Was Sweden’s Covid-19 lockdown a gamble?

Sweden: In recent months, we have all to some extent become armchair epidemiologists, expressing sadness and anger in equal measure at the alarming mortality rates and stringency of lockdown policies around the world. And yet, as countries around Europe shut down their borders and hospitality establishments due to the Covid-19 outbreak, one country has gone it alone with its lockdown policy: Sweden.

The country has meandered from the path set out by its European counterparts and neighbours by adopting a lighter-touch approach to its lockdown policy, in apparent defiance to other EU countries who have adopted far stricter closure and social distancing measures. From its government’s viewpoint, there is minimal scientific basis for a nationwide shutdown that would instead threaten its economy for many years to come.

What lockdown measures has the Swedish government outlined?

Among the measures that the Swedish government has implemented have been the closure of senior high schools and banning gatherings of more than 50 people, while over-70s are advised to stay indoors, especially if they are experiencing possible Covid-related symptoms. Social distancing measures are relatively relaxed and people are being encouraged to work from home whenever possible: “advised” and “encouraged” being the operative words here, rather than “ordered”.

Sweden’s Foreign Ministry, meanwhile, currently advises against all non-essential overseas travel until 15 June, and that time period could yet be extended. Masks are also not compulsory and are only recommended for citizens if they are working with a sick patient.

Such methods rely heavily on the public’s ‘common sense behaviour’ to prevent further spread of the coronavirus, while ensuring that enough of the population becomes infected, to reduce the chances of a far worse second wave arriving in the winter.

This has prompted an ugly ideological confrontation over balancing economic health and prosperity with an already-high, and rising, death rate. The government is faced with not only “flattening the curve” but making life-and-death decisions as real people prematurely lose their lives.

The “herd immunity” notion has its share of critics and advocates, with the former fearing that the death count will escalate and overwhelm hospitals and the latter arguing that “draconian lockdown measures” cannot be “sustainable” and could unnecessarily harm the economy. One Swedish business leader, Jacob Wallenberg, advocated a compromise solution, urging authorities to take a broader “life vs life” approach that considers the economy as well as health, or risk social unrest.

In Swedish, the word lagom refers to “moderation” or doing “something just the right amount”. Some might say this aptly describes the government’s approach to lockdown.

Compare this to neighbouring Denmark and Norway, who committed to an early lockdown and it is evident that Sweden has taken a significant risk in its divergent approach — is it a calculated risk that it still believes could pay off though? Those countries quickly shut all hospitality establishments, restaurants, shops, cafes, schools and borders — Sweden closed none of those.

The recent statistics released by the WHO [World Health Organisation] make for sobering reading for the Swedes.

Until recently, the country had the highest death per capita in the world due to the Covid-19 outbreak and it now ranks just behind the UK in that category as of 25 May. This refers to the rate which is calculated by dividing the absolute number of deaths by the number in the population at the midpoint of the time interval [usually a year].

At the time of writing, from a population of 10,093,917 people, Sweden had 37,452 positive Covid-19 cases, 4395 recorded deaths attributed to the virus and 4971 recoveries, according to Worldometer.

At first glance, the numbers do not look totally out of sync with other countries. However, as we delve further into the figures, the situation appears increasingly deeply concerning, raising serious questions over whether Sweden has implemented the best possible prevention policies in retrospect.

Over the seven-day period leading up to 29 May, Sweden had the highest deaths per capita of 5.59 deaths per million people on a rolling seven-day average, much higher than neighbours, Denmark and Norway. That rate is 11 times higher than the world average of 0.49 deaths for every million people over the same period.

The figures are startling but nor are they confined to Sweden alone.

Early on, Sweden was held aloft as a shining example in addressing the outbreak while still maintaining some semblance of ‘normal’ life — whatever that now resembles. One headline in the right-wing British publication, The Spectator, read at the time: “Sweden has pioneered an alternative to lockdown — and it works”.

Some people viewed Sweden as an early poster boy for seemingly containing the virus as the public health agency retained widespread national support, however critics say it was simply a matter of the government and opposition playing down the severity of the virus and leaving the agency to handle the pandemic by itself.

