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Unsurprisingly, yet soberingly, the European tourism sector is reeling.
According to a recent UBS analysts’ note – which cited data from Planet, the VAT refund provider – tourist spending across Europe in March fell 68.4% year-on-year.
“Chinese spend in Europe was down -84.6% y/y, with all other nationalities also declining in March. Italy understandably saw the biggest drop, down -96% y/y, and it is reasonable to expect similar trends for other countries in April,” the report said.
UBS said that March spending on luxury goods and services in Europe – from the likes of Chanel, Gucci and Louis Vuitton – has nosedived by 78% year-on-year.
UBS analysts add that as coronavirus cases start to rise in Europe, governments will be looking to lift lockdowns. But the timing on this remains uncertain.
” The timing and pace of recovery remain uncertain; in our forecasting we assume that luxury stores remain closed throughout April and May, reopening in June. As a result, luxury spend is likely to be heavily impacted for at least two months in Q2, with the impact from a tourist perspective expected to last for longer.”
The stats corroborate a recent warning from the UN’s World Tourism Organization (UNWTO), which described tourism as “one of the hardest-hit by the outbreak of COVID-19.”
In a statement updated Tuesday, UNWTO said it had “revised its 2020 forecast for international arrivals and receipts,” while emphasizing that this forecast is “likely to be further revised.”
“Against a backdrop of travel restrictions being introduced, UNWTO underscores the importance of international dialogue and cooperation and emphasizes the COVID-19 challenge also represents an opportunity to show how solidarity can go beyond borders,” the statement added.
At the time of writing, five different European countries have reported over 100,000 cases of COVID-19: the UK, Spain, Italy, France, and Germany. The overwhelming majority of European countries remain under some form of nationwide lockdown.
