The Spanish government is today set to seize direct control over the affairs of Catalunya (Catalonia).
A province of 7.5 million people in the northeast of Spain, Catalonia's political autonomy has been exercised, along with others in Spain, since 1978, when the Statute of Autonomy (renewed in 2006) also recognised the region’s nationality.
The immediate impact on tourism to the province has been marked - and highly costly to the local economy. A prolonged upheaval will severely aggravate that situation.
This is a modified version of a story which first appeared in BlueSwanDaily.com
Catalonia is a tourist Mecca, but tourists are fragile - and have options
Catalonia has became one of the most economically dynamic communities in Spain and its capital, Barcelona, one of the most visited by tourists of all European cities and the 12th most popular in the world. There were 18 million visitors to Catalonia in 2016, as many as there were international visitors to the whole of Canada.
This action, employing unprecedented constitutional powers and referred to in the media as "the nuclear option’" follows the “illegal” independence referendum held on 01-Oct-2017. Various polls held over the last decade suggested that over 90% of the regional population preferred Catalonia’s transformation into an independent State and despite attempts to prevent the referendum taking place that was the declared result, albeit on a low turnout prompted by several factors.
Regional government officials have vowed to resist the takeover and the imposition of elections, which is being described as a ‘coup d’état" by the Spanish government, which retorted by threatening to “discipline them”, prompting a declaration by one political party that Catalan citizens should engage in “massive civil disobedience”.
The war of words has multiplied with each passing day and with 0.5 million people – and potentially one million or more – frequently taking to the streets of Barcelona to protest, the prospect of matters suddenly escalating out of control is more than a possibility.
The blend of Catalan and Spanish flags is an uneasy one
The remainder of Spain is split over Catalonian independence (as are the Catalans themselves) though it is safe to say that as the referendum demonstrated the vast majority of Catalans favour it while a slightly smaller majority of Spaniards elsewhere are against it.
Independence can be infectious
If and when direct rule is imposed (and especially so if and when Catalonia actually declares independence), it will be hard to contain events to Catalonia and Madrid.
There are independence movements in several of Spain’s other autonomous regions, such as parts of Valencia (which includes the Costa Blanca, Alicante and Benidorm, Europe’s largest resort), the Balearic Islands (Mallorca, Menorca, Ibiza and Formentera), Andalusia (Malaga and the Costa del Sol) and Galicia in the northwest, where unification with Portugal is sought by some.
While there is no suggestion yet that it will do so, the Basque separatist movement could also be rejuvenated. The armed wing, ETA, which killed over 800 people during its almost six decade long fight for independence, finally laid down its arms as recently as 07-Apr-2017.
The nightmare scenario, and a highly unlikely one just yet, is of a return to civil war. But failure to learn from history has consequences. The Spanish Civil War (1936-1939) began as a result of the refusal of army officers to accept the jurisdiction of a government, something the army may very soon be asked to do again.
These are very different times, soothed to a large extent by the influence of a European community of nations over half a century; but there are many who have no recollection of any other system and it is easy to take peace and order for granted.
The European Union will not intervene. It has said it will not, and it has more than enough on its plate with Brexit, hardening attitudes in many countries in Eastern Europe and the fact that there are breakaway movements in many EU states. Other than to offer verbal support, it is unwilling to become involved.
Meanwhile, the separatist SNP (Scotland), Plaid Cymru (Wales) and Sinn Féin (Ireland) all sent observers to the referendum. There is plenty of fuel for the fire and hotheaded behaviour at the provincial level will be encouraged by many external would-be autonomists.
The tourism impact has been limited until now - but it is growing
So far there has been a smallish but noticeable impact on tourism, most of it prompted by the regular demonstrations that are televised worldwide and by the sometime brutality of the police when they attempted to halt the referendum, reportedly hospitalising over 800 people, to the universal condemnation of foreign politicians.
The drop is noticeable particularly because, by contrast, there had been only a very small negative tourist reaction to the terrorist attack which took place in Barcelona and Cambrils on 17-Aug-2017.
In the first two weeks following the referendum both foreign tourist and air travel bookings to Catalonia slumped by 15-20%, equivalent to the loss of over EUR1 billion in tourism revenues. Some vacation trips have been redirected from Barcelona to Madrid.
In some ways, that might be a blessing in disguise, at least in the short term. Barcelona was wilting under the weight of more tourists than it could handle in the high season. And there was already a backlash against tourism from the Catalans themselves.
On the other hand there are 400,000 people working in the Catalonian tourism industry and a 20-30% reduction in tourist numbers is anticipated by the Spanish tourist industry to the end of the year - even if the impasse that exists now does not escalate.
There are other potential losers. Expats (there are still 300,000 from the UK alone) may decide that now is the time to return home. That would be a one-off fillip for the airlines but a permanent loss thereafter as both their travel and those of their friends and relatives ends.
Many domestic and international airlines are heavily committed to operations in and out of Spain. And the international airlines have few other options apart from Portugal now that North African, Turkish and Egyptian resorts are still largely considered off limits in many cases, owing to the terrorist threat.
Tourism has been vital to Spain's recovery post-GFC
Tourism is responsible for 14% of Spain’s GDP and has helped the economy recovery from over five years of recession, with growth of 3.2% in each of the last two years. That has already been revised down to 2.8% and further reductions are anticipated. They could become even bigger reductions.
Vueling, whose main base is at Barcelona El Prat Airport, is most at risk from continued or escalated unrest. The situation at the airport has been aggravated by Ryanair's forced cancellation of a number of flights to Spain, caused by its pilot shortage.
Many commercial organisations have threatened to leave Barcelona and the wider province and some have done so already, which impact on business travel. Some banks have already moved their head office operations outside Catalonia.
A negative impact on smaller airports would hurt local economies
Then there is the impact on AENA’s smaller airports, which its partial privatisation, and the legal decree that permitted it, was supposed to protect.
In the event that tourism deteriorates, resources would inevitably be pumped into propping up the major airports first.
AENA’s traffic figures for October, which will probably be published in the first or second week of November, will be awaited with great interest.
Tourist flows around Europe have been destabilised greatly in recent years, as a result of terrorism fears or, as in the case of Turkey, government upheavals. One result has been to illustrate clearly just how flexible and mobile airlines and tour operators are when any upheaval occurs. Even short term, relatively small drops in tourist flows can have serious economic impacts on many marginal operations.
The current situation in Catalonia has escalated to such a level that a short term return to normality is unlikely. In those circumstances there will be many affected tourism operations, including airlines, which will opt to redirect their focus for 2018 towards other markets. That would tend to lock in significant future losses for the province's tourism, regardless of how quickly the troubles are resolved.
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