Doubt remain over whether this course was the best action to take in Sweden’s interests.

While the short-term rental and wider hospitality asset classes have been hard hit across the world, how have those industries been affected in Sweden? And is there a correlation between adopting less stringent lockdown measures and economic health?

Interest in holiday homes

One short-term rental trend that is emerging from the crisis in Sweden is an uptick in domestic travel or staycations, known as hemester in Swedish, as the population converge on the countryside to shield themselves away during lockdown.

With non-essential overseas travel effectively banned by the national government until at least 15 June and the likes of Denmark and Norway temporarily refusing to accept Swedish travellers across its borders, booking searches for holiday homes in drivable locations has surged.

In Sweden, 85 per cent of the population lives in cities, 15 per cent were born in another country and one in five children has a family with roots in another country. The capital city of Stockholm is emblematic of this multiculturalism, spread across a Baltic Sea archipelago of fourteen islands and connected by 57 bridges, and it is easy to see where they get their appetite for travelling.

Pontus Kopparberg of Residence, Christie’s International Realty’s Swedish affiliate, told The Telegraph: “Demand for holiday homes is really good. Many Swedes have summer houses in France and Spain and this year they won’t be able to visit,” said Mr Kopparberg. Instead, they are looking at home, and as a result prices for country homes near Stockholm have jumped by 5 to 10pc, he said.

This phenomenon is driven by the fact that many Swedish nationals have access to a summer cabin, or sommarstuga, through friends or family, so it is quite common for groups to rent out such accommodation for a short-term or extended stay basis if they so wish.

A number of other domestic businesses and organisations in the travel sector are already seeing an upsurge in traffic and bookings since the outbreak of the coronavirus:

• Several municipalities, such as Kungsbacka and Lekeberg, Örebro, have begun investing in campaigns and initiatives designed to entice locals to explore their own communities rather than venturing far elsewhere in the country. The economic head of Kungsbacka, Elinor Filipson recently told thelocal.se: “It’s likely that people will be at home a lot this summer, so we are showcasing what you can do at home in Kungsbacka.”
• The Swedish Tourist Association [Svenska Turistföreningen] has announced that it is planning to re-open its mountain resorts from the middle of June, but has made changes to contain the spread of the outbreak. The company owns 44 cabins along hiking trails in northern Sweden which will open in the next fortnight, but those in the Kvikkjokk stretch [Sitojaure, Aktse, Pårte], are scheduled for re-opening early next month.
• Property management agencies Stugknuten and Novasol have seen a sharp rise in people in Sweden booking their properties during the summer months this year. The former said that traffic to its website had shot up by 50 per cent compared to the same time last year, adding that Swedes made up the majority of those bookings.
• Another holiday accommodation provider, Stugsommar, revealed that the vast majority of international guests had opted to cancel or reschedule their trips with the company, however more Swedes than ever are expressing an interest in booking vacations in its locations.

The recovery of Sweden’s short-term rental tourism economy can be further illustrated through data, as AirDNA’s global data centre highlighted:

• Active properties in Sweden listed on Airbnb and Vrbo’s platforms peaked at 30,000 in late February, before a gradual decline ensued towards mid-May. As of 25 May, around 25,000 properties were listed across the two sites.
• New bookings have showed a drop and v-shaped rebound since the virus reached pandemic status in mid-March. Prior to the outbreak, 8,000 bookings had been made in Sweden and by early to mid-April, this had nosedived to around 3,000. Over the last month, bookings have returned closer to pre-pandemic levels around the 7,000 mark.
• The ADR [Average Daily Rate] in Sweden is set to reach its summer peak of $102 at the start of August, up $14 on the same stage in 2019.
• Occupancy is inevitably significantly lower than this time a year ago. By the week commencing 8 June, occupancy is projected to be at an average of 37.8 per cent [compared to 62.2 per cent a year earlier]. It is expected to reach its summer peak earlier than in previous years, with a pick up to 60.9 per cent by mid-July [compared to a 78.3 per cent peak in 2019], and this is set to tail off later in the summer,, with a predicted 32.6 per cent occupancy rate in mid-August, compared to 63.6 per cent in 2019.

