Eugene, in this world trying to recover from the pandemic, what is Domina’s situation?
Eugenio Preatoni: “We are fighting as always, tooth and nail! A bit like all players in the tourism industry, we are doing what we can to stay on our feet: we have drawn up a thorough assessment of our available liquidity, and based on that we have prepared a plan to minimize costs by carefully planning the investments that will be necessary for reopening, despite the fact that the current situation presents a 100 percent contraction in turnover.”
Have you ever experienced, from the perspective of a tourism entrepreneur, a time of crisis comparable to this one?
“Over the years, it has certainly happened other times that we have had to face critical situations-for example, in Sharm El Sheikh where for various reasons, real or psychological, we suffered a contracture in the past-but events similar to this such as to bring the world to a standstill and reduce turnover to zero, well… honestly, no, we have never faced any. The big difference, then, is that in past moments of crisis we knew that somehow we would get going again, that it was just a matter of time, whereas now there is nothing certain: we depend on decisions of people who, far from reality and sitting on their seats in Brussels, make decisions on matters they know nothing about.”
What do you mean by that?
“Who know nothing at all about the practical implications of the matters on which they decide and deliberate….
Think, for example, of the idea they had of flying a plane with one full seat and one empty seat: of course everyone was negative, including the airlines–it didn’t take a genius to figure out that you couldn’t fly that way.
Low-cost companies like Ryanair, with the prices they charge, how could they have flown with half-empty planes? And how could a state be expected to subsidize a group that starts empty flights? Which then I wonder, from an epidemiological and health point of view, what does distance change when you are sealed in a tight space ten thousand meters above the ground? If one sneezes, it still gets to you, even with half an empty plane!”
I put you in front of a blank sheet of paper: what will tourism look like from now on? Let’s imagine it together from the perspective of a “visionary entrepreneur” who wants to improve it.
“This question really opens up a world. We are experiencing a very complex situation that leads me to have virtually no confidence that our system will make sensible decisions, in particular I have no confidence that the right decisions will be made to revive the tourism sector or that choices will be made for the future in an organic way, because it is our system that is sick.
Let me explain: this is not just about tourism, we need to make a much broader argument. As far as I am concerned, I believe that our political class is not prepared to handle this kind of situation. Nor is it their fault: in modern history we have often heard the statement that “every people has the political class they deserve,” and nothing could be truer! We elected these people, so we citizens are the problem. The fact is that, for example, 2,500 years ago in the Athens of Pericles, citizens or politicians were in an absolute sense much more ignorant than contemporary ones, because obviously there was less knowledge and fewer discoveries at that time. But they were called upon to make decisions about things they knew, which were part of their daily background and which they could really understand.
Today the world goes too fast; it is impossible to be competent on every subject. Despite this, to say, we are called to vote on the nuclear referendum even though we are illiterate in physics, or asked for our opinion on constitutional reform when we do not even know the date of the unification of Italy.
It is clear that something in the system is not working, and it is a vicious circle: people are called upon to express opinions on issues about which they know nothing, they elect politicians who are not up to the task, and these then are forced to follow this demagogic system that is a representation of the degeneration of our democracy. Such an attitude is a disaster. Many complain that the lockdown choice was not made on Jan. 31, when the national emergency situation was called. But do they know why that decision was not made immediately?
Because if Conte had gone on television and said that we had to stay home from February 1, there would have been a popular uprising: people had not yet understood, and Conte, even if he had already known the seriousness of the situation, could not have afforded to make such an unpopular decision. What we would need today is a political class formed not by all-rounders, but by statesmen who can make an interdisciplinary synthesis of everyone’s views, then freely make the best decisions with respect to how to allocate the limited resources we have, without looking at polls.
But in reality this is not the case, because our politician has to submit to the opinion of the people and the directions of the expert of this or that.I am a fervent supporter of the scientific method, but it is clear that experts are also human beings, and each one of them looks at the world through his or her own point of view, thinking that the problem of his or her own field is more important than all the others.
Here, in this demagogic context I do not believe that one can be able to make sensible decisions. When you talk to me about how to revive the tourism sector in a structured way, I say there is no way to even try to do that.”
So let’s do this, I’ll give you a magic wand, at your total disposal. What would you do?
“Now you’re really putting me on the spot! Where to start … so … look, if I could, the first thing I would do would be to invest in the education sector, because I think at the end of the day our only hope is an informed electorate that can make better decisions than I’ve seen made in the last 30 years. As I mentioned to you earlier, our electorate does not realize what is going on and who they elect, and that is the downfall in our country. Then either we educate and make the people who vote knowledgeable-that is, the exact opposite of what is happening today-or we must perforce move toward a more elitist and less democratic system of government, making only the really competent people vote.
