Tourists: annoying but necessary for the economy

On the journey that goes from the statue of Columbus in Barcelona to Plaza Catalunya, Susanna (52 years old and from Texas) gets her first surprise with the city: "There are only tourists, where are the Barcelonans?" She comments that she has arrived on a Mediterranean cruise with her family and they only have a few hours to visit the Catalan capital, like the hundreds of passengers who accompany her on the ship and who have also headed up the Rambla.

Oliver Thansan
Oliver Thansan
08 July 2023 Saturday 04:20
8 Reads
Tourists: annoying but necessary for the economy

On the journey that goes from the statue of Columbus in Barcelona to Plaza Catalunya, Susanna (52 years old and from Texas) gets her first surprise with the city: "There are only tourists, where are the Barcelonans?" She comments that she has arrived on a Mediterranean cruise with her family and they only have a few hours to visit the Catalan capital, like the hundreds of passengers who accompany her on the ship and who have also headed up the Rambla. She has to make the most of time. She will buy souvenirs, she will try to eat paella and she will only see La Pedrera from the outside because she has not booked a ticket. "I didn't expect so many people."

It is one of the almost 30 million foreign tourists who have come to Spain to date. The crisis in the sector during the pandemic is now over and all analysts point to a record summer season in visitors and spending –see graph–. But while this explosive recovery in tourism has unleashed euphoria among companies in the industry, in the most saturated destinations complaints from neighbors and conflicts return. It has happened recently in Barcelona with the visits and massive parties in the Carmel bunkers, or in Malaga with the citizen movement that demands an end to tourist apartments in the center, where there are already more vacation rental homes (almost 4,780) than residents. registered.

The debate has been reopened on the channel this summer. Tourism is valued as one of the great economic engines of Spain and at the same time criticized for its low productivity and social and natural impact at a time of climate crisis. "If tourists stopped coming tomorrow, the economy would drop by 12%," says José Antonio Donaire, a professor at the University of Girona and a specialist in Tourism. Holiday activity in Spain reached a nominal 159,000 million euros in 2022, 1.4% higher than in 2019, with tourism explaining 61% of economic growth, indicates the situation report of the Exceltur business association referring to last year. According to this calculation, the weight in the Spanish economy is at the 12.2% to which Donaire refers.

The direct impact extends to different sectors. “Agri-food or commerce – continues the professor from the University of Girona – benefit greatly from tourist activity; to which must be added the opportunity cost, since tourism allows us to have a transport system that benefits the entire economic system”. He mentions the El Prat airport, the development of which would have been "unthinkable" without visitors. Its growth, in fact, accelerated after the 1992 Olympic Games, and contributes to the competitiveness of companies and universities – a UB study on the economic impact of the airport estimates its total contribution to the GDP of Catalonia at 6.8% in 2018–.

It is also a great generator of jobs, with a high labor intensity, stresses Josep Maria Raya, professor at Tecnocampus (Pompeu Fabra University) and Director of the Tourism Research Center of the Maresme University School . Employment in the sector has not stopped growing this year, in the heat of a demand that, for now, seems immune to the rise in rates and inflation. Social Security affiliates linked to tourist activities increased by 5.5% in May compared to the same month of the previous year and stood at 2,752,872. This is the best May in the historical series, according to data published by Turespaña. Thus, tourism employment already accounts for 13.3% of the total number of affiliates in all sectors. As a result of the labor reform, the temporary employment rate in this branch of activity fell by 8.8% last year, according to Exceltur.

But if you look closely at the characteristics of this job, problems appear, warns UAB professor Josep Oliver. Despite the positive effects of the labor reform, the discontinuous permanent contract continues to be the majority, which reduces income for workers. Salaries are also below the average salary in Spain. The average salary in the tourism and hospitality industry reaches 23,863 euros gross per year, a figure 7.88% higher than in 2021, but which is 4.7% below the average national salary, of 25,041 euros in 2022, indicates the tourism and hospitality salary report of the Turijobs employment platform.

Oliver also points out that, just as tourism creates jobs at full speed and has absorbed a large part of the workers expelled from construction after the housing bubble, it destroys them with the same ease. "We see unsound activity that generates downward pressure on the education system and contributes to perpetuating the current structure, with many university graduates at the top and another large group at the bottom without a school graduate," adds the economist.

In fact, the Mediterranean coast, the Balearic Islands and the Canary Islands account for 54% of the tourist accommodation offer on the market (2.8 million beds), as stated in the Municipal Atlas of the social contribution of tourism in Spain, by Exceltur. In fact, of the 500 main holiday destinations in the country, 251 are located on the coast and, of these, 193 are located on the Mediterranean fringe and in the archipelagos (see graph).

"In the short term, tourist activity provides advantages due to its power as an occupier and as a source of foreign exchange, but if we look at the medium term, it presents deficiencies that we must address, such as lower productivity or downward pressure on per inhabitant income," summarizes Oliver.

There are other derivatives of the utmost importance outside the workplace, highlights José Antonio Donaire. On the positive side of the balance, the global brand image, which can act as a magnet to attract investment or qualified professionals who want to settle here and generate business, as is the case with the startup ecosystem in Barcelona. On the negative side, the aforementioned conflicts with residents, life congestion in the main destinations, pressure on access to housing and more pollution and waste of natural resources. “International studies – Donaire comments to an example cut – indicate that high-end accommodation uses more water per guest than a mid-range one, while tourist activity produces four times more CO2 than the city of Barcelona alone”. The water restrictions that the Generalitat has applied in Catalonia due to the drought include the arrival of millions of visitors during these months, that is to say, that in the distribution of scarce water, not only residents are taken into account, but also tourists.

While the debate drags on, tourist activity grows unstoppable this summer. Miguel Cardoso, Chief Economist for Spain at BBVA Research, points out that the Spanish market is most likely reaching thresholds with which it will be difficult to grow in the number of visitors. However, tourist prices still have room to increase given the strength of demand. Although spending the summer in Spain is becoming more and more expensive, prices are still below other competing destinations such as Italy or France, he comments. “The foreign tourist is less affected by the rise in interest rates and inflation in transport, while the national tourist is choosing to stay in Spain to save”, he affirms. The phenomenon, he believes, should be used to raise the product and promote a more sustainable model.