After those revelations, another short-term rental data provider is predicting that the market recovery in Europe will take longer than in the United States, where some states are achieving near 100 per cent occupancy despite the lockdown, as we reported last week.

AllTheRooms reported that European occupancy is down 43.7 per cent year-on-year, however the Scandinavian countries are currently outperforming other significant markets in the continent. Airbnb occupancy in Denmark and Sweden has dropped by 21.3 per cent and 25.8 cent respectively year-on-year, whereas Germany [ –34.1 per cent], France [ –42.2 per cent], Spain [45 per cent] and Italy [51.9 per cent] have taken even harder hits.

How have businesses in Sweden’s short-term rental sector been affected by the lockdown policy?

ShortTermRentalz spoke to two Swedish companies in the short-term rental space to see how their businesses had been impacted by the Covid-19 outbreak and how they were reacting in order to wade their way through the pandemic.

Nils Mattisson, the CEO of Malmo-based computer software company Minut, which aims to help hosts be good neighbours by providing a number of smart home solutions for the short-term rental market, said:

“All of us in the short-term rental community have been adversely affected by the pandemic and Minut is no exception. We’ve seen an increased interest from hosts in using Minut to monitor their vacant properties from the safety of their own homes. Since Minut serves the dual function of an alarm system and noise monitoring in one device, our customers benefit both when guest are present and in times of low occupancy, so thankfully we’ve managed to stay relevant even in the absence of travel.

“We felt it [social distancing measures] was the right thing to do even if the government didn’t mandate it. In Sweden, we’re in principle free to continue running the business as usual but it’s recommended that we limit travel and encourage social distancing. We made the decision to close our offices in Sweden and in the UK in March and everyone on the team started working remotely. We’ve always been a very international company with team members spread across the world, so the transition to a fully remote workforce was less dramatic than it could have been. Some days it feels like productivity actually increased from these measures!

“In the immediate aftermath of the lockdowns worldwide we saw that Minut devices were increasingly used as alarm systems to monitor vacant properties. Some larger property managers also seem to have used downtime to make upgrades and install new systems to be ready for when guests return.

“In the past couple of weeks, we’re also starting to see signs of a recovery, particularly in markets that are a bit ahead of Western Europe and America. That’s quite encouraging to us. While we have no illusions about travel coming back immediately when the lockdowns lift, it’s clear to us that people have been longing to experience new places and made plans while they’ve been stuck at home. The short-term rental community is more agile than the hotel industry and could very well benefit from the recovery faster,” he added.

Dominic Bowen, director at Stockholm-based Airbnb co-hosting company SwedBNB, said that while his company had been impacted by the coronavirus, it had made provisions to cater to its guests and help it emerge on the other side of this crisis.

He said: “We, like the entire travel, accommodation, and hospitality industry around the world have been negatively affected by Covid-19 and the associated travel restrictions. If people stop travelling for business or pleasure, they don’t need somewhere to stay.

“We have however pivoted towards attracting guests who need temporary accommodation whilst distancing from family, or waiting to travel home. We saw about 80 percent of our bookings cancelled in March and another ten per cent in April. This will be a financially challenging year for nearly everyone. It has not been easy, but we will get through this.

“Social distancing and safe public health practices are important to us, our partners, and prospective guests. All of our properties have remote check in that do not require any face-to-face interaction. We appreciate the interaction with guests and during times when we cannot meet our guests in person, we make sure they know we are near by via whatever mobile application suits them.

“SwedBNB has also facilitated training for our cleaning partners on correct use of personal protective equipment, proper disinfection procedures, and safe cleaning practices. This has given our cleaners, guests, and property owners an extra level of comfort during these uncertain times.

“We have also adapted our management processes. For example, instead of following up on cleaning during the last hour of a property cleaning, we will follow up the following day to avoid face to face time with cleaners and to ensure there is sufficient space and time between outgoing guests, cleaners, and incoming guests.”

Bowen expressed solidarity with the rest of the short-term rental community and said he believed it would lead to increased professionalisation within the industry.