All the structural reforms that we have been discussing in Italy for thirty years-that of justice, that of labor… – will only be able to happen upon the occurrence of one of the two conditions said before, that is, either a different electoral base, or a different, educated, educated electoral base. So going back to your question, in my view only after we get the system back in place can we think of saying, “Now to boost tourism let’s do this.”
In an Italy, where it takes eight hours by train to go from Palermo to Catania, where there are such small roads on Lake Como that two minivans can’t pass, where there are four casino licenses-all four of them at a loss-what do you think you can propose? We are a country that now functions in reverse, and I think it is the natural consequence of our times: we are the generation that did not see war, that did not fight for democracy, that did not have to suffer. We are a decadent population. Look at the Chinese: on the first day of reopening they went to “reward” themselves for the hard time spent in lockdown by spending $2 million at Armani and Hermes. Why? Because they know that tomorrow they will gain twice as much, that they have opportunities to grow, to look to the future.
Here in Italy we fill our mouths with words about saving money, without realizing that in doing so we are dying. And there is nothing positive about that! Just as there is nothing more antithetical to capitalism-full of flaws, of course, but one that has brought billions of people out of misery in the last century and to this day is the best solution available to us-than saving: capitalism works if there is consumption, if there is spending, if people have a rosy vision of the future.
Take Americans: they always spend more than they have, but why? Because they are convinced that by giving themselves, by chasing the American dream, by working hard, they will earn more tomorrow and cover the debts they made to get a big car, a big house, the best university. It goes with a rosy vision, which is not there in Italy.
We are a hybrid, we are neither flesh nor fish, we cry misery when we have money, we criticize wealth but are jealous of it, we produce luxury but demonize it. In such a context, I find it hard to think that anyone could at some point take charge and say, “This is how it’s done now!” I don’t want to get too far off topic, but the problem here is much deeper than the tourism sector, and the Covid affair has only brought it out more blatantly: this country has been impoverishing itself for 20 years.”
What is the cause?
“Now you make me touch another key that will make me dislike you even more. Europe. In 1999, the average income of an Italian was 96 percent of that of a German, we had the same purchasing power, we were the largest manufacturing power, the fifth largest industrially. Today our income is 74 percent of that of a German, and the difference between the percentage before and now is like the difference between the modern era and the Paleolithic era. But the worst thing is that people don’t even realize it. Everything is relative, as Einstein teaches us, even wealth: in absolute terms, was the Sun King of France, who had no air conditioning or heating, no sewers, elevators, or automobile, and perhaps died of pneumonia at age 25 because there was no penicillin, or any modern man, even to say today’s factory worker, richer? The fact is that the worker does not compare himself to the man of two hundred years ago, he compares himself to the man who today has the 100-meter yacht or the private plane, and he feels like a failure. With implications that could be dramatic.
The origin of wars has always been economic: it is not true that the Crusades were religious wars, it is not true that the war between Athens and Troy was a war over a woman, there are always economic factors behind wars. And if you look at World War II, it becomes clear that the economic crisis was its incubator.
You asked me what our impoverishment stems from: the ill-advised choice in the late 1990s to take us to Europe, going the extra mile. That exchange rate between the lira and the euro was not the correct one, and everyone should have realized by now that we did not have a common fiscal policy.
An entire generation of Europeans was sacrificed on the ideal of a united Europe. It hasn’t helped, we’ve been impoverishing ourselves for 20 years, and it’s clear that this is not working: we should at this point have the ability and the courage to take one step back, and then maybe take three steps forward and really become the united Europe.
Europe, on paper, is a theoretically fantastic idea, the problem is that in the present day it collides with a reality that does not correspond to that idea. The political class, the media, all the major centers of interest, have succeeded in convincing the populous, that is, the electorate, otherwise. But simply because they all have a natural convergence of interests, starting with economic interests: do you see that no matter how bad the economy gets, finance and stock markets continue to hold? Because it is so obvious now that the liquidity injections made are not going to the real economy.
Finance lives in a world completely detached from the real world, and the big financial interest centers will continue to have a big payoff as long as this situation remains so. Look at the banks that don’t fail even when they fail, or the automakers–they are now at a level where they are no longer involved in the real economy. So is the political class, which obviously has every interest in not wanting to change the status quo: our technocrats have all been absorbed by some European commission, so it is clear that they did not come to serve national interests when they were called upon to serve as unelected prime ministers.
So I can also understand that the poor average voter thinks, “everybody tells me that we need to have more Europe, they’re going to be right,” but I also say, don’t you want to learn more, pick up a book, understand? How do you not ask questions and understand that one thing is linked to the other, that we are not able to do anything anymore?
