The perfect storm has been unleashed for tourism businesses. The slowdown in the arrival of travelers (Spain could lose up to 64 million foreign tourists) and the collapse of profits (only IAG accumulates losses of 5,567 million between January and September 2020), now joins the closing of the bank credit tap.
In the ten months that have elapsed since the crisis, the large hotel chains and travel agencies have obtained the backing of ICO and SEPI to achieve liquidity and avoid the closure of their companies. In the first case there are the airline Volotea and the hotel company NH, which obtained financing with ICO endorsement for 150 and 225 million euros, respectively. In the second, Air Europa was rescued by SEPI for 475 million euros and Ávoris and Globalia have requested another 240 million to complete the merger of their travel agencies.
Below these operations, however, there are thousands of others that are being conditioned by the banks right now. This is reported by sources from a large tourist association, who assure that at least two of their partners have been denied the request for credit by the bank unless they sold assets as collateral. The reason given by the entities is that the deteriorating situation of tourism (Companies and analysts agree that it will not return to pre-crisis levels until 2023 or 2024) it toughens the risk analysis and makes it difficult to repay the credit, which is why they have justified the denial in which they had to provision the credit, considering it doubtful or granting it with a guarantee sale of assets.
Santander, BBVA, CaixaBank and Sabadell accumulate 75,000 million in tourism credit
And the first cases have already occurred. Selenta sold the Nobu hotel to the ASG fund for 100 million euros and has already put two other hotels on the market (Expo Hotel in Valencia and the Don Carlos hotel in Marbella) to gain liquidity. Balearic leisure mogul Bartolomé Cursach has put his entire hotel empire in the Balearic Islands up for sale for 120 million euros and the H10 chain is testing the market to sell assets in the Caribbean.
The tightening of access to credit is a cold water jug for those medium-sized companies, which do not have the size or the financial muscle to go to the SEPI or the ICO and who defend themselves arguing that the volume of bad credit in the sector is minimal. A corroborated thesis in the latest transparency report prepared by the EBA, in which the non-performing loan rate for tourism (the percentage of non-performing loans compared to the total granted) stood at 4% at the end of June 2020. Among the seven entities that have granted the most loans to transport, hotel, restaurant and leisure companies, there are 86,763 million12% of the 716,000 million euros of loans granted to non-financial entities.
The activity that generates the most defaults is leisure, above hotels and hospitality
And of those 86,763 million granted, only 3,511 million (4.04%) is delinquent. A still low rate, but one that could grow in 2021 given the worsening of the crisis and the third wave. By entities, the highest non-performing loan rate for tourism is accumulated by Bankia, with a percentage of 7.29%. More than half of the loans (3,842 million) are granted to transport companies, of which 327 million (8.51%) are doubtful. On the other side are CaixaBank or Bankinter, with delinquency levels close to 2%. CaixaBank has granted 13,445 million euros to tourism companies, of which only 284 million are classified as doubtful (2.1%).
In the latter entity, the high level of delinquency in leisure companies stands out, reaching 8.3%. A pattern that is repeated in the case of Bankinter, in which the delinquency rate is 2.05% (72 out of 3,496 million), with leisure companies as those with the worst payment behavior, since 4.1% of the 197 million granted are classified as delinquent.