Slovenian Tourism Board Expects at Least 60-70% Decline in Business in 2020

By , 14 Apr 2020, 11:04 AM Travel
Hard times ahead Hard times ahead Jedrt Jež Furlan, Twitter

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STA, 14 April 2020 - Tourism is among the industries hit particularly hard by coronavirus. Slovenia is in a precarious position. Not only is it next door to one of the main coronavirus hotspots in Europe, it also relies on foreign guests for three-quarters of arrivals. The Slovenian Tourist Board expects the sector to experience a 60-70% contraction this year.

Previous economic crises have been brutal on tourism, but the sector has been able to recover fairly quickly. The coronavirus pandemic is different.

"The virus has spread to all continents, it is present in all countries in Europe. The impact of the crisis on life, the economy, jobs and in particular tourism is more intensive than in previous crises," Slovenian Tourist Board (STO) director Maja Pak told the STA.

While the situation remains uncertain and it is difficult to gauge the impact of the pandemic on tourism, the Organisation for Economic Cooperation and Development estimated at the end of March that international travel would decline by 45% in the event strict lockdown measures last until June. If the recovery is pushed forward to autumn, the decline will be 70%.

The STO estimate is even more pessimistic: Pak expects a 60-70% contraction in demand if the relaxation of lockdown measures starts in June, if not, the figure is likely to be higher.

Maja Uran Maravić, an associate professor at the Faculty of Tourism Studies in Portorož, agrees with the estimate given the estimated 30% contraction in the first quarter compared to a year ago.

"The decline will probably be around 70% assuming hotels start opening at least by 1 June," she said.

After the sharp decline, the recovery is expected to be long. Pak expects it will take several years, depending on how successfully the virus is contained, when borders reopen, and when tourism providers are allowed to operate again.

A lot will also hinge on how successfully the tourism industry adapts to the "altered consumer behaviour and the new situation post-crisis", according to Pak.

"Distance, which will be the new standard for a long time, will affect revenue and slow the recovery."

Slovenia recorded 6.2 million tourist arrivals and 15.8 million nights last year. According to Tanja Mihalič, a Ljubljana School of Business and Economics professor who specialises in tourism, it may take until 2023 or 2024 before Slovenia returns to these levels.

It may take even longer before revenue from foreign guests returns to the level recorded last year, according to Mihalič, who noted that the situation might even escalate into a price war.

On the upside, Slovenia is relatively well accessible by car from the countries from which the majority of foreign guests come, and its seaside might benefit from the misfortune of major seaside destinations such as Italy or Spain.

Regardless of the pace of recovery, tourism is likely to be different than it was before the crisis, requiring far-reaching adjustments by players in the industry.

As Mihalič noted, the trends included smaller groups, a focus on hygiene, and greater demand for tourism products that involve less interaction between people. "Companies with automated receptions and services and card access to facilities and services will have an advantage," she said.

Pak highlighted Slovenia's established position on the market for green tourism and niche products, which she said was a great asset going into the recovery phase.

The STO is also counting on domestic guests, who accounted for roughly a quarter of all guests last year, with Pak noting than after past crises Slovenians tended to value the safety of spending holidays in their country. Moreover, it will take a while before global travel returns to pre-corona crisis levels.

However, Maravić says that there are simply too few domestic guests to offset the decline in foreign visitors. "But if even domestic guests do not show up, our tourism will be ravaged if the borders stay shut."

All our stories on coronavirus and Slovenia are here

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