Tourism accounted for a quarter of the jobs created since 2013 — but mass-tourism of this type brings its own problems.
By Don Quijones, Spain, UK, & Mexico, editor at WOLF STREET.
One of the main motors behind Spain’s recent economic recovery, foreign tourism, is beginning to splutter. After years of two-figure year-on-year growth, the number of foreign visitors to Spain in the first five months of 2018 grew by a paltry 2% (to 28.6 million tourists). During the same period last year, the year-on-year increase was 12%. More ominous still, the country’s two biggest tourist markets, Catalonia and the Canary Islands, actually saw visitor numbers fall from January to May for the first time since Spain’s tourist boom began.
This could spell trouble for Spain’s broader economy. The tourist industry provides around 13% of economic output. That’s two-and-a-half percentage points larger than the contribution of Spain’s construction sector at the peak of Spain’s mind boggling housing boom in 2007.
Tourism has played a vital role in Spain’s economic recovery, accounting for around a quarter of the new jobs created since 2013. The impact on Spain’s biggest tourist regions such as Catalonia, the Canary Islands, and the Balearic Islands has been even more pronounced, with over a third of the new jobs created there since 2013 depending on tourism.
Spain’s spectacular tourism boom is largely the result of a trend that is both externally driven and transitory in nature: The surge a few years ago in geopolitical risks affecting rival tourist destinations like Turkey, Egypt, and Tunisia. According to research by UBS, more than half of the growth of Spain’s tourist industry can be attributed to the drop-off in tourism in places like Tunisia, Turkey, and Egypt.
Now, that trend is beginning to reverse. Tourists are gradually returning to destinations in North Africa and the Middle East, many of which have the added advantage that they are considerably cheaper than Spain.
Last year was the best year for Tunisia’s tourist industry since 2014, with some seven million visitors. Turkey welcomed 11.8 million tourists in the first five months of 2018, a new all-time high, according to Culture and Tourism Minister Numan Kurtulmuş. “Tourist numbers are up over 30 percent compared to the same period of 2017… At the end of 2018, we will hopefully break a new record by hosting 40 million tourists and earning $32 billion,” Kurtulmuş said.
Between 2014 and 2016 tourist numbers to Turkey crashed by 25% as a result of instability in the region as well as a decision by Moscow to ban Russians from visiting the country following the downing of a Russian warplane over Turkey. That ban was lifted in June 2016. In 2017, Turkey’s tourist industry registered 39.9 million arrivals, its best year ever.
One of the UK’s biggest tour operators, Thomas Cook, recently reported that its Turkish holiday bookings are up 84% year on year. The tour operator also revealed that bookings to Egypt are up 89% while Tunisia is attracting more and more visitors after the company’s flights to the North African country resumed in February — three years after the region was hit by a terror attack that left 38 dead, including 30 Britons.
British holidaymakers are a vital segment for Spain’s tourist industry, accounting for over 1-in-5 visitors. But their number is beginning to drop. Brits made 2.3% fewer visits to Spain in the first five months of 2018 than they did during the same period of 2017. As we warned eleven months ago, if the sterling continues to fall sharply against the euro as fears of a hard or no-deal Brexit rise, Spain will probably receive fewer British tourists, and that is likely to have a major impact on the overall number of visitors.
Another factor that is hurting Spanish tourism is the continued growth of so-called “tourism phobia.” Last year Barcelona, Valencia, and parts of the Balearic Islands witnessed a rash of coordinated attacks against tourist targets led by Arran, the youth wing of the radical separatist CUP (Popular Unity Candidacy) party. At least seven hotels in Barcelona were vandalized by protesters. Graffiti telling tourists to go home has become a ubiquitous part of the urban landscape on Spain’s eastern Mediterranean cost.
Arran began this summer’s campaign by chaining a large sign to one of the emblematic dragons in Antoni Gaudi’s Park Güell demanding an end to mass tourism. It also stationed protesters outside the departures gate of Mallorca’s Son Sant Joan airport with placards bearing welcoming messages (in Spanish and English) such as “Tourism is Killing Mallorca”, “Mass Tourism=Precarious Jobs”, and “100,000 Visitors Per Day Is Unsustainable” (on a day that 185,000 visitors were scheduled to land on the island, which has a permanent population of just 869,000).
Many local citizens, while wary of supporting Arran’s extreme methods, are sympathetic to many of the group’s misgivings about today’s model of unfettered mass tourism. Last year local residents of Barcelona identified tourism as the biggest problem the city faces: worse than poverty, crime, and even unemployment. In Mallorca’s capital, Palma, the City Council has even banned all tourist apartments after a 50% surge in the number of unlicensed apartments in just two years.
Today’s brand of mass tourism may provide buckets of money for some businesses and local authorities, but it brings with it a toxic mix of externalities, including sky-high prices and rents, overcrowding, noise, environmental degradation, overstretched public services and infrastructure, and the gradual formation of a mono-dimensional economy. Also, many of the jobs it creates are of the casual, low-paid variety.
But without Spain’s recent massive boom in tourism those jobs would not exist at all. And without those jobs, the total number of unemployed in Spain would quickly surge back toward the 20% mark. If the latest visitor numbers are any indication, Spain tourist boom is already running out of steam. If visitors to the country’s saturated resorts receive a hostile reception this summer, they’re likely to travel elsewhere next time. Resorts in places like Turkey and Tunisia will no doubt be happy to oblige. By Don Quijones.
It’s payback time for the financial sector in Spain that was bailed out by taxpayers, the new government thinks. Read… Banks Squeal as Spain’s New Government Threatens to Do Unthinkable: Raise Taxes on Their Profits
Enjoy reading WOLF STREET and want to support it? Using ad blockers – I totally get why – but want to support the site? You can donate. I appreciate it immensely. Click on the beer and iced-tea mug to find out how:
Would you like to be notified via email when WOLF STREET publishes a new article? Sign up here.