Speech by Commissioner Thierry Breton at the European Parliament on 21 April 2020

European Parliament Committee on Transport and Tourism (TRAN)

 

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The world is facing an unprecedented threat to public health, the Coronavirus. Today, Europe is the epicentre of this crisis. This pandemic knows neither borders nor nationality. Its rapid spread can only be stopped if we act together.

We therefore have a collective responsibility to mobilise all the tools at our disposal to respond to this pandemic. We must act with urgency and boldness, with responsibility, but above all in a spirit of unwavering European solidarity.

Let me say very clearly that Europe in this crisis must prove that solidarity is not an empty word, but a tangible reality, a compass - the only possible one - for our action.

Beyond the health emergency, we are experiencing an economic shock on a scale that has not been seen since 1929. I say this clearly - because we must be completely realistic about what lies ahead: the crisis is and will be very serious.

The first European response has been rapid and strong, with the injection of liquidity by the ECB, the flexible application of the Stability Pact, measures to facilitate State aid, the increase in the EIB's liquidity support for SMEs and the solidarity instrument to help workers keep their incomes and help businesses stay afloat (SURE).

All sectors of the economy are affected, but I will focus on the challenges facing the tourism ecosystem, in particular all its SMEs, family businesses, traders, travel agencies, but also its larger players such as airlines and cruise lines.

Concerning the impact of the Coronavirus, if we take the tourism ecosystem as a whole - and this is the spirit in which I work - we know that it:

  • contributes between 10 and 11% of the EU's GDP;
  • accounts for 12% of employment in the EU, i.e. 27 million direct and indirect jobs;
  • is made up of almost 3 million businesses, 90% of which are SMEs, some of them very small.

Europe accounts for 50% of the world tourism market in terms of arrivals. There is no doubt that it is a very important European economic sector.

It is also one of the hardest hit sectors, if not the hardest, given the indispensable mobility restrictions that have been put in place.

At world level, Covid-19 is expected to lead to a reduction in international tourist traffic of 20% to 30% by 2020, according to the World Tourism Organization. The OECD anticipates a 45% to 70% decline in the tourism economy, depending on the length of the health crisis and on the pace of recovery in travel and tourism activities. This amounts to losses of between 275 and 400 billion euros for the travel industry worldwide.

At European level, I am in permanent contact with all the stakeholders. I have discussed several times directly with the various industry participants and will continue to do so on a regular basis.

The situation is serious. And I say this all the more seriously because we do not know how long this situation will last for.

We estimate that revenue losses at European level are 50% for hotels/restaurants, 70% for tour operators and travel agencies, and 90% for cruises and airlines.

But these aggregate figures hide significant geographical disparities. And I am not forgetting the many geographical areas, regions, islands in Europe, some of which depend almost exclusively on tourism and which find themselves in very complicated situations, in Spain, Greece, Italy, France and elsewhere.

Nor do I forget that behind these figures there is a social reality, these entrepreneurs, men and women, who have a quasi-familial relationship with their hotel, their restaurant, their employees whose activity or employment is threatened. For we are facing a clear risk of companies going out of businesses and jobs being lost.

Our response must be twofold: firstly, in the very short term, we must help these businesses to get through this difficult period, and secondly, in the medium term, but quickly, we will have to start reforming the European tourism sector.

I would like to expand on these two aspects:

1. Emergency measures

In response to immediate needs, we are working to provide a safety net for the entire sector.

Ensuring liquidity is the first priority. But funding must also be provided quickly to bridge this period until tourism flows resume.

The tourism sector must therefore benefit in the coming weeks from the measures announced, be it the ECB's liquidity programme, specific and targeted national state aid, support for short-time working, and EIB/EIF investment. In particular, with the guarantee of the Union's budget, the European Investment Fund, together with banks from all over Europe, we will mobilise around EUR 8 billion of funding to help almost 100 000 affected European SMEs, including in the tourism sector.

In addition, the Coronavirus Response Investment Initiative (CRII), which amounts to EUR 37 billion, will enable Member States to mobilise unused Structural Fund budgets for various purposes, including tourism. With the support of the European Parliament received on 26 March this year, this initiative has already entered into force on 1 April.

