MercoPress. South Atlantic News Agency

An estimated 40,000 tourism related businesses permanently closed in Spain

A man works last Thursday on the front of a recently closed bar in the major holiday resort of Magaluf in Mallorca Island. SEBASTIÁN ASTORGA

Devastated by the loss of customers during the virus crisis, around 40,000 bars, hotels, and restaurants in Spain have permanently closed, the hotel and catering industry said. The figure amounts to 13% of such establishments in Spain, a country in which tourism plays a major role in the economy, and where the population tends to eat out very often, Spain's hostelry federation said.

By the end of the year, that figure is expected to rise to 65,000 - or 20 per cent of the total. “It confirms our worst-case scenario,” said José Luis Izuel, head of Hosteleria de Espana, at a press conference.

At the height of summer and a month after European borders were reopened, “in popular tourism areas, there are no tourists, that's the harsh truth,” he said.

In areas like the Balearic Islands, he said, less than half the bars and restaurants had reopened. Business was also terrible for restaurants in business districts of Spain's biggest cities, which have remained largely deserted due to people working from home.

”Working from home is affecting breakfasts, the (late-morning brunch run for) Spanish omelette and churros, and the lunch menu, particularly in Madrid,” he said of a culture in which people often eat out from early in the day.

The sector's turnover could be slashed by as much as 50%, said the federation, which fears that between 900,000 and 1.1 million jobs, both direct and indirect, could be lost.

Speaking just hours after EU leaders approved a landmark 750-billion-euro (US$860-billion) virus recovery deal, industry leaders said they wanted “significant resources” for a sector that represents 6% of GDP and about nine percent of employment.

The world's second-most popular destination after France, Spain was badly hit by the virus that has claimed more than 28,400 lives and dealt a major blow to its tourism industry, which accounts for 12 per cent of GDP.

At the end of June, the government presented a 4.2 billion euro aid package for the tourism industry, mostly in the form of loan guarantees. But the sector has called for bigger gestures such as transferring funds, tax breaks or even “holiday voucher” schemes for Spaniards to subsidize holiday costs and boost national tourism, as seen in Italy.