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• Tourism contribution to Spanish GDP 2006-2023

Holidaymakers in Spain

Covid-19 impact on the spanish tourism industry, contribution of the tourism sector to the gross domestic product in spain from 2006 to 2022, with a forecast for 2023 (in billion euros).

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January 2023

2006 to 2022

nominal GDP in current prices

*Forecast. Figures were rounded.

Other statistics on the topic Travel and tourism in Spain

• Most visited cities in Spain 2022
• International tourism spending in Spain 2012-2022
• Leading European countries in the Travel & Tourism Development Index 2021

Food & Drink Services

• Main restaurants and food stall companies in Spain FY2021, by sales revenue

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Statistics on " Travel and tourism in Spain "

• Tourism sector as share of GDP in Spain 2010-2021
• Monthly growth rate of tourism GDP in Spain 2022
• Tourism employment in Spain 2015-2021
• Tourism employment in Spain Q4 2022, by industry
• Inbound visitors in Spain 2000-2022
• Inbound tourism volume in Spain 2022, by origin
• Domestic trips in Spain 2015-2022
• Domestic trips in Spain 2022, by destination
• Domestic tourism spending in Spain 2015-2022
• Share of travel and tourism spending in Spain 2022, by traveler origin
• Inbound tourism volume in Spain 2022, by travel reason
• Domestic trips in Spain 2022, by travel reason
• Share of travel and tourism spending in Spain 2022, by purpose
• Inbound trips for cultural purposes to Spain 2010-2022
• Number of enotourists in Spain 2008-2022
• Number of skiers and snowboarders in Spain 2010-2022
• Pilgrims on the Way of Saint James 2011-2022
• Tourism premises in Spain 2015-2021
• Share of tourism companies in Spain 2021, by size
• Main hotel groups in Spain FY2021, by sales revenue
• Main passenger airlines in Spain 2022
• Main travel agencies in Spain FY2021, by sales revenue
• Ecotourism businesses' average revenue in Spain 2022, by type
• Main coastal destinations in Spain 2022, by number of hotel guests
• Attendance to Spanish National Heritage sites 2022
• Attendance to Spanish national parks 2022
• Cruise ship calls at Spanish ports 2022, by authority
• Enotourism destination areas in Spain 2022, by region
• Quarterly online revenue of accommodation businesses in Spain 2014-2022
• Quarterly online revenue of travel agencies & tours operators in Spain 2014-2022
• Airbnb revenue in Spain 2015-2020
• Willingness to purchase tourism services online in Spain 2019-2022
• Average spend on tourism services booked online in Spain 2018-2022
• Hotel / private accommodation online bookings by brand in Spain 2023

Other statistics that may interest you Travel and tourism in Spain

• Premium Statistic Leading European countries in the Travel & Tourism Development Index 2021
• Premium Statistic Tourism contribution to Spanish GDP 2006-2023
• Premium Statistic Tourism sector as share of GDP in Spain 2010-2021
• Premium Statistic Monthly growth rate of tourism GDP in Spain 2022
• Premium Statistic Tourism employment in Spain 2015-2021
• Premium Statistic Tourism employment in Spain Q4 2022, by industry

Tourism volume and expenditures

• Premium Statistic Inbound visitors in Spain 2000-2022
• Premium Statistic Inbound tourism volume in Spain 2022, by origin
• Premium Statistic International tourism spending in Spain 2012-2022
• Premium Statistic Domestic trips in Spain 2015-2022
• Premium Statistic Domestic trips in Spain 2022, by destination
• Premium Statistic Domestic tourism spending in Spain 2015-2022
• Basic Statistic Share of travel and tourism spending in Spain 2022, by traveler origin
• Premium Statistic Inbound tourism volume in Spain 2022, by travel reason
• Premium Statistic Domestic trips in Spain 2022, by travel reason
• Basic Statistic Share of travel and tourism spending in Spain 2022, by purpose
• Premium Statistic Inbound trips for cultural purposes to Spain 2010-2022
• Premium Statistic Number of enotourists in Spain 2008-2022
• Premium Statistic Number of skiers and snowboarders in Spain 2010-2022
• Premium Statistic Pilgrims on the Way of Saint James 2011-2022
• Premium Statistic Tourism premises in Spain 2015-2021
• Premium Statistic Share of tourism companies in Spain 2021, by size
• Premium Statistic Main hotel groups in Spain FY2021, by sales revenue
• Premium Statistic Main passenger airlines in Spain 2022
• Premium Statistic Main travel agencies in Spain FY2021, by sales revenue
• Premium Statistic Main restaurants and food stall companies in Spain FY2021, by sales revenue
• Premium Statistic Ecotourism businesses' average revenue in Spain 2022, by type

