Gibraltar lockdown measures have been more flexible than many other countries, the death rate thankfully stands at zero and there are no current admissions to hospital due to covid19.
The Government of Gibraltar has put this down to social distancing, but how will the “new normal” affect Gibraltar’s tourism industry going forward, which brought in £274m in 2018?
During yesterday’s press conference (30.04.2020), Minister for Financial and Digital Services Albert Isola announced that the Government’s vital BEAT Covid measures have seen the pay out of £5.7m to 5,649 inactive employees from Gibraltar and Spain, and 500 self-employed persons.
These measures will provide a vital lifeline to the sectors which they apply to while Gibraltar goes through the complex and delicate process of understanding the virus and its consequences.
In relation to the easing of the lockdown and getting businesses open again, Minister Isola assured that the “easing of the lockdown is coming soon” but that it will be “gradual and slow”. Shops will begin to open again, but “at less capacity”.
Further details of this are to be announced soon.
At the press conference, GBC’s Kevin Ruiz pointed out that many businesses rely on volume in order to make profits. So, with heightened and necessary controls at the frontier, airport and ports, less people travelling and shops and restaurants running on reduced capacity, how will Gibraltar’s economy make up for the loss?
This is the tough question facing every country across the globe.
Minister Isola stated during the press conference: “I think if anybody thinks in business today that they will be able to make the same profits this year as they did last year they’ll be in for a big surprise. Businesses are going to have to learn how to work in the new normal.”
“The measures that we will be announcing to ease the lockdown will be gradual and slow, and as we see that transpiring, we can also begin to look at what measures we can give as a safety net in order to help them move forward.”
As reported by Reach Alcance last year, Gibraltar’s tourism industry brought in almost £274 million in 2018.
The breakdown showed that tourists coming in through the frontier with Spain spent £193.8 million that year, with cruise ship passengers spending £16.7 million, yacht visitors spent £607,000, supplemental accommodations at £13.8 million and transit visitors spent £3.2 million.
2018 also showed that 11 million people visited the Rock – a 4.4% increase compared with 2017.
Gibraltar’s economy stood at £2.344 billion in 2018, meaning that tourism contributed a good proportion to the overall GDP.
Meanwhile, in an analysis carried out by the Institute of for Social and Economic Research (ISER) of the University of Essex estimated that the effects of the pandemic and the subsequent lockdown will see 6.5 million jobs lost throughout the UK.
The hardest hit sector, according to the study, will be Accommodation and Food Services and general services – services make up sizeable proportion of the Rock’s GDP.
There are similar projections for the Spanish economy.
So, as the Government continues to perform the difficult balancing act between keeping the rate of infection low, keeping businesses afloat and future-proofing the Rock’s economy through radical adaptation, how will the tourism industry fare? This is question being faced by countries across the globe.
Tourism accounts for 10% of the EU’s economic output.
British Airways announced 12,000 redundancies on the 29th of April and the German Economy Minister Peter Altmaier said on Wednesday, “we will experience the worst recession in the history of the federal republic” as projections stated that the German economy could shrink by 6.3% this year.
In Spain on the other hand, hotels will be allowed to reopen as from the 11th of May with strict social distancing in a controversial move which has come under criticism by the ‘Hotel Business Association of Madrid’.
Gibraltar has proven to be a leader in effective mitigation of the pandemic to date, with a low and currently slow rate of infection and what Fabian Picardo called ‘bespoke’ lockdown methods tailored to Gibraltar.
Similar methods will have to be applied to rescue the economy, and more information will be released soon. The Government has been totally up front; Gibraltar faces a new reality which requires each one of us to contribute as if we were on a war footing.
Press conferences to date have focussed on the term “the new normal” and this new reality will provide some opportunities, but Gibraltar must be awake and lean enough to capture them.
As the Chief Minister Fabian Picardo said during his Easter message:
“Let 2020 go down in Gibraltarian history as the year of our reckoning.
And let us go down in history as the generation of Gibraltarians who were equal to this challenge. With our younger generation in particular being our beacon of hope.”