In St Mark’s Square last week, tables and chairs outside the famed Caffè Florian remained empty, with the few tourists spoiled for space as they posed for selfies. More white medical masks than carnival masks could be seen. Rows of empty gondolas seemed to rock impatiently.

After Venice cancelled most of its annual celebrations amid Italy’s attempts to contain Europe’s worst coronavirus outbreak, most visitors ran for the hills, leaving the lagoon city a virtual ghost town.

The Venetian tourism industry is still reeling after severe flooding in November left much of the city under water; now it has a very different kind of crisis to face. More than 800 cases of Covid-19 have been confirmed in Italy, and 29 people have died.

“We were waiting for the carnival to get the economy going again after the acqua alta, but now we have a new problem,” said Sabrina, a worker at fashion store Sartoria dei Dogi.

The floods reduced turnover in Venice by 40% in the final quarter of last year, according to local government figures, and estimates suggest the virus will cause a downturn of 30-40% in this quarter.

More than 40% of hotel bookings have been cancelled, according to the Venetian Hoteliers Association.

A restaurant at St. Mark’s Square. The city has few bookings for the usually busy Easter period. Photograph: Claudio Furlan/AP

“It’s completely dead: no one comes past, the streets are empty, and people are afraid,” said Paola Bertoldo, who sells her own Murano glass jewellery from a shop in the Santa Croce district. “I don’t know how we can manage this time. This is the last nail in the coffin.”

The entire economy has been affected, said Simone Venturini, city councillor for economic development. The real damage would be long-term, he said, with few bookings for the usually busy periods of Easter and the Biennale arts festival starting in May. “In a few weeks, we believe the virus will be a distant memory like Sars, but we need to get the message out that it’s business as normal.”

Venice, which receives 20-30 million holidaymakers a year, has a love-hate relationship with tourists. Overcrowding causes antagonism between those Venetians who make a living from tourism and those who feel suffocated. Some residents were finding the reduction in tourism liberating, said Jane Da Mosto, founder of the thinktank We Are Here Venice.

“Of course it’s terrible that livelihoods are being affected, but now people can breathe,” she said. “It’s like being on a crammed subway and then being able to read your book and stretch.”

As far as Da Mosto is concerned, the tourism timeout ought to be an opportunity to rethink and implement viral systemic changes, but it is unlikely to happen in a city where the needs of Venetians are ignored in favour of the tourism industry. “If this is a wake-up call,” she asked, “who is listening?”