Main destinations

• Premium Statistic Main coastal destinations in Spain 2022, by number of hotel guests
• Premium Statistic Most visited cities in Spain 2022
• Premium Statistic Attendance to Spanish National Heritage sites 2022
• Premium Statistic Attendance to Spanish national parks 2022
• Premium Statistic Cruise ship calls at Spanish ports 2022, by authority
• Premium Statistic Enotourism destination areas in Spain 2022, by region

Online travel market

• Premium Statistic Quarterly online revenue of accommodation businesses in Spain 2014-2022
• Premium Statistic Quarterly online revenue of travel agencies & tours operators in Spain 2014-2022
• Premium Statistic Airbnb revenue in Spain 2015-2020
• Premium Statistic Willingness to purchase tourism services online in Spain 2019-2022
• Premium Statistic Average spend on tourism services booked online in Spain 2018-2022
• Premium Statistic Hotel / private accommodation online bookings by brand in Spain 2023

Further related statistics

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• Basic Statistic Travel and tourism's total contribution to GDP in Finland 2012-2028
• Basic Statistic Total tourism contribution to GDP in Denmark 2019-2021
• Basic Statistic Travel and tourism's contribution to GDP in Denmark 2017, by type
• Basic Statistic Travel and tourism's total contribution to GDP in Russia 2019-2023
• Premium Statistic Tourism share of GDP in Sweden 2015-2021
• Basic Statistic Travel and tourism's direct contribution to GDP in Poland 2012-2028
• Basic Statistic Belize: internal travel and tourism consumption 2010-2019
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• Premium Statistic Inbound tourism spending in Peru 2010-2022
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• Basic Statistic Bermuda: internal travel and tourism consumption 2010-2019
• Premium Statistic Number of rooms in tourist accommodations in Vietnam 2019-2023
• Premium Statistic Number of employees in the tourism sector in Languedoc-Roussillon-Midi-Pyrénées 2013

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• Travel and tourism's total contribution to GDP in Poland 2012-2028
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• Total tourism contribution to GDP in Denmark 2019-2021
• Travel and tourism's contribution to GDP in Denmark 2017, by type
• Travel and tourism's total contribution to GDP in Russia 2019-2023
• Tourism share of GDP in Sweden 2015-2021
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• Belize: internal travel and tourism consumption 2010-2019
• Guatemala: internal travel and tourism consumption 2010-2019
• Inbound tourism spending in Peru 2010-2022
• Internal tourism consumption in Argentina 2010-2019
• Bermuda: internal travel and tourism consumption 2010-2019
• Number of rooms in tourist accommodations in Vietnam 2019-2023
• Number of employees in the tourism sector in Languedoc-Roussillon-Midi-Pyrénées 2013

• Hotel Industry and Tourism

Spanish Tourism Satellite Account. Latest data

Latest press releases.

Tourism activity reached 155,946 million euros in 2022, 11.6% of GDP, which was 3.9 points more than in 2021. The characteristic branches of tourism generated more than 1.9 million jobs, 9.3% of total employment.

• Press release
• Nota informativa. Revisión Estadística 2024 de las Cuentas Nacionales
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Most popular tables

Did you know....

The Spanish Tourism Satellite Account (STSA) is a summary statistic composed of a set of accounts and tables, based on the methodological principles of national accounts and presenting the different economic parameters of tourism in Spain, for a given reference date. The current base is 2010.

