Multiyear, Job-Creating, Mass-Tourist Boom in Spain Runs Out of Steam

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 
 

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  26 comments for “Multiyear, Job-Creating, Mass-Tourist Boom in Spain Runs Out of Steam

  1. Dimitri
    Jul 17, 2018 at 1:40 pm

    More and more people I know are opting for Greece, Croatia and Portugal instead of the massively overcrowded and expensive Spanish tourist spots. As for housing, a lot of the new build prices are even exceeding the pre crash lunacy.

  2. J Bank
    Jul 17, 2018 at 2:03 pm

    I just learned that “splutter” and “sputter” have the exact say definition. Huh.

    • nick kelly
      Jul 17, 2018 at 3:46 pm

      Well in terms of use, not exactly.

      The first important difference is that ‘sputter’ has an industrial use. If molten metal is being deposited in sprayed droplets for example this can be called sputtering. If you used ‘spluttering’ in the plant they might say as a joke ‘you splutter we sputter’

      ‘Splutter’ almost always means what a human does when they are stumbling over their words in a rush.

      Back to sputter. If a car is running rough it might be described as sputtering. But not spluttering, which is what the owner might do in response.

      • ND55
        Jul 17, 2018 at 7:24 pm

        Thanks. Enlightening with humor.

      • Martin
        Jul 18, 2018 at 12:44 am

        As someone who has been sputtering for more than 3 decades, I can say that your definition misses the mark. It is the ejection of atoms from a ‘target’ by ions accelerated towards the target by an electric field or electrical ‘bias.’ The atoms form a thin film on the substrate that intercepts their trajectory. Most common use is for coating glass for reducing heat loss and/or gain. Many other uses.

  3. Joe Banks
    Jul 17, 2018 at 2:49 pm

    Don, thank you and this was an interesting article. I try not to be a downer but I feel you bring up a larger point. These days it seems humans want to monetize everything. Can we just enjoy a beautiful sunset without having to own it? I went to London in January, I quickly learned to stay away from downtown; throngs of people in late January! I ended up spending my days riding my bike all over the canals of London and had them largely to myself. I saw a road, I followed it. No tour guide needed. It was a wonderful vacation. I’m born and raised in San Diego and still live here. Even here people want to monetize (make a buck) off of the beaches: surfing schools, boogie board schools, kayaking tours. Why does someone need to be taught these things? My dad dropped us off at the beach at 7 and said I’ll be back at 12 to pick you up. We didn’t need lessons. The world has passed me by but I’m very grateful for having lived and grown up when I did. I think it was those lessons and the free spirits of my parents that made my trip this year to London so special. Thanks for your article and for listening.

    • Jul 17, 2018 at 4:27 pm

      Thanks for sharing, Joe.

      I also try to follow the road less travelled when visiting new places, unless I’m going through a visibly dodgy neighbourhood in a reputedly dangerous city, in which case I try to keep to the busier thoroughfares. Thankfully that doesn’t happen very often :-]

      • R Davis
        Jul 18, 2018 at 6:27 am

        Forgive me – but – what is the point of taking the backstreets – because all the good stuff is full to overflowing.
        You yourself wrote how the pickpockets & prostitutes come out on ‘visitors day’ – in an article about some fest in Spain/Catalonia ??
        Isn’t it all part of the ambience ??

        • Argus
          Jul 18, 2018 at 6:48 pm

          Backstreets can offer delightful surprizes – flower-drenched courtyards in Spain, unimportant but beautiful historic buildings in England etc. Obviously one avoids areas with dodgy types loitering.
          In big cities like London, I like to get to the museums and galleries as soon as they open, spend a targeted hour or two, then leave just as the tourist buses arrive.

    • Cynic
      Jul 18, 2018 at 4:00 am

      Even in central London at the height of the season, the back streets and squares can be delightful and nearly empty; many quite grand and full of interesting architecture. Always look up.

      But I’ve given up on big art shows in London: just fatally over-crowded, if not with tourists then with masses of pensioners, both block the view three or four ranks deep.

    • R Davis
      Jul 18, 2018 at 6:18 am

      How old are you – old being your operative word here -??

      • Cynic
        Jul 18, 2018 at 12:57 pm

        Actually, I prefer pensioners to the general tourist mob, as I can usually look right over their heads. Nor do I begrudge them their fleeting pleasures before the Infinite beckons.

        But it’s the constant 3 or 4 ranks in front of every painting which renders a visit to a big show – for £20 – simply futile.

        It was all just so much nicer in the 90’s: the shabby old Queen’s Gallery where hardly a soul went was ideal, just you and the Leonardo’s. The Wallace is still fairly quiet if one picks one’s moment.

  4. Rates
    Jul 17, 2018 at 4:12 pm

    I went the last week of May and it was surprisingly civil and not that crowded. Even La Rambla was manageable.

    I definitely could see the attraction of Barcelona as a place to live though. Good public transport (the Metro at least), there’s a beach.

    • Frederick
      Jul 17, 2018 at 4:27 pm

      You missed the petty criminality that is rife in that city NO it is definitely NOT a good place to live Unless of course they got religion since I was there last and cleaned up the place which I highly doubt

    • Jul 17, 2018 at 4:41 pm

      Rates,

      You picked a good year to come. The tourist numbers are certainly down, albeit not dramatically. You can feel it in the extra pockets of space on busy streets like La Rambla. When Barcelona is like this, as if it belongs to local residents and visitors alike, it’s a great place to live and a great place to visit, a wonderful little big city by the sea.

    • Martin
      Jul 18, 2018 at 12:54 am

      We visited for a week at the end of November 2017. Perhaps before most of the anti-tourism activity. It was delightful and there is nothing quite as magical for me as the work of Gaudi. Dreamed of visiting Casa Battlo for about 40 years and was not disappointed. People friendly and helpful. Try to avoid the Ramblas.

  5. Nicko
    Jul 18, 2018 at 3:41 am

    Living here in Egypt on the Red Sea, tourist numbers are up 100%, hotel occupancy is at 100%, the Russians have returned, the Brits are back, also Germans and French ect… safety not an issue (practically a police state after all, very safe), over 50 resorts and hotels in progress- leading Africa in hotel construction. Bring those Yankee dollars, Boom times are back.

    • MC01
      Jul 18, 2018 at 12:37 pm

      How’s the Egyptian pound doing? ☺

      If I remember correctly it has lost over 60% of its value against the euro since late 2016. It makes the Turkish lira look good by comparison.
      No small wonder big tour operators such as TUI love Egypt so much: with a currency so thrashed hard currency can get you smoking hot deals.

      And I bet those new resorts will provide some work for local construction firms while the mess that is the new capital city is solved. If it’s ever solved.

  6. DAC
    Jul 18, 2018 at 9:01 am

    Hiked across Northern Spain last October while completing the Way of St. James pilgrimage. The people, the food and land were all wonderful. Cannot recommend it enough.

  7. Steve clayton
    Jul 18, 2018 at 2:43 pm

    Thanks Dac, yes I’m doing part of the pilgrimage next year. Cannot wait.

  8. Argus
    Jul 18, 2018 at 7:00 pm

    For a quiet holiday, i.e. swimming, hiking, cycling, whale watching, fishing, horse-riding, in the environment of Portuguese culture, try the Azores. Not cheap to get there but the booze and food is cheap. The people are delightful and it is totally safe. Each of the 9 islands in this archipelago offers something unique.
    Late August and early September are best. It is hot and humid in July and the winter is rainy and windy.

  9. raxadian
    Jul 19, 2018 at 8:23 pm

    Who will crash first? Spain or Italy? Flip a coin!

Comments are closed.