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Tourism overturns due to COVID19: Prices fall in the Mediterranean and rise in the north

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Fleeing the overcrowding of the Mediterranean, many travelers have chosen this summer to spend their holidays in the north of Spain. To their surprise, what they have found are destinations with a high level of occupancy that do not differ much from the levels of previous years. These regions offer destinations that are not overcrowded and, in addition, have achieved better results in the fight against the coronavirus, which has allowed them to attract tourists. On the contrary, the Mediterranean and the big capitals are having the worst summer in decades that seems, rather, the full low season.

While waiting to know the tourist arrival data for July that the INE will publish in two weeks, the data on the prices of the accommodation provides a first approximation that allows us to check the situation of demand in the different territories. The differences are abysmal, so much so that in the Balearic Islands hotels have dropped prices to try to attract tourists, while in Asturias they have raised them taking advantage of the high demand they are experiencing.

June production was still 14% below the levels of a year ago, the second-worst figure in the eurozone, as a result of the car and textile stoppage

The price of accommodation in the country as a whole sank 11.5% in July compared to the prices of June. There has never been such a sharp drop in prices, not even something like this happens when a high season ends. For example, the fall in prices in the months of October after the summer is usually around 6%, almost half that of the current drop. This shows how the peak season has really been missed this year. And even with this drop in prices, it is not being possible to avoid the collapse in the arrival of tourists.

However, not all regions are going through a crisis with the same severity. In the north, the initial results invite us to think about an acceptable summer. These regions are being saved for various reasons. The first is that they do not have a very high dependence on international tourism, which is what has really collapsed. The second is that they are less crowded destinations, precisely because the demand under normal circumstances is less than that of the ‘sun and beach’ destinations. And the third is that they have achieved better results in the fight against the pandemic, which makes them safe destinations.

Asturias is the paradigm of these three positive factors, which has been reflected in the price of accommodation. In July, the rates were almost 5% higher than the same period of the previous year and it is the only autonomous community that registers price increases. A fact that also shows that good results against the pandemic are a guarantee of economic success.

For Asturias, this good summer (compared to the rest of Spain) is a bottle of oxygen, since its economy has been stagnant for a decade as a result of the great failure of the industrial reconversion. Asturias is the paradigm of decaying Spain, so it finally gets the good news that will allow it to reduce the growing gap it maintains with the rest of Spain.

In the neighboring communities of Asturias, the data were also favorable. Although prices did fall, they fell clearly below the national average. In Cantabria, they fell 4.7% and in Galicia, 7%.

The data from these three northern communities contrast with those recorded by the Basque Country and Navarra, two regions in which tourism should have kept pace with their neighbors, but did not succeed. Both suffered the hardest from the virus during the months of the state of alarm, which would explain why they lagged behind in July. Specifically, the prices of accommodation in the Basque Country fell by 13% and in Navarra, they fell by no less than 25%.

In the Mediterranean, on the contrary, this year the high season has disappeared. The prices are typical of spring, or even autumn, with continuous offers to try to fill the supply of beds. The records of the Balearic Islands are clearly the worst, with a price drop that reaches 23% compared to the same month of the previous year. In June it already registered one of the worst tourist arrival figures in all of Spain with a 90% collapse.

The beaches of Mallorca and Ibiza spend the summer full of foreign tourists who this year have chosen to stay in their countries. Catalonia also has a high dependence on international travelers and the bad weeks it is going through are reflected in hotel prices. In July they fell no less than 19.6% with the three coastal provinces suffering a crash of more than 19%.

Madrid is also going through a very delicate year. In the capital, the expansion of the virus was very strong, and so were the outbreaks during the month of July. The distrust generated by the region, coupled with the drop in demand for tourism in the big city, is resulting in one of the worst summers in decades. The fall in the price of accommodation exceeded 15% in July and the expectations for August are not better at all. On this occasion, the north of Spain will emerge stronger from the crisis, but it will not be because of its industry, but because of its tourism, paradoxically.

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