Tourism under threat

The terrorist attacks in Catalonia could have economic consequences as well. The most likely ones involve the attractiveness of our tourist destinations. The risk factors that had, until now, sent flows of international visitors to Spain instead of other destinations could also work in reverse. This is an additional reason to reflect on the future viability of an industry that is essential to our country’s prosperity. And also to eliminate the budding “tourism-phobia” that has recently emerged in some institutions, endangering an important source of wealth and jobs.

Spain is a world power on the tourism front. The industry contributes over 11% to the economy’s GDP and represents 13% of all jobs. Its positive evolution in recent years has been a determining factor in the reduction of the deficit in the current account balance. In the first six months of this year, there were over 36 million international tourists in Spain, a 11.6% rise from the same period last year. If the trend persists in the coming months, 2017 will again set a new record in terms of revenues and visitors – there were 75 million tourists last year – for the fifth year in a row.

The combination of exposure to terrorist threats and cheap offers should accelerate reforms that have been long sought by some industry members

The main risk, a drop in British visitors – feared after Brexit – has been averted. There were 8.6 million visitors from Britain in the first half of this year, a 9% rise from the first six months of 2016, and these tourists spent over €7.5 billion. To a lesser degree, other Europeans have also increased their preference for Spain as a vacation destination.

But the industry is in no way immune to threats, as we have just witnessed. Deteriorating quality of equipment and services is one threat, as is the lack of deviation from the “cheap-sun-and-sand” formula that makes up tourism’s main competitive edge. This trait is very price-sensitive, and experience has proven that it is also highly exposed to the perception of risk of a terrorist attack and political instability in alternative destinations.

To entrust the industry’s future to continuing low prices and a risk-free environment is a mistake, because a rise in visitor numbers coupled with reduced average spending is bad business. This option does not allow for an improved offering; it attracts visitors who care little for other attractive spots in the country, it leads to a deterioration in infrastructure and the environment, and it adds to the weariness shown by Spaniards themselves when it comes to some popular destinations.

The terrible terrorist attacks in Catalonia represent something more than a wake-up call about the vulnerability of the industry’s bonanza years. This region is the main recipient of foreign tourism in Spain: in the first half of 2017 it held the first spot in tourist arrival numbers: over 8.6 million visitors, a 10.3% rise from the previous year, and with spending of over €8.1 billion. It is precisely in Catalonia, and more explicitly in Barcelona, where some residents have manifested their weariness with the excessive tourist flows, and where local officials have acted in ways that are far from recommendable.

That combination of exposure to terrorist threats and an excess of cheap offers should accelerate reforms that have been long sought by some industry members. These reforms should control the number of available tourist lodgings, and also help improve the quality of the same while diversifying the offer. Spain has the business acumen and the cultural, historical and culinary attributes to create an offer that can generate greater revenue at a lower cost for all, without generating an aversion to visitors.

English version by Susana Urra.