The tourism sector in Catalonia is close to saturation after the strong recovery in recent months following the pandemic. It is one of the future risks for the community that BBVA Research identified in its latest regional report published this Wednesday. "Taking into account that tourism is undergoing favorable dynamism, one of the biggest challenges for the region in the face of 2024 will be to be able to face capacity limitations," according to the report.
The chief economist for Spain, Miguel Cardoso, qualified at a press conference in Barcelona that in the community the arrival of foreign tourists is "hitting the ceiling", as evidenced by the data that employment is already at levels "similar to or higher than those of 2019”. And in parallel, it is "unlikely" that the sector has made significant investments to increase the capacity of tourist accommodation since before the covid. While in Catalonia the occupancy rate is more than 1% higher than before the pandemic, in other communities it is below it, such as Madrid, the Basque Country, Cantabria or Andalusia.
Precisely the "limitations" of capacity to attract more tourists may cause the Catalan economy to grow less in 2024 than other communities, such as Madrid, which are less dependent on tourism. The consequence is that the gap between the Madrid and Catalan economies will widen this year and next. Cardoso said that Madrid's greater dynamism is due "to the lower weight of foreign tourism in the capital and the good performance of the economy's services," especially professionals.
The forecasts for this year are a GDP growth of 2.6% for Catalonia and 3.0% for Madrid. Next year the estimate is 2.0% and 2.3% respectively. Despite the lower dynamism compared to Madrid, Catalonia in the period analyzed will grow more than the whole of Spain.
The good evolution of the tourism sector in Catalonia is also shown in the data on spending with foreign cards in the community in the second quarter of the year, when it grew by 20% compared to the same period in 2019, according to data from the entity.
As for employment, estimates call for the creation of 180,000 jobs -some 90,000 each year- to leave the unemployment rate around 8% at the end of 2024. Currently, unemployment is 10.4%.
Although Catalonia and Spain as a whole have avoided falling into recession and the start of 2023 has been good, the economist warned that an environment of greater slowdown is expected in the second part of the year. “It's hard to think that this rate of growth can be sustainable,” he said. To justify the downward revision, the BBVA Research report also cites factors such as a return to a contractive fiscal policy.
In the case of Catalonia, Cardoso warned that while the Generalitat's spending in terms of GDP remains at high levels (more than 16% of GDP), income has fallen to just over 15%. The deficit is expected to reach 1.5%.