It essentially consists of three types of components:

• - Supply accounts and tables, in which an attempt is made to characterise the production and cost structures of tourism companies.
• - Demand tables which intend to characterise, from an economic point of view, the different types of tourists, national tourism compared with international, the types of goods and services demanded, etc.
• - Tables that interrelate supply and demand, which facilitates obtaining some integrated measurements of the contribution of tourism to the economy via variables such as GDP, production or employment.

Spain’s tourism renaissance will drive economic growth this year

The recovery of the tourism sector in Spain is expected to continue, putting the industry at the centre of economic growth this year. However, due to macroeconomic uncertainty, high price pressure in the sector and lagging long-haul travel, it may take until 2024 for the number of international visitors to return to pre-pandemic levels

Spain's tourism revival expected to continue despite macroeconomic challenges

Despite macroeconomic challenges, Spain's tourism sector rebounded strongly in 2022. The country saw a remarkable increase in the number of international visitors, rising by 130% from 31.2 million in 2021 to 71.6 million in 2022, showing a strong appetite to travel again after two years of strict travel restrictions. Although disposable income was under severe pressure in many European countries last year, consumers refused to cut back on their travel spending. That being said, the number of international tourists entering Spain still remained 14% below pre-pandemic levels, proving that there is still a long way to go to full recovery.

Number of international visitors entering Spain, in absolute values and as % of 2019 levels

Challenges on the horizon: factors hindering the growth of international tourism in spain.

There are several factors that could hamper the growth of international tourism. One is that for Spain's main source countries, the UK and Germany, which accounted for 22% and 13% of international visitors in 2019 respectively, the economic outlook looks bleak. In the UK, the cost-of-living crisis has hit hard and we expect the UK economy to grow by only 0.2% this year. Meanwhile, the German economy has contracted over the past two quarters and is officially in a technical recession. We expect economic growth in Germany to stagnate this year. While the sharp fall in purchasing power is not currently deterring Europeans from travelling, it could cause price-sensitive travellers to swap Spain for cheaper destinations.

Unfavourable exchange rates are also encouraging British travellers to choose Turkey over southern European countries including Spain. A recent report by the European Travel Commission showed that Turkey had 69% more arrivals from the UK in the first quarter of this year than in 2019, while the number of arrivals in Spain was lower than in 2019. This shift in preference can be attributed to the significant price difference. The depreciation of sterling against the euro, combined with the continued devaluation of the Turkish lira against the euro, has made travelling to Turkey much more affordable for British tourists than visiting southern European countries such as Spain.

Another factor hampering recovery is the current travel restrictions on Russian travellers. In 2019, Spain welcomed 1.3 million visitors from Russia, accounting for about 1.6% of total tourist arrivals. This particular group of visitors will be completely absent in 2023. And Spain will not get a boost from Chinese tourism this year either. Although Chinese tourists are eager to travel again, they are favouring domestic trips or visits to neighbouring countries. The number of Chinese tourists visiting Spain was relatively modest even before the pandemic: about one million Chinese tourists travelled to Spain in 2019, which was only 1.3% of the total number of visitors that year.

Business travel to Spain bounces back to pre-pandemic levels

Spain is witnessing a remarkable recovery in business travel after the sharp decline during the pandemic. In the first quarter of 2023, the number of international business travellers increased by 48% compared to the same period last year, returning to pre-pandemic levels. Business travellers represent a significant proportion of the total number of visitors. In 2019, 5.4 million foreign visitors visited Spain for professional reasons, or 6.5% of the total number of foreign visitors in 2019. This means that more than one international arrival in 20 comes to Spain for business reasons.

Last year, business travel recovered more slowly than leisure travel. Due to the shift online during the pandemic, many companies became more selective about the necessity and frequency of business travel, opting more for digital meetings or conferences. In addition, economic uncertainty and the energy crisis also caused a pullback in business travel at the turn of the year. While business travel was already at 96% of its pre-crisis level in October 2022, it fell to 74% in December as many companies adopted cost-saving measures and reduced their travel budgets.

