A room with a view • Focus: Tourist arrivals

Tourism has been the main engine behind Spain’s economic recovery. A pragmatic approach is necessary if the country wants to continue reaping similar rewards in the future.

IN THE 1960S, under the dictator Francisco Franco, Spain helped invent what we think today of as the tourism industry by advertising to the world its cheap, high-quality wine and olive oil, pleasant climate, pristine shorelines, vast cultural heritage, and gastronomic richness. In the following years and decades, the country boomed as a mass tourism destination, becoming the go-to destination for low- and middle-income travelers from across Europe and beyond.

Fast forward to 2018, a year that saw Spain beat its record for foreign tourist arrivals for the sixth year in a row. Records aside, data from the last 10 years shows that the tourism industry has been in a strong uptrend for much longer. The number of foreign tourists increased from 52.7 million in 2010 to 82.8 million in 2018, according to the National Statistics Institute (INE). Indeed, after years of posting record-breaking tourist arrival numbers, Spain managed in 2017 to overtake the US as the second most-visited country in the world.

The sector’s direct and indirect contribution to GDP was close to 15% or EUR178 billion in 2018.

In fact, according to a report by the World Travel & Tourism Council (WTTC), the travel and tourism sector contributed one out of every seven euros in the economy in 2018. Looking forward to 2019, the report predicts the sector will grow by 2.8%, above the European average of 2.5%.

Equally significant, the sector has of late overtaken construction as the top employer, according to the Spanish Institute of Tourism (Turespaña). A survey by Turespeña further revealed that 2.65 million people—2.17 million staff workers and 483,861 private contractors—were employed in the sector in 2018, up from 2.2 million in 2014. That confirms the steady rise of demand for workers in the tourism sector. In total, 13.7% of Spain’s 19.34-million working population is employed by the tourism sector. That is the magnitude of the tourism boom. Overall, 75.5% of the working population is currently employed in a service-related industry.

But the tourism sector’s marvelous run might end, or at least come to a halt soon, as the YoY growth rate for international arrivals has slowed

down considerably, from 8.7% in 2017 to 1.1% in 2018. However, at the same time, average daily spending by individual tourists grew 7.4% YoY. Although these numbers fall in line with the government’s aim to attract high-spending tourists and put a brake on big arrivals numbers to reduce strain on public services and curb anti-tourist sentiment, the outlook in the sector is turning gloomy. This is thanks to a variety of factors, in particular Spain’s over reliance on its three biggest tourist markets, namely the UK, Germany, and France. There is also renewed competition from destinations such as Greece, Egypt, Tunisia, and Turkey. Climate-change-enhanced heatwaves, like the one that struck in summer 2019, also pose a headwind to further growth.

“The public sector must focus its efforts on attracting tourists from more remote destinations, rather than those proximate to Spain. We have traditionally received many tourists from France, Italy, and the UK, but right now we have to focus on attracting tourists from the US and Asia, which are the segments likely to grow the most in the near future,” Amancio López, President & Founder of Grupo Hotusa, told TBY. “We also need to preserve our historic heritage in less known destinations and adopt a wider approach to promote tourism in other regions of Spain to tap its many destinations.”

As for climate change, exceptionally warm weather across Europe is making it unnecessary to fly to Spain to enjoy the beach, indicating that rising temperatures and strong winds are already having an impact on the Spanish tourism sector. Prime Minister Pedro Sanchez has been attending climate protection conferences, making it clear that Spain has to participate in Europe’s conversation over a rapidly transforming planet. ✖