Fear of Second Wave Impact European Travel, Spain Faces the Wrath

Summary

• Countries across the world are expecting the second wave of the coronavirus infection
• British Government has imposed quarantine rule of 14-days on travellers returning to the United Kingdom from Spain
• Airline companies such as British Airways, EasyJet and Wizz Air have criticised the decision of the Government

Cases of COVID-19 are declining in many parts of the world, while on the same time there are regions which are seeing spikes. But the pandemic is still not showing any signs of abating anytime soon. There are some cities and towns which have experienced severe outbreaks and appear to be recovering, and there are places which have not had many cases, but some states are now experiencing a rise in COVID-19.

As communities begin to reopen, people are understandably eager to be able to go out and resume some of their regular activities. Not having an effective therapy or vaccine, the re-openings are intended to take place safely while maintaining social distancing, and masking and hand-washing as had been done over the last few months. Some people relax these infection prevention efforts as soon as places begin to reopen, and this can be the reason for the number of coronavirus infections to rise. The United Kingdom has witnessed 298,685 confirmed cases of COVID-19 with the number of deaths ranging to 45,738, till 27 July 2020.

In some other parts of Europe too there has been a surge in case of COVID-19. The Foreign and Commonwealth Office (FCO) of the UK advised against all non-essential travel to mainland Spain based on the current assessment of COVID-19 risks. Regions including the Canary Islands (Tenerife, Fuerteventura, Gran Canaria, Lanzarote, La Palma, La Gomera, El Hierro and La Graciosa) and Balearic Islands (Mallorca, Menorca, Ibiza, and Formentera) are exempt from the advice mentioned above. It has come after certain districts in the nation, in particular Catalonia, Navarra and Aragon (including the cities of Zaragoza, Pamplona and Barcelona), reported a tremendous spike in everyday coronavirus contaminations. Continuous monitoring is being carried out by the Public Health England (PHE) in the Balearic and Canary Islands closely. The Government has declared that all the travellers coming back to any UK nation from Spain after midnight of 26 July 2020 are required to self-isolate for 14 days. The Department for Transport affirmed the declaration.

France was another country, toeing the line of UK government and all the travellers who are coming from a list of 16 countries from outside the EU where there has been a high volume of coronavirus cases would have to compulsorily have to undergo tests at the airports and ports. Norway followed the suite and re-imposed a 10-day quarantine rule for the people arriving from Spain.

Travel firms react spontaneously

In response to the UK government’s COVID-19 travel guidance, TUI, Europe's famous company of the travel and leisure sector announced that because of the changes made in the Government's travel advice, it would be dropping all holidays to the mainland Spain up to and including 9 August. However, the movement to the Balearics and Canaries will continue. It also added that knowing how much its clients anticipate their vacation abroad, and some will be able to oblige with new quarantine restrictions; therefore all those wishing to travel to these islands will have the option to travel as planned from 27 July 2020. Customers who had planned to travel to all the areas of Spain between 27 July and Sunday 9 August are needed to cancel or make changes in their holiday plans and will receive a full refund, or will have the option to rebook their holiday with a booking incentive. The company said they would contact all its customers and will update them on 31 July 2020 with holidays from 10 August.

The UK government had opened air corridors across various European nations, but seeing the rising number of cases in Spain, it suddenly decided to reverse the decisions only after a few weeks of the announcement. It had previously announced that those who wanted to travel to European countries could do so from 4 July 2020. They were not subjected to the 14-days quarantine rule after returning to the UK. However, there were only required to share their address with the Government.

To know more, do read: Pack Your Bags If You Wish To Travel To Europe

About TUI

TUI AG is a Germany-based integrated tourism group, which is the largest leisure, travel and tourism company in the world and is very popular in the United Kingdom. The company offers a wide range of services and is the owner of travel agencies, hotels, airlines, cruise ships and retail stores. It offers Britons with great holiday packages across the world at pocket-friendly prices. Listed on the FTSE 250 index of the London Stock Exchange, it has been operating since the last 20 years with a workforce of approximately 70,000 employees.

Stock Performance

TUI AG (LON:TUI) stocks were trading at GBX 300.40 on 27 July 2020 at 12:55 PM, down by 11.54 per cent from its previous close of GBX 339.60. The 52-week low/high range was GBX 254.00/1,081.50. It had a market capitalization (Mcap) of £2,000.31 million. The volume traded at the time of reporting was 5,280,863. The company recorded a negative return on price, which was 65.74 per cent on YTD (Year to Date) basis.

Reactions of the development of other Tourism and Travel sector companies

Criticizing the sudden decision of the Government, British Airways, said that it has led to chaos for the travellers who had already planned their holidays, and has disrupted the operations of many holidaymakers of Britain. The airline company commented that it would continue to operate.

International Consolidated Airlines Group SA (LON:IAG) stocks were trading at GBX 183.60 on 27 July 2020 at 1:00 PM, down by 7.55 per cent from its previous close of GBX 198.60. The 52-week low/high range was GBX 168.20/671.00. It had a market capitalization (Mcap) of £3,944.71 million. The volume traded at the time of reporting was 19,192,572. The company recorded a negative return on price, which was 68.78 per cent on YTD (Year to Date) basis.

EasyJet Plc was also disappointed with the decision taken and said they would also be operating on fully as per their schedule. Customers wanting to abstain from travelling will be allowed to cancel their flight bookings a change in the fee or will be entitled to a voucher of the value of the booking.

EasyJet PLC (LON:EZJ) stocks were trading at GBX 522.80 on 27 July 2020 at 1:04 PM, down by 11.27 per cent from its previous close of GBX 589.00. The 52-week low/high range was GBX 475.00/1,552.00. It had a market capitalization (Mcap) of £2,690.26 million. The volume traded at the time of reporting was 5,107,883. The company recorded a negative return on price, which was 58.81 per cent on YTD (Year to Date) basis.

Wizz Air will also be continuing their activities but will revaluate its schedule soon due to the diminishing demand.

Wizz Air Holdings PLC (LON:WIZZ) stocks were trading at GBX 3,330.00 on 27 July 2020 at 1:06 PM, down by 3.59 per cent from its previous close of GBX 3,454.00. The 52-week low/high range was GBX 2,006.00/4,496.00. It had a market capitalization (Mcap) of £2,951.15 million. The volume traded at the time of reporting was 95,023. The company recorded a negative return on price, which was 13.43 per cent on YTD (Year to Date) basis.

Conclusion

British tourists have also reacted to the abrupt decision with dismay after the Government imposed quarantine measures on travellers. It has upset many people who had planned their holidays or were already on holidays. However, the Government has taken its stand on not reversing its decision for the time being.

The tourism industry will get a blow, concerning the decline in the demand for the summer holiday, and it may lead to derailing the economy once again from the expected growth path. However, the intention is that the country does not face another wave of infections, that is why the Government has taken such an abrupt decision, and it is primarily to safeguard its citizens from contracting the disease.