If We Can’t Go to Spain, Greece Will Do Nicely

(Bloomberg Opinion) -- The European travel industry had a bad case of summertime sadness after the U.K. introduced restrictions last week on vacation getaways to Spain.

But EasyJet Plc provided reason to cheer up on Tuesday when it said some travelers were still determined to take their holidays despite the prospect of having to self-isolate for two weeks on their return.

In fact, with more people looking to fly over the summer than it had expected, the low-cost airline is adding flights through the end of September. It will operate at 40% of capacity in its fourth quarter, up from the 30% it had previously planned for.

Yes, EasyJet's new bookings to Spain fell sharply after the British government warned against non-essential travel to the country, and then extended the restrictions to the Canary and Balearic Islands. But a surprising number of passengers who'd already booked are still planning to head to the country, even if it means they have to quarantine when they get home. The same holds for Portugal. Faro, in the southern Algarve region, is one of EasyJet's most popular destinations this summer, despite a similar U.K. government warning for that country.

This is mildly encouraging for the European travel industry, stoking hopes that the summer of 2020 won't be a total washout. It may be evidence of people learning to live with the virus, and a sense of comfort about being able to practice social distancing at their destination. For many, isolation is also manageable because they've already been working from home. Some won't return to the office until at least the start of 2021 anyway.

There is clearly a post-lockdown desire to travel, despite the health risks, for a spot of summer sun. TUI AG, the world's biggest package-holiday company, has seen Brits switch their holidays from Spain to Greece. When governments advise consumers against all but essential travel, tour operators cancel flights and passengers are entitled to a refund. Airlines typically keep flying. As well as EasyJet, which is seeing high demand for travel to Turkey and Croatia, Ryanair Holdings Plc is operating flights to Spain normally.

There may also be some expectation that quarantine policies could change. Portugal is in talks with the U.K. to lift the restrictions. Britain has also been looking at ways to ease the Spanish rules.

Despite EasyJet's crumb of comfort, the medium-term outlook still remains highly uncertain for Europe's travel industry. Some consumers may still be unwilling to book a package tour, which usually involves staying in a hotel. So people's last-minute summer travel budgets may go to booking a flight and a holiday rental, such as those offered by Airbnb Inc., where they can keep their distance from other holidaymakers.

As I've written, the U.K.'s advice on Spain was brought in suddenly, rocking consumer confidence and creating confusion. Depending on how the situation evolves, there's a risk that other countries, such as Germany, introduce similar curbs or that other destinations will face restrictions. Germany is currently advising travelers to avoid the worst-affected areas in Spain.

Meanwhile, concerns about a potential second wave of the outbreak might dampen demand beyond the summer. Autumn and winter bookings were looking promising, but EasyJet said that while early signs were good for peak periods, such as Christmas, there was little visibility across the winter season as a whole.

It may be that desperate holidaymakers are taking advantage of what they perceive as a window before more travel bans or virus flare-ups. That doesn't bode well for demand further out. For now, beleaguered airlines and tour operators can enjoy some relief from their cruel summer.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Andrea Felsted is a Bloomberg Opinion columnist covering the consumer and retail industries. She previously worked at the Financial Times.

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