Pandemic of fear
Andreas Andreadis Sani / Ikos Group CEO
The pandemic appeared like a bad dream and caught us all unprepared. At the same time, it has spurred a pandemic of fear, which is what causes major financial catastrophes.
Today, of course, the protection of public health, human life, the health of our employees and our visitors is paramount. But the pandemic of fear, which will probably last longer, must also be curbed. This unexpected and gloomy picture unfortunately finds Greek tourism in a particularly vulnerable state, facing its biggest crisis ever.
The precise duration and intensity of the Covid-19 pandemic is unknown. It seems likely it will be limited to the current year, but maybe it will reach into the first half of next year. Economic scenarios for businesses in the tourism industry point to a loss of between 50 percent of revenues in 2020 and the loss of their entire annual 2020 revenue and a partial loss in 2021.
Loss estimates are based not only on the drop in demand by holidaymakers but also on the widespread monetary losses that the distribution networks will suffer, especially if the entire season is lost, such as tour operators, travel agencies, airlines etc. This will also hamper the regular distribution of tourism products for 2021.
The first priority today is to support businesses’ liquidity by covering part of their losses – totaling several billion euros – in order for them to survive and avoid mass layoffs. Here, the involvement of banks and the Bank of Greece – and obviously government guarantees – will be key. At the same time, other simple horizontal measures will also be needed, such as the abolition of social security contributions for three months (and not just their suspension), support for rotating employment and the extension of unemployment benefits to seasonal employees until they can be recruited.
In addition to the special efforts of the ministries of Health and Civil Protection, the National Public Health Organization (EODY) and the country’s entire national healthcare system, I have to say that both the rest of the government, and in particular Prime Minister Kyriakos Mitsotakis, as well as our agencies – especially the Confederation of Greek Tourism (SETE), the Hellenic Chamber of Hotels and the Greek Federation of Hoteliers – are doing a great job. Their reflexes to date have been exemplary and the measures being studied or already announced seem to be in the right direction.
Of course, the measures announced are based on the base scenario, that is the assumption that the tourist season will start in the second half of this year. Authorities should now start planning for the conservative scenario, which signals a nightmarish decline in gross domestic product. The measures will evolve, be specialized and implemented depending on the data. No one knows how things will play out. And as the saying goes, “the devil is in the details.” But the stakes are truly enormous.