The World Travel and Tourism Council has announced that Spain was the second most popular tourist destination after France last year. This speaks to the cultural diversity, openness, and affordability of Spain. While Catalonia is the most visited region in Spain, the slight drop in tourism last year was more than made up for by Spain’s 16 other autonomous regions. With the value of international travel expected to grow by 3.1% this year, Spain is well positioned to take advantage of tourism’s economic benefits.
Diversity is a Strength
Following the end of the Spanish Civil War in 1939, Spain was governed for nearly four decades as a centralised state, resulting in the subordination of regional identities. However, the adoption of a democratic constitution in 1978 meant that “provinces with common historic, cultural and economic characteristics,” were given permission to “accede to self-government and form Self-Governing Communities (Comunidades Autónomas)”. This has facilitated the expression of distinct cultural and linguistic features of each of Spain’s diverse regions.
While Spanish is the dominant language in the country, there are three other official languages including Catalan, Basque, and Galician. A visitor to Spain might also hear regional languages or dialects spoken such as Valencian, Aragonese, Extremaduran, Gascon, and Asturian.
Spain is home to the third largest number of UNESCO World Heritage Sites, making it a popular destination for tourists with an interest in Spain’s dynamic history. These include the Moorish architecture of the Alhambra Palace, the gothic cathedral of Santiago de Compostela, and Real Alcázar, more familiar to television viewers as Dorne from Game of Thrones.
Furthermore, Spain is the second largest country in Western Europe, a fact that speaks to its geographic diversity. Tourists can ski in the Pyrenees, bask in the sun along the beaches of Costa del Sol, or hike through one of Spain’s 15 national parks.
Tourism as an Economic Driver
Spain’s popularity amongst tourists is about more than just bragging rights. The industry is a key source of economic growth. For example, the more than 400,000 companies connected to tourism employed 4.9% of Spain’s workforce in 2017. According to the World Travel and Tourism Council, 14.9% percent of Spain’s GDP can be attributed to tourism.
There have also been beneficial spillover effects as a result of Spain’s vibrant tourism industry. The growth in revenue has spurred a series of mergers and acquisitions amongst Spain’s hotels. This consolidation of the industry will boost its productivity and help it compete against new incumbents like Airbnb.
Tourism has also contributed to a healthy current account surplus. The current account records a country’s transactions with the rest of the world. Currently, Spain has a three-year average current account surplus of 1.7%. This is one of the reasons cited by Moody’s for their recent upgrade of Spain’s credit rating. A current account imbalance is a statistically significant indicator of a pending crisis. The fact that Spain’s current account falls within the EU’s threshold of a healthy current account balance, suggests that the economy is stable and is likely to remain so.
It’s Not All Sunshine and Carnations
Despite these economic benefits, there has been some pushback against Spain’s booming tourism industry. Two political groups, Arran and Endavant Mallorca have claimed that a rise in tourism has made housing unaffordable for local residents in Mallorca. The groups have staged several protests that included pelting tourists with eggs and the setting off of flares. Groups in other regions have also been responsible for slashing tourist bike tires and painting anti-tourist graffiti.
These campaigns are not about ridding Spain of its tourists. Rather, the concern is that Spain’s tourism boom is unsustainable. In order to address this, local governments have cracked down on the popular home-sharing platform, Airbnb. In February the Balearic Islands fined Airbnb €300,000 for listing unregistered flats on its platform. Other cities such as Madrid, Barcelona, and Malaga have or are in the process of enacting laws which will regulate Airbnb and hopefully contain the rise in housing costs.
Traveling into the Future
In ten years, it’s forecasted that tourism will account for 16.4% of Spain’s GDP and employ more than 1.15 million workers. Spain is an attractive tourist destination and building on this comparative advantage will be an important part of furthering the country’s economic revival. By continuing to promote its cultural diversity and protecting the interests of local residents, Spain should be able to reap the rewards of its international popularity.
