Freelancers, coronavirus crisis and Spanish economy

The coronavirus has not only caused a serious health crisis, but is also having a significant impact on the Spanish economy. Since the state of alarm was decreed on March 13, thousands of self-employed workers and SMEs have been forced to temporarily paralyse their activity. This has affected all sectors, but especially tourism.

The coronavirus crisis and vacation rentals

In Spain, the tourism sector has a significant impact on GDP. Good proof of this is that in recent years the number of hotel beds and tourist apartments has multiplied. The latter have become a good business option for self-employed workers and small businesses that want to participate in the tourism sector but do not have the resources or sufficient knowledge to acquire and manage a hotel. The truth is that tourist apartments have worked very well, especially in large cities such as Madrid or Barcelona, to the point where stricter legislation has been necessary to regulate the proper coexistence between neighbours and tourists. It seemed that nothing could stop such a buoyant business, but Covid-19 has completely paralysed activity in the tourism sector

How to face the effects of coronavirus on the economy?

For some days now, measures and public aid have been adopted to minimize the damage to the Spanish economy caused by the confinement derived from the state of alarm. But it is clear that there are sectors that are being more affected than others. Self-employed and small businesses that develop their activity by renting tourist apartments know that the situation will take some time to return to normal.In this situation, those affected are already looking for alternatives and making a change to their business model. The number of tourist apartments that are now offered as long-term rentals is increasing, thus returning to the traditional rental market. For experts, this is a sign that professionals in the sector foresee that the tourism crisis will be long and will extend beyond the state of alarm, hence they are looking for other ways to maintain the profitability of their investment. However, the forecast is that this change of model is only temporary, and that when things get better, the number of tourist apartments will increase again, since for their owners they are more profitable than traditional rental properties.

Unemployment benefits for the self-employed

For the self-employed, the Government has provided an extraordinary benefit for cessation of activity, the so-called unemployment benefit for the self-employed. This aid aims to guarantee an income (at least 661 euros) to all those professionals who have had to stop their activity or have lost more than 75% of their turnover, so that they are not forced to close their business. In addition, they will not have to pay the fee. The Ministry has made available on its website a small guide on the measures adopted.

Aid for the self-employed in the tourism sector due to Coronavirus

The Government has decreed aid through ICO credits (Official Credit Institute), both for companies and for self-employed individuals, whose activity is framed within the tourism sector. In this way, any self-employed person whose activity is related to tourism, hospitality or transport will be able to opt for this aid.According to David Basilio, founder and director of operations at the consultancy Linkers , specialised in hospitality and tourism, the Government's commitment to this line is to assume 50% of the risk of default on the loan, delegating the other 50% to the entities. The ICO thus acts as a guarantor for 50% of the debt.

Will there be a moratorium on rent payments?

On the other hand, we must not lose sight of the fact that the possibility of establishing a moratorium on the payment of rents for those people who have seen their income reduced due to the crisis associated with the coronavirus is already being considered. A decision that could affect those who have changed their tourist apartments for rental housing.Despite the many changes that are taking place these days, we must not forget that the Spanish economy is highly based on tourism and that the forecast is that in a few months things will start to improve. In addition, once everything is over, people will be eager to travel and leave the house, so it is still a good idea to consider the option of entering fully into the world of tourist rental. In fact, now may be a good opportunity to start planning your new vacation rental business

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