Business travel has been steadily catching up since the beginning of this year. The Spanish economy has recovered strongly from the energy crisis, growing by 0.5% in the first quarter, and business confidence has returned. In March, the number of international business travellers was already back to 94% of the 2019 level. We expect that the recovery will persist throughout this year, resulting in half a million additional business travellers visiting Spain compared to 2022. Towards the end of the year, however, we might see a slight decline again if the pace of recovery slows and the US economy falls into recession.

Number of international visitors coming to Spain for professional reasons, in % of their number in 2019

Outlook for international travel in 2023.

Despite the headwinds, the first months of 2023 already showed a promising start for international tourism in Spain this year. In the first quarter, the number of foreign visitors reached 97% of pre-pandemic levels. Falling energy prices and stable labour market conditions may have underpinned the tourism sector. If this trend continues into the summer peak, it is likely that tourism figures in the summer months could match or even exceed 2019 levels for the first time.

The recovery in international travel is expected to continue into 2023, albeit at a slower pace than last year. The tourism sector is benefiting from continued strong travel appetite and a slightly improved economic outlook, thanks to a sharp fall in energy prices. However, persistent macroeconomic concerns will slow the pace of recovery, especially in the second half of this year. All in all, we expect a total of 80.7 million tourists to visit Spain in 2023, up by 13% from the previous year but still 3% below the pre-pandemic level. It will probably take until 2024 for the annual number of international tourists to reach 2019 levels again.

Number of international visitors entering Spain each year, including ING forecast (in millions)

Inflationary challenges in the tourism sector remain elevated.

Inflation in the tourism sector remains stubbornly high, with significant pressure on all tourism activities. The consumer price index (CPI) for tourism and hospitality, a specific category within the broader index measuring price changes for tourism and hospitality-related goods and services, stood at 8.1% in April. This figure is just slightly below the peak level of 8.5% recorded in August 2022. Since the start of the pandemic, prices for tourism products and services have risen by an average of 16%.

Inflationary pressures can be attributed to two main factors. First, there are general inflationary pressures due to the increased cost of labour, raw materials and other inputs, which are passed on to consumers. In addition, sustained high demand and consumers' increased willingness to spend on travel and accommodation have given travel and accommodation providers greater pricing power. This allows them to capitalise on this higher demand by raising prices more easily.

Price pressures in the tourism sector show no signs of cooling yet

Increased price levels also have negative consequences. They may lead to a drop in domestic demand, especially among price-conscious travellers or those with limited disposable income. Moreover, potential international visitors may opt for alternative destinations that offer similar travel experiences at more affordable prices. Those who still visit Spain will adjust their spending patterns to mitigate the impact of high prices.

In March, foreign tourists spent an average of €168 per day, up 7% from March 2022. However, given average inflation of 8.1% in the tourism sector, this equates to a 1% drop in real spending. It seems that, in order to cope with significant price increases, visitors are cutting back on certain expenses, such as choosing cheaper accommodation, budget-friendly restaurants and cost-effective activities. In addition, many travellers shorten their trips as another effective strategy to reduce overall travel costs. While the average duration of a trip was 8.0 days in March last year, it has now dropped to 7.6 days.

Tourism will be the main catalyst for economic growth this year

Tourism is a significant contributor to Spain's GDP. According to data from the World Travel and Tourism Council (WTTC), for the year 2019, tourism represented 12.4% of Spain's GDP. This includes the direct impact of sectors such as accommodation, catering, transport and tourist attractions. Taking into account indirect effects as well, tourism's total contribution to Spanish GDP reached 15.2%.

Further recovery of the tourism sector will play a central role in the country’s growth this year. After a significant decline during the pandemic, Spanish tourism could further restore its importance to the Spanish economy. With household consumption declining and expected interest rate hikes dampening investment dynamics, tourism will be a key driver of growth this year. Our forecast is for growth of 1.9% for Spain, surpassing the eurozone's expected growth rate of 0.5%.