However, we will have to go further, with a European industrial recovery plan for all European industrial ecosystems, the famous fourth pillar of the last Eurogroup - a Marshall Plan, as President Ursula von der Leyen puts it.

According to our estimates, tourism should be the main beneficiary of such a plan. It is therefore essential for it to be implemented quickly.

We are also looking at our regulatory arsenal in order to adapt it accordingly if necessary:

  • Together, we have adopted a strong measure to avoid ghost flights and to alleviate the pressure on airlines to retain their airport slots;
  • We have also presented guidelines on passenger rights, which establish the exceptional nature of the situation. This means that airlines do not have to compensate passengers, but - and we are clear on this - they must offer them, at their discretion, a refund or a voucher for a later flight. Consumer protection is at stake;
  • Finally, and even if it is too early to talk about this now, it will be a question of preparing the best possible exit strategies from the containment measures, and what this means for the gradual resumption of tourist activity and mobility within the Schengen area and outside of the EU. It will be a question of establishing clear conditions and preventive measures, coordinated at European level.

2. Inventing tomorrow's tourism

Beyond the immediacy of the situation and the management of the short-term consequences of the crisis, we must now look ahead to the future, to the world of tomorrow, which will inevitably be different for all our societies and all our economies.

Make no mistake: tourism will be no exception. Together we will have to reinvent and rethink a sustainable, digital and resilient European tourism sector.

Any recovery plan, any public support for tourism, must be accompanied by transition, in order to embrace, as in all other sectors, environmental, digital and strategic realities.

This was a necessity before this crisis, and it is now becoming an exit imperative. Because my ambition, which I know is shared by your Committee, is to maintain Europe as the world's leading tourist destination in terms of value, quality and innovation.

But it is also to create, together, a new world benchmark for responsible, sustainable and innovative tourism in response to the excesses of mass tourism, the reality of the ecological transition and the emergence of new platforms that are challenging the balance of the ecosystem.

I see three components of such a strategy.

Firstly, tourism must be at the heart of the European Green Deal and promote sustainable tourism in the face of the "over-tourism" that can be observed in certain cities or regions. It will be a question of finding a balance between the preservation of tourist ecosystems and economic realities. I am well aware of the difficulty of such a change. It is not a question of preventing people from travelling, but of promoting, for example, local tourism. Such a change will also have to be accompanied by a new European policy on tourist mobility and a strong commitment at local level.

Secondly, tourism will have to go digital and find a balance between the so-called traditional players and the major digital platforms. It is not a question of pitting one against the other. Each will have to adapt, some by becoming more digital, others by becoming more responsible in their role within the ecosystems. The responsibility of the platforms in general, and in the tourism sector in particular, is an element on which I believe there will be a before and after this crisis. The Digital Service Act that we are already working on will be the opportunity to find such a balance.

Finally, tourism must become strategic: because of its economic and social weight, and because it is based on a rich European history and priceless European cultural diversity, it must also protect itself. In particular, it must protect itself from aggressive investment strategies by non-European countries, which might see the current crisis as an opportunity to acquire European jewels at a lower price. I will be attentive to this, together with the Member States, so that our tools for monitoring foreign investment are on alert.

Faced with such challenges, we will need a coordinated response at European level. We must work together: Parliament, Council, Commission, with the whole ecosystem, without forgetting the regions and localities, which for me are a key level of the new governance that we must set up to define the European tourism strategy of tomorrow.

This is also the new approach that I am advocating in relation to ecosystems, in order to bring all the players together around the same objective. We must pool our efforts within an ad-hoc mode of governance that could be based on the work of the Parliament's Tourism Task Force, but also on the work of the European ministers in charge of tourism, whom I will meet next week, and other more regional platforms.

I propose to organise as soon as possible - as soon as the health situation permits - a European tourism summit, in order to reflect together on the future and to build a roadmap towards a sustainable, innovative and resilient European tourism ecosystem.

Over and above the health emergency, which remains our current priority, this crisis is accelerating changes in the world, in our way of living and producing, in an age of digitalisation and awareness of our impact on the planet's resources.

In the face of this unprecedented crisis, there is no time to lose, especially for tourism. We must first of all - and this is normal - save the players in the ecosystem, and very quickly transform this sector so that it can play its full part in the profound transitions in our economy and our societies.

You can count on me on both these aspects. I am counting on your support in this exercise.