Several governments are trying a radical new method of reviving their tourism industries: paying subsidies directly to holidaymakers
VENETIANS HAVE long complained that a surfeit of tourists has turned their city into a historical Disneyland. As if to prove them right, in 2018 the city council erected turnstiles to control the 40m or so holidaymakers swarming in every year. In 2019 “La Serenissima” went a step further and announced plans to charge visitors coming through those gates up to €10 a day.
Governments have long sought to help the industry indirectly, with handouts for airlines, subsidies for airports and other infrastructure, or lower value-added tax rates for hotels and restaurants. Handing visitors cash or spending vouchers is a new departure for most, but the idea has caught on rapidly.
It is easy to see why politicians want to prop up the tourist trade. It is a big employer. Over the past five years, according to the World Travel and Tourism Council, an industry body, the sector created one in four net new jobs globally. Tiffany Misrahi of the WTTC calculates that if international travel falls by half this year, 121m jobs will be lost and global output worth $3.4trn forgone.
Despite their apparent political appeal, the subsidies are not proving universally popular. Some see them as unfair: wealthier folk are likelier than poorer ones to be able to take time off work and to have spare cash for holidays. To avoid subsidising the rich, schemes’ eligibility can be limited. In Italy, only households with incomes of under €40,000 a year qualify. In South Korea the government is paying extra “vacation bonuses” to employees of small firms who take time off.
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