one of the longest strikes in Deutsche Bahn’s history.

READ ALSO: Why are German train drivers launching more strike action?

Europe’s largest economy has faced industrial action for months as workers and management across multiple sectors wrestle over terms amid high inflation and weak business activity.

The strikes have exacerbated an already gloomy economic picture, with the German economy shrinking 0.3 percent across the whole of last year.

What we know about the new offer so far

Through the new agreement, there will be optional reduction of a work week to 36 hours at the start of 2027, 35.5 hours from 2028 and then 35 hours from 2029. For the last three stages, employees must notify their employer themselves if they wish to take advantage of the reduction steps.

However, they can also opt to work the same or more hours – up to 40 hours per week are possible in under the new “optional model”.

“One thing is clear: if you work more, you get more money,” said Deutsche Bahn spokesperson Martin Seiler. Accordingly, employees will receive 2.7 percent more pay for each additional or unchanged working hour.

According to Deutsche Bahn, other parts of the agreement included a pay increase of €420 per month in two stages, a tax and duty-free inflation adjustment bonus of €2,850 and a term of 26 months.

Growing pressure

Last year’s walkouts cost Deutsche Bahn some €200 million, according to estimates by the operator, which overall recorded a net loss for 2023 of €2.35 billion.

Germany has historically been among the countries in Europe where workers went on strike the least.

But since the end of 2022, the country has seen growing labour unrest, while real wages have fallen by four percent since the start of the war in Ukraine.

German airline Lufthansa is also locked in wage disputes with ground staff and cabin crew.

Several strikes have severely disrupted the group’s business in recent weeks and will weigh on first-quarter results, according to the group’s management.

Airport security staff have also staged several walkouts since January.

Some politicians have called for Germany to put in place rules to restrict critical infrastructure like rail transport from industrial action.

But Chancellor Olaf Scholz has rejected the calls, arguing that “the right to strike is written in the constitution… and that is a democratic right for which unions and workers have fought”.

The strikes have piled growing pressure on the coalition government between Scholz’s Social Democrats, the Greens and the pro-business FDP, which has scored dismally in recent opinion polls.

The far-right AfD has been enjoying a boost in popularity amid the unrest with elections in three key former East German states due to take place later this year.

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