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The tourism crisis is not temporary

2022-06-29 | Global News

The peak season begins with chaos in the airports, massive cancellations and tourism in general suffering from an industrial crisis that has nothing to envy to that of the most veteran sectors of national capital. Like other consequences of the crisis and the war, the debacle of the tourism sector is no temporary phenomenon. For the workers of the sending countries the relief of "vacations away" is over and for those of the receiving countries the recourse to seasonal work is over.

How did the pandemic affect long-term capital investment in the tourism sector?

Beach in Gran Canaria during the first weeks of the pandemic. Lockdowns meant the move to 'Zero Tourism'.

Beach in Gran Canaria during the first weeks of the pandemic. Lockdowns meant the move to "Zero Tourism".

The pandemic hit the tourism sector hard and from day one. And if 2020 saw an abrupt drop, 2021 was even worse: globally, tourism in 2021 invoiced 72% less than in 2019. In countries like Spain, the sector's weight in GDP fell to historic lows (5.5%). It was not just a two-year losing streak. The capacity for recovery of what tourism means for many national capitals, from Thailand to Costa Rica passing through Spain, Greece or Tunisia was seriously in doubt.

First of all because the major hotel chains were already seriously indebted before Covid and the tour operators, which had been at the forefront of financing for years, were barely surviving in an environment of near-zero interest rates, as became clear as early as 2019 with the bankruptcy of Thomas Cook. And to this already difficult situation for invested capital, there was the medium-term prospect of an increase in aviation fuel prices due to the tightening of the Green Deal.

As a result, the banks limited credit during 2021, inviting hotel companies and major players to sell at discount.

Then, the major tourist capitals arrived fragile in 2022, deeply in debt and selling assets to pay cash.

In Europe, the last hope of the major groups is to obtain a major sectoral conversion project (PERTE) on account of EU funds. But, for the time being, at least in the Spanish case, it is neither here nor expected. All access to NextGen funds is limited to 3.4 billion to be distributed among the numerous and indebted agents of the sector.

Read also: Zero tourism (28/4/2020)

Is 2022 not being a year of "recovery"?

Chaos at Europe's airports

Chaos at Europe's airports

In spite of everything, the year did not start badly for the vast network of companies and investments dedicated to exploiting tourism. To continue with Spanish data, the number of international tourists in the first four months of the year rose to nearly 15.8 million (+755.8% compared to 2021) who spent 18,753 billion euros (+840.7%). But the war in Ukraine, which accelerates the development of the contradictions of capitalism at all levels, was not going to make an exception for the sector.

1 The rise in fuel prices put airlines on the ropes. It was most visible in countries like Nigeria and India, but in Europe and the US the impact on costs was no less. And with raw material costs skyrocketing, the last thing they were willing to do was to raise wages.

2 But already low wages for cabin and baggage handling staff at airports were being eaten by inflation, so many workers who had been furloughed during the pandemic had already found alternative jobs in other, better-paying industries and when companies called them back, they did not return to their old jobs.

As a result, groups such as Lufthansa cancelled thousands of flights. The chaos multiplied at Europe's major tourist departure airports, from London to Frankfurt via Schiphol. And the workers, suffocated by overwork and with real wages already dropping by nearly 10%, began strikes at major companies such as Ryanair, Easyjet, British Airways, Aeroports de Paris and Brussels Airlines.

In Mallorca, Madeira, Tenerife, Tunisia or Mykonos, the expected tourists simply did not arrive.

Workers and tourism: the two sides of a fundamental contradiction

Taking sick leave in the hotel and catering industry, among many other sectors, whether for menstrual pain or anything else, puts you at risk of dismissal.

Taking a sick leave in the hotel and catering industry, among many other sectors, whether for menstrual pain or anything else, puts you at risk of dismissal.

Workers around the world are well aware of the general working conditions in the hotel and tourism industry: extreme precariousness, unpaid hours, violent and unbearable sexism are our daily bread and butter.

At the wage conditions that capital offers, those that guarantee its profitability, even in low-wage countries in European terms such as Croatia, they claim to have 10,000 vacancies. In France, with one of the highest minimum wages in Europe, the figure rises to 200,000. Both are bidding to import seasonal workers from North Africa and Eastern Europe.

Until now, the bulk of this voracity of capital was concentrated in bars, restaurants and small hotels. The tourism petty bourgeoisie had essentially the same problems as the agricultural or commercial petty bourgeoisie: the difficulty of capitalizing small businesses and sustaining the profit margin in a sector that, as a whole, attracts new capital through concentration in large chains and integration with online systems, tour operators and airlines, which is beyond the reach of small landowners.

But now, that pressing need to increase exploitation in absolute terms, paying less in real terms for the same hours, is becoming omnipresent: the big hotel chains, tour operators, airports... are stubbornly entrenched and will not even agree to talk about maintaining the real purchasing power of their workers' salaries.

This is not very different from what is happening in other sectors. Workers all over Europe are finding it more and more difficult to go on vacation, especially abroad.

In other words, the reaction of the tourist industry to falling margins and profits -lowering wages- is the very thing that produces and feeds the problem it is trying to solve by exploiting workers even more. It is the same contradiction, a fundamental contradiction of capitalism, seen from two different sides.

Is "quality tourism" the alternative?

Urbanization with golf course in Murcia

Urbanization with golf course in Murcia

The statistical mirage to which capital clings is that, as the minimum family income that allows travel abroad is increasingly higher, the "new tourist profile" will spend more. The "big idea" of the big tourism industry is to focus in the future on this shrinking but apparently juicier market. That is to say, the answer to the lack of mass of customers is... to reduce the accessibility of tourist offers even more than the system itself does.

From there, the discourses on "quality tourism", "environmental reconversion" of the sector, etc., are built. The intellectual petty bourgeoisie, which always had a half-classist and half-xenophobic resistance against mass tourism, embraces the discourse as an expression of a new ecological and "local culture-friendly" era, turning the contradictions of capital into a false virtue.

In the background lies the reality: the crisis is worsening, the number of workers in the big emitting countries who can afford a tourist package is decreasing, the Green Deal will underpin and perpetuate the rising costs of air travel we are already seeing with the war, and both the total foreign currency attracted and the jobs generated will fall because the number of foreign tourists and the average size of the coastal tourist establishments will fall.

Measures such as leaving international flights to the Canary Islands out of the CO2 emissions tax until 2030 may alleviate the coming fall... for a few destinations. But not its global impact for the capital of the receiving countries, starting with European destinations in Latin America, Southern Europe and the Maghreb, probably in that order.

For workers, the decline in tourism already means downward pressure on real wages and access to consumption and the increasing difficulty of finding "seasonal jobs" in deindustrialized coastal or mountain areas during the high season.