Summer of stayca(u)tion

Written by Ralitsa Bobcheva, researcher

Edited by David Gaffney, partner

Good morning, The unmistakable scent of fig leaves on the sea breeze, the murmur of chatter made by crowds of distracted tourists, and an opportunistic seagull preying on the pancake in an unsuspecting child’s hand.

In many ways it is a typical summer seaside scene, but there is something slightly out of the ordinary about it.

Usually an indecipherable mishmash of several foreign languages, today the conversations and ecstatic shouts from the beach happen to be entirely in my native Bulgarian tongue.

While the hubbub follows me throughout the ancient coastal town of Sozopol, I cannot help but wonder: what does this post-lockdown influx of domestic vacationers mean for the local tourist industry and the town itself?

Given that international tourism is among the worst hit sectors by the Covid-19 pandemic, the rise in home tourists is welcome news for the industry. In fact, researchers have often turned a blind eye to the importance of domestic tourism, with the latest OECD survey estimating that more than 80% of the total number of tourists in countries the likes Germany, the US and the UK are domestic visitors.

Shorter travelling times and far less ‘faff’ generally are two undeniable advantages of holidaying in your own country. It can also be invaluable for socioeconomic reasons, in reducing tourism seasonality and bridging the gap between richer, metropolitan areas and poorer, more isolated regions within a country.

Sadly, however, it is not without its negative aspects. Towns like Sozopol are often ill-equipped from an infrastructure perspective to accommodate the vast number of vehicles that transport the saviours of the local tourism businesses to their door. Communities on the route of the ‘North Coast 500’ in Scotland have reported similar frustrations since travellers began arriving in large numbers.

Not to mention the impact of those additional vehicles on levels of greenhouse emissions. In June, scientists were shocked to discover how sharply and quickly greenhouse emissions rebounded to pre-lockdown levels once states began relaxing their travel restrictions. The good news here in Europe is that one of the few travel alternatives – the railway – has not yet reached the end of the line. Recent months of relaxed lockdown measures across the continent have sparked a renewed interest in railway journeys, with governments like Sweden’s investing heavily in new railway connections across the country.

Indeed, with no vaccine for Covid-19 in close sight, the importance of domestic tourism is set to continue to grow. Equally important, however, is to ensure that the staycation revival does not happen at the expense of the natural world, or the communities for whom everyone else’s idyllic holiday hideaway is home.

News

Aberdeen was placed back into partial lockdown last night due to a cluster of more than 50 coronavirus cases having been detected in the city. All pubs, bars and restaurants were ordered to close on Wednesday evening while residents have been told not to travel more than five miles for leisure purposes or go into each other’s houses. The local measures will be reviewed next Wednesday and may be extended if necessary.

Twitter briefly banned Donald Trump’s campaign from tweeting yesterday, in the most radical move taken against the US president by any social network so far. The offending tweet featured a video clip from a TV interview in which Trump claimed that children are “almost immune” from Covid-19. This came just a few hours after Facebook removed a post from Trump’s profile featuring the same interview, over misinformation claims.

The US secretary of health and human services, Alex Azar, will visit Taiwan in the coming days after 41 years of broken diplomatic ties. Azar, the most senior US cabinet official, announced his trip on Twitter, amidst growing pressure from the Trump administration to adopt a tougher approach to China. The move reflects growing support for the country in Washington, in the face of growing Chinese aggression. (£)

Business and economy

The number of UK high street shoppers fell by 40% in July compared with the same month a year ago, according to data released by Springboard, a company that tracks footfall at consumer hotspots. Visitors continued to stay away from town and city centres despite the reopening of non-essential shops, pubs and restaurants in June. This partially owes to increased spending online, along with a lack of tourists from overseas and fewer office workers venturing into town and city centres.

Amazon has been accused of “opting out” of fair taxes by passing on the costs of a new tax on tech giants to its suppliers, after telling UK companies using its services that it will increase its fees by two per cent. The digital services tax was introduced in April and will be paid only by companies with revenues from digital activities of more than £500 million globally and £25 million in the UK. (£)

UK and Japan will attempt to secure a post-Brexit free trade agreement today. While the UK hopes for better access for services, Tokyo is holding out for cuts in tariffs on Japanese car exports. A trade deal between the two countries could boost British GDP by 0.07%. (£)

Columns of note

Writing in The Guardian, Jennifer Schaffer questions the societal shift from a collective to individualistic mindset after the end of lockdown. She brings to the fore the valuable lesson that we gained during the months of lockdown; that of interdependence.

In the Financial Times, Leo Lewis revisits the assertion first made in 2006 that “data is the new oil”. The issue, he argues, reached its climax last month when the US ordered China to close its consulate in Houston following claims that Chinese hackers are stealing US intellectual property. While the official explanation for the closure is that it was meant to protect American intellectual property, Lewis argues that the move was also a practical response to a commercially driven larceny.

Source: Telegraph

Markets

What happened yesterday?

Investors have been pushing stocks higher in recent days as pressure grows on Republicans and Democrats to resolve differences over a new US virus relief package.

At the close, London stocks finished higher, with the FTSE 100 ending the session up 1.14% at 6,104.72, and the FTSE 250 climbing 1.91% at 17,638.30.

US stocks also climbed on Wednesday after Walt Disney Co’s shares jumped 8.8%, to put it among the biggest boosts to the S&P 500 and Dow. The Dow Jones Industrial Average gained 1.39% to 27,201.52 and the S&P 500 went up 0.64% to 3,327.77.

And finally, gold continued its climb to the record $2,000 an ounce as investors sought an alternative to low bond yields.

In company news:

WH Smith is axing up to 1,500 jobs – around 11% of its workforce – after demand has plummeted in its branches in airports and train stations. The firm expects to report a loss of £70-75m for the year to the end of August as a result of the coronavirus outbreak.

Metro Bank shares tumbled more than 13.5% yesterday, after the bank reported a £240m loss in the first half of the year, down from a £3.4m profit compared to the previous year.

IP Group revealed record cash realisations in its half-year results yesterday and a number of positive developments in its portfolio of cutting-edge companies operating in the life sciences, technology and cleantech sectors. The firm’s most valuable holding, Oxford Nanopore Technologies, announced a deal with the UK government on Monday to roll-out Covid-19 tests in healthcare settings from next week.

What's happening today?

Finals

Induction Heal.

Joules Grp

Interims

Aib Group

Evraz

Hammerson

Intelligent Ultrasound

Mondi

Phoenix Group Holdings

Savills

Serco

Spirent

AGMs

D4t4 Solutions

De La Rue

Dekel Agri

Investec

Minoan

Naked Wine

UK Economic Announcements

(07:00) BoE Interest Rate Decision

(08:30) Halifax House Price Index

Int Economic Announcements

(07:00) Factory Orders (GER)

(07:00) Industrial Production (GER)

(09:30) PMI Construction

(13:30) Continuing Claims (US)

(13:30) Initial Jobless Claims (US)

Did you know?

Some ophiuroids, or 'Brittle Stars' can see with their entire body. The starfish-like creature with no eyes can see by using light sensors on its body to create a pixelated image of its surroundings.

Parliamentary highlights

House of Commons

In recess until 1 September 2020

House of Lords

In recess until 2 September 2020

Scottish Parliament

In recess until 10 August