The population must revolt, must refuse. I, frankly, who would like to be an entrepreneur, have been struggling for ten or twelve years, experiencing a bloodbath for every step forward that I conquer, and it is an untold struggle. And I also know that if I had been born twenty or thirty years earlier it would have been quite different, or if I had been born in China it would have been different. I know someone will say to me, “eh, good job … however, in China you would not have had freedom.” Then I would reply, yes I understand, we are great at preaching from our pulpit of moral superiority given to us by I don’t know who, but if you think about the health drama we have experienced recently, maybe we should stop preaching from this supposed plane of superiority and we should start dealing with the concrete things.”
“Like the engine of the world, that is, the economy.”
And, in your opinion, the pandemic and the lockdown, how did that affect the engine of the world, the economy, which is then also closely related to tourism?
“Look, I have a bad feeling: from the very first moment I thought that the damage caused to the economy with this “medicine,” that is, the lockdown, in the long run will prove to be greater than the damage the disease itself would have caused. Life has a definite economic value, someone has to say. The fact is that these are topics that are rejected, so everyone has locked themselves in without a moment’s thought.
But if at the end of the pandemic we find ourselves back in the days of bartering, with an economy practically killed, with no more money for research, with an inadequate number of beds for the homeless (consider that in April the poor in Italy practically doubled), and that people will die of new diseases because of it, will we still think it was worth it? I do not want to say that shutting ourselves in was wrong or right, however, I believe that by killing the economy, in the end, the damage will be worse than that of a pandemic. And in this way we will lose many more lives than because of the virus.”
These thoughts are very interesting, but now let’s focus on talking more strictly about tourism and Domina. Imagine that this virus disappears or becomes endemic, thus curable, in short, that the emergency passes or subsides: how is Coral Bay organizing itself? What do we tell readers about the vacations?
“At both Coral Bay in Sharm El Sheikh and Zagarella in Sicily-our two largest resorts-we have taken a whole series of actions to ensure social distancing. Tranquilizing people psychologically is what we are most concerned about, because from that point of view it will be difficult for many people to decide to start traveling again. That’s why we did random surveys among our trusted members to find out their willingness to travel, and I must say that in general I was very satisfied: only 15 percent of them are against the idea, 15 percent are undecided about what to do, but a good 70 percent are absolutely ready to go right away. In particular, it became clear that our members trust Domina very much, and this prompted us to put even more effort into preparing for a safe restart.
At Coral Bay, in particular, because of the huge spaces we can afford to give each of our guests a personal area on the beach-which we have reorganized as a large chessboard-and we have implemented a whole series of preventive measures, for example, at check in: we are the only resort that performs a check to make sure that arriving guests have no fever or other symptoms. We have also activated a thorough process of sanitizing the rooms, and in the buffet restaurants it is our staff, equipped with gloves and masks, who serve the courses. In this way, people do not serve themselves and no one can touch the food, ensuring maximum hygiene.
We are preparing for the new season by complying with Ministry of Health regulations, protecting the guest both health-wise and psychologically, because it will not be easy to return to normal overnight. It must be said that in Sharm we were, as it were, “broken in” during the quarantine period: in the resort we have a lot of Italians living there permanently, perhaps renting, and for them we created a happy and protected island. So much so that at Coral Bay the number of infections was zero, and that is precisely why we decided not to open to the local market, as Egypt is doing. We are making arrangements for the reopening of the international market, which will hopefully start again in July. As for Zagarella, on the other hand, where we reopened at the end of June, we will be targeting the Italian market, since fortunately movement between regions is allowed again.
Regarding security measures, we are planning to allow lodging in the 40 cottages in the park, where we will serve breakfast and a la carte meals, and in 80 rooms, reserving from the moment of arrival a private place for each guest both in the two swimming pools and at the beach: in this way 120 units will be available at the Zagarella instead of nearly 400, ensuring the security of social distancing and maximum privacy. Obviously, since this will result in a reduction in the capacity of the facility, we are arranging to provide a “right of first refusal” to Domina members, who will be able to book first, and then eventually open to the national market as well. On the international, frankly, I’m not counting on it at the moment.”
Eugenio Preatoni is the CEO of Domina, one of the most innovative Italian groups in the tourism industry (his father Ernesto created the famous Coral Bay in 1994, giving rise to the Sharm El Sheikh story). He holds a degree in economics from Bocconi University in Milan and speaks four languages. An expert in finance and management, he was also one of the stars of “Boss incognito,” a TV program aired on Rai Due in 2016.