[Business] News Business bracing itself against the pandemic Swedish Resilience Put to The Test
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By Peter Berlin
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Gotland caught in Catch-22
he picturesque and archeologically important Swedish island of Gotland featured as the main theme in the April issue of Swedish Press. At the time of writing in early March, the coronavirus had not yet triggered lockdown measures across the globe, and the business prospects for the spring/summer season looked as bright as ever for Gotland. But in just one month, the situation has changed dramatically for the island whose economy is highly dependent on tourism. Some of the main attractions are the Almedalen Week and the Medieval Week, both of which might be postponed. These and other theme events help attract around 100,000 visitors every summer who spend generously on hotel accommodation, restaurants, arts and crafts, and general shopping. Many mainland Swedes own summer residences on Gotland and do their share to make the local economy thrive. As the COVID-19 pandemic takes hold in Sweden, Gotland has so far been largely spared. By April 7, only 13 cases of contamination had been confirmed. The island’s 60,000 permanent residents are now torn between keeping it that way, or relying on the usual influx of visitors to stay afloat economically. Reluctantly, it seems, health authority leaders in Gotland have sided with their Swedish mainland colleagues in urging the whole country to refrain from travelling anywhere for the time being. As a result, 85 percent of all Easter bookings
Town Wall in Visby, Gotland. Photo: Medeltidsveckan på Gotland AB
in Gotland have been cancelled, and the prospects for the summer holidays remain in doubt. In addition to the tourist sector, Gotland does have a network of small manufacturing and agricultural enterprises. COVID-19 has prompted business owners and community leaders to brainstorm about how to change the island’s socio-economic fabric to make it less dependent on tourism and instead become a Baltic hub of technological and ecological innovation. A daunting task in the best of times, but not beyond the realm of possibility for the intrepid Gotlanders.
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BRA on the brink?
iting dwindling ticket sales due to COVID-19, the Swedish regional airline BRA suspended all flights in the middle of March and furloughed its 600 staff. On April 6, the company announced that it had filed for “reconstruction” in the Swedish courts – a procedure similar to Chapter 11 in the United States. Prior to the outbreak of the pandemic, the airline provided 30 percent of domestic flights in Sweden.
IKEA closes 300 stores
he spread of the coronavirus has prompted the Swedish home furnishing giant to temporarily close 300 of its 434 stores worldwide, including the ones in North America. In Sweden, Norway, Finland, Japan, South Korea, China and Australia the stores do continue to operate normally, albeit with a sharply reduced customer base. Many of the 211,000 employees have been furloughed, while others are being re-trained to work in the company’s online business sector. IKEA’s top management hope to be able to re-open the closed stores gradually, beginning in the fall of 2020.
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A fresh breeze in the doldrums
t is not surprising that the hotel business around the world is struggling as governments impose ever more severe travel restrictions. In Sweden, the ubiquitous Scandic hotels are familiar to many foreign visitors. The hotel chain owns 280 establishments in six European countries, most of them in Scandinavia. Even though the Swedish implementation of COVID-19 lockdown is seen as relaxed by many, the room occupancy in Scandic hotels is down to a mere 10 percent of capacity. As of April 9, more than half of the hotels had been closed and 80 percent of the staff laid off. Paradoxically, that same day the company’s shares rose 30 percent on the stock market. The reason appears to be that investors have faith in the company’s future prospects once the pandemic crisis is over, and the share price is still viewed as good value following a dramatic slump in February.
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Swedish Press | May 2020 9
