Restarting tourism: Are we ready to travel?

The industry, as well as travelers, is placing its hopes on the progress made on the vaccination front to ensure a more lasting return to normal. A slow easing of restriction measures would support the accommodation industry by lifting mandatory restrictions on accommodation activities and facilitating intra-country and intra-European travel. Such actions would also propel the food service industry, cultural, and sports activities.

Based on the progress in mass vaccination, Allianz Research estimates that in the second quarter of 2021, France would register a growth in activity by 23 percent with domestic demand supporting domestic supply, while regions more exposed to international travel (Paris, for example) will not see a significant improvement before the end of the year.

Germany would recover by 18 percent in 2021 and is leading the vaccination race among continental European countries. In the coming quarters, it could benefit from a higher spending from locals, as it did in the summer of 2020.

The UK accommodation sector would benefit from the country's rapid pace of vaccination, with demand picking up firmly. The 2021 turnover would bounce back by 34 percent.

Italy reopened the economy in the first quarter of 2021 only to reinstate the restrictions again in March. The country could see a slower loosening of restrictions as it is comparatively late in the vaccination race, but would see the strongest rebound in 2021 (40 percent).

Spain stands out as the country that had the toughest restrictions in 2020 and is also most reliant on international travelers. With households earning a comparatively lower income, the domestic demand alone will not be able to account for a significant recovery in local activity. After seeing the steepest decline in activity in 2020, Spain would see an accommodation turnover grow by 30 percent in 2021.