The rapid increase in the number of people infected by the virus as of March is having an impact on the confidence and demand from the main markets for Spanish destinations.

In just a matter of days, Spain has become the third most affected country in Europe in terms of COVID-19 infections, with over 2,000 confirmed cases. Despite control measures put in place and reassuring messages from the health authorities and tourism sector in the last week of February, the rapid increase in the number of cases has had a clear impact on confidence and demand indicators since the beginning of March.

Mabrian Technologies, a Travel Intelligence consulting firm specialised in identifying and anticipating tourist dynamics, has prepared a study on the impact of this crisis for Spain as a destination with regards to its four main European markets: United Kingdom, Germany, France and Italy.

The study measures the impact from different perspectives, both from tourists and potential tourists’ behaviour as well as with transactional data from the tourism sector, which help to quantify the impact in an objective manner.

Evolution of tourist mentions related to Coronavirus vs evolution of Security Perception.

As opposed to what has been observed in other destinations, such as Italy (see study), the Coronavirus crisis was not showing a clear impact on the tourism sector until the 25^th February. The majority of tourist mentions related to the virus appeared on that date. In the following days, there was a small and rapid decline in the number of mentions which then seemed to stabilise, until the beginning of March, when the volume of mentions picked up again.

Source: Mabrian Technologies 2020.

Taking into account the sentiment captured in these mentions, Mabrian calculates the Security Perception Index towards the destination. This indicator measures the confidence that tourists are showing towards visiting Spain. In this case, the evolution is also different to that observed in Italy.

Despite the fact that the Security Perception Index was affected on the days where high volumes of mentions related to the virus were detected (between the 25^th and 27^th February), it stabilised and started recovering over the following days, coinciding with the reassuring messages from health authorities and the tourism sector. However, at the beginning of March, and as the situation continued to evolve in Spain, a clear negative effect could be seen in the decline in confidence from visitors and potential visitors.

Source: Mabrian Technologies 2020.

By studying specific zones in Spain (the most affected zones as well as the major tourist spots), what can be seen is that the impact of the crisis is very unequal in terms of the volume of tourist mentions related to the virus. In terms of the Security Perception Index, when comparing figures at the start of the crisis to figures on the 3^rd March, the Basque Country shows the most substantial decline (-11.09%) out of the five destinations analysed. By contrast, the Canary Islands shows a slight improvement over this period.

Despite the general negative dynamics over the last few days, confidence figures remain in the high ranges.

The volatility of this indicator shows how highly sensitive the tourism sector is and how important it is to properly manage communication in the face of this crisis. Indeed, this could be the key element enabling recovery to previous confidence figures as soon as possible.

Evolution of spontaneous demand from main markets

A key component in the analysis of the crisis on the tourism sector is the ability to measure the effect that these perceptions are having on the tourist demand for Spain. To do so, Mabrian monitors the evolution of flight searches from the four main European markets towards the country’s main destinations. In the current analysis, flight searches between the 1^st of January and the 9^th of March 2020 to travel to Spain’s top 15 national airports between the 9^th March and January 2021 were taken into consideration.

Source: Mabrian Technologies 2020.

The British market shows an upward trend in flight demand to Spain since the beginning of 2020. At the beginning of March, however, this trend is interrupted. From the 1st of March onwards, demand for 2020 shows lower figures than demand in 2019, clearly showing that this could be an effect of the increase in intensity of the Coronavirus crisis.

Source: Mabrian Technologies 2020.

In the case of the German market, a downward change in trend can be observed even prior to the start of the Coronavirus crisis in Europe. As early as end of January, demand for flights to visit Spain was showing lower trends than those observed in 2019. Furthermore, this trend does not seem to deepen during the critical days of the crisis in Spain, thus potentially pointing to structural conditions instead.

Source: Mabrian Technologies 2020.

The Italian market, similar to the British market, shows a clear change in trend coinciding with the key dates of the crisis. In this case, the effect is brought forward by almost 10 days, to the 20th February, when the crisis is at its peak in Italy. As of 10th March, all flights connecting Italy to Spain have been cancelled. Mabrian will thus attempt to monitor if demand drops accordingly or if it holds up to some extent despite the lack of connectivity on offer.

Source: Mabrian Technologies 2020.

Out of the four markets analysed, the French market is the only one which, for the time being, maintains an upward trend in the demand to visit Spain.

While the upward trend in demand in comparison to 2019 has almost levelled off from February onwards, demand in 2020 has still remained above 2019 figures.

The data shows that the impact of the crisis on the tourism sector in Spain in the short term is almost inevitable. However, Mabrian remains optimistic regarding the potential effects that this could have for the high season. Indeed, they confirm that when analysing flight searches made until the 10^th March to visit Spain between the 1^st June and the 31^st August 2020, there is no major drop in demand in comparison to the data from 2019. The trend remains positive for those months from the United Kingdom, France and Italy. In contract, Germany does show a downward trend, which had however already been detected since the beginning of 2020 and which seems to continue until the high season.

Analysing flight searches as an indicator enables us to measure the direct impact on tourism with regards to a concrete situation, specifically for distant markets and destinations dependent on air connectivity such as islands. Identifying the different dynamics between the perceptions from the issuing markets and real demand is key in learning how to best manage recovery post-crisis in a tourist destination.

Direct impact on the tourism sector: evolution of average flight and hotel prices for Easter period

Another indicator offered by Mabrian’s study is the evolution of average prices for services in the tourism sector, namely flights and accommodation. In this case, they show us the direct effect that the current crisis is having on prices offered by airlines and hotels for the upcoming Easter period.

Source: Mabrian Technologies 2020.

By focusing on the same origins and airports as in the flight searches analysis (i.e. top 15 airports in Spain and top 5 airports per origin), this study compares average prices to fly to Spain as we get closer to the Easter dates in 2020. The results show an overall downward trend. Prices to fly to Spain for Easter are decreasing between 10% and 22% if we compare prices on offer by airlines in January vs prices on offer in February. Pending figures on the evolution since the beginning of March, this trend seems to show a downturn in demand for flights.

Source: Mabrian Technologies 2020.

On the other hand, the evolution of average accommodation prices for hotels over Easter is also showing a clear downturn indicative of a fall in demand. In this case Mabrian analysed average prices for overnight stays in a standard double room (accommodation only) of over 15 thousand hotels in Spain during the Easter period. When comparing average prices for Easter 2020 to average prices for Easter 2019, a clear drop in prices for all categories can be seen, in particular for 4 and 5 star categories, where the drop is close to 12%.

In light of all of these up-to-date indicators, Mabrian‘s specialists argue that the impact of the Coronavirus crisis in Spain as a tourist destination can be confirmed and is quantifiable. Despite this, they advocate conveying optimism regarding the potential for recovery from this situation and mitigating the impact in the medium term. To do so, it will be key to rely on the knowledge offered by advanced analytical tools.