He said: “A really positive trend that we have seen at SwedBNB from our partners and property owners is the acceptance of lower financial interests in return for community solidarity. Once inflexible refund policies, and minimum nightly rates, have been readily adjusted to help people out. I think there has been a real recognition that we are all in this crisis together and together we will all fair better.

“Another trend we suspect and hope will emerge is the increasing professionalisation of the short-term rental industry. Covid has affected a lot of property management companies and I suspect those with the most robust systems, best partnership management process and robust guest communications, will be best placed once the market returns to a new normal,” he added.

At the same time, Sweden’s refusal to completely shut its borders and services has attracted fierce criticism in some quarters.

Has Sweden’s “coronavirus experiment well and truly failed”?

Writing in a Wired piece entitled, “Sweden’s coronavirus experiment has well and truly failed”, culture editor Amit Katwala collated a number of views that were damning about Sweden’s relaxed measures.

Katwala quoted virologist and author, Lena Einhorn, herself a vocal critic of Sweden’s approach, who attributed the spread of the virus to the traditional “sports vacation” at the end of February, when thousands of Swedes flock to the Alps to ski. This, according to Einhorn, coincided with a sudden flow of positive Covid-19 cases in Northern Italy, and Sweden’s mistake was not introducing a requirement for those returning to self-isolate.

Einhorn laid the blame at the door of the Swedish Public Health Agency for failing to prepare sufficient testing capacity and personal protective equipment, including masks, for the most vulnerable members of society.

Lund University epidemiologist Paul Franks concurred, saying that Sweden “hadn’t changed very much at all”, accusing the government and opposition of being too willing to let the public health agency handle decisions to contain the outbreak.

Franks added: “I don’t think there’s any doubt that if we’d taken Norway’s approach, we’d have fewer deaths,” Franks says.

Countries that instituted a lockdown have typically seen a “bell-shaped” epidemic curve, with a peak preceding a steady decline, whereas Sweden’s curve tailed off more gradually, leading to a more sustained daily death toll over time.

What does Sweden’s Public Health Agency say?

Eminent WHO virologist Johan Giesecke, who has headed up Sweden’s lockdown policy, conceded mistakes have been made in an interview with The Guardian, particularly in the wake of a spate of deaths in care homes and among the older generation. He admitted Covid-19 was a “tsunami sweeping the world” and the virus would be difficult to control whatever policy had been adopted.

However, his protégé, Anders Tegnell, has been much more vehement throughout the pandemic that social distancing and avoiding crowds is sufficient to limit the spread of the coronavirus, while a vaccine seems some way off from being created. Dr Tegnell’s team used simulations which anticipated a more limited impact of the virus in relation to population size as other studies had found, including a major report released by Imperial College in London.

The Swedish Public Health Agency pushed for less strict social distancing measures than those seen elsewhere in other countries so that they could be maintained over a longer period of time and because it believed a large proportion of cases would only result in mild infections. It has denied its overall goal was to reach “herd immunity”.

Tegnell’s stance has garnered significant public support as well: according to one recent study, 73 per cent of Sweden’s population said they supported the country’s lockdown policy.

The Guardian‘s Simon Jenkins added his voice supporting Sweden’s lockdown, saying that neither its “healthcare system nor economy had collapsed” and no correlation between fatalities and lockdown stringency has been found.

As the United Nations estimates that the world could lose four years of growth worth $8.5 trillion, some say that the indirect economic consequences triggered by Covid-19 could lead to even steeper mortality rates.

But equally, how can economic health be deemed a barometer for success when so many people have died and thousands more have lost loved ones to this virus?

Let us just consider that Sweden has had the highest number of deaths per capita in the world for seven days in the past fortnight. There is also no evidence to suggest that mass immunity has been achieved anywhere in the world.

Though Sweden’s economy has not been impacted as severely as some initially feared it might be, 4000+ deaths can hardly be deemed as a success in anyone’s eyes. We will never learn just how many lives have been cost by the government’s approach.

Sweden has taken an almighty gamble with its coronavirus response — only time will tell what the true human and economic cost of its government’s decision-making will be.

This story was originally posted on 1 June 2020, on ShortTermRentalz.com

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