Next stop for Spanish tourism excellence: Sustainability

Tourism is vital to Spain. The country’s natural attractions and cultural assets draw crowds from around the world—making many of its communities reliant on tourism. Pre-pandemic, Spain was the second-largest tourism destination in the world, drawing 84 million visitors in 2019 who brought over €92 billion in revenue. 1 “Spain: Economic and infrastructural situation,” Climate ADAPT, Climate ADAPT website, updated March 15, 2021; “Satellite account of tourism in Spain,” INE, January 7, 2022. Travel and tourism accounted for around 14 percent of Spain’s total GDP and provided one in eight jobs. In some communities, tourism contributed to over 20 percent of all economic activity . While these figures plummeted during COVID-19, travel and tourism is recovering and Spain remains dependent on success in tourism.

Spain’s tourism sector now faces new challenges. Fears of a global recession, and geo-political uncertainty, could put pressure on tourism. And as travel resumes in an era of high inflation, Spain will likely face stiff competition from several destinations that also offer sunshine and coastal vacations at similar, or lower, prices—Egypt, Greece, and Turkey, for example.

The sector also faces physical and economic threats due to climate change. The Mediterranean basin is getting warmer: the number of days above 37°C in southern Spain is expected to double by 2050 and rising temperatures increase the risk of drought, water stress, wildfires, and floods. 2 “ A Mediterranean basin without a Mediterranean climate? ” McKinsey Global Institute, May 2020. Extreme weather is already evident as the pre-summer season of 2022 saw temperatures climb above 40°C in Seville. 3 “Spain is hit by the hottest pre-summer heatwave for 20 years as temperatures climb to 43 C,” Euronews, June 14, 2022. An increase in the number of “too hot” days could discourage tourism, particularly in peak season. For instance, a 2022 survey by a travel insurance company found that 65 percent of UK holiday makers thought Spain would be too hot to visit by 2027. 4 Charlotte Elton, “Spain, Greece, Turkey: Most Brits think holiday hotspots will be ‘too hot’ to visit by 2027,” Euronews, September 9, 2022.

Of course, Spain’s tourism sector cannot combat climate change alone. But this backdrop underscores the urgency to act. Globally, tourism is a significant contributor to emissions, and Spain can play a role in emissions reduction. In 2019, tourism was responsible for about 11 percent of greenhouse gas emissions, worldwide. Of this, the largest emissions came from domestic and international tourism in China, India, and the United States. Compared to these top three, Spain ranks at number 16 for emissions from tourism. 5 Sustainability in travel 2021: Quantifying tourism emissions for destinations, Skift Research, June 2021. Considering the size of Spain’s tourism industry, the country compares well against these destinations, but there is room for improvement.

Spain can set itself apart by prioritizing sustainability, including environmental issues such as water usage, plastic waste, carbon emissions, and social issues such as how tourism affects local communities. Globally, travelers are becoming more aware and are seeking out vacations with less impact on the environment and on local communities. Sustainability could become a key differentiator.

Furthermore, sustainable travel could draw discerning premium travelers who will likely be willing to pay for offerings that uphold their values. But efforts to draw these travelers will need to extend beyond marketing and involve real operational changes. Gen Z travelers, in particular, don’t care what tourism businesses say about their sustainability efforts, they want to see it in practice. 6 Dawit Habtemariam, “Tourism’s sustainability pitch needs to be more subtle for Gen Z,” Skift, March 8, 2023. Gen Zs, who typically have a heightened awareness of climate change, are looking for eco-friendly accommodation options. Skift found that 38 percent of Gen Zs across the world would consider staying in green accommodation on their next holiday, compared to the 33 percent response rate of those over 25. 7 Mary Ann Ha, “Meeting the high expectations of the Gen Z traveler: New report,” Skift, June 21, 2022.

This article examines the key aspects of sustainability that are relevant to travel and tourism and suggests ways in which stakeholders across Spain’s tourism sector could prioritize and invest in sustainable offerings. Such actions can ensure that this important sector remains competitive, and help to safeguard its assets for future generations.

Spain is a leading destination, but faces strong competition and a tough operating environment

The physical and economic consequences of climate change, global economic environment, strong competition, and changing consumer preferences all put pressure on the sector. Worldwide, rising inflation could prompt consumers to cut back on travel, or “downtrade” to cheaper destinations. While “revenge travel” boosted tourism as travel restrictions eased, the threat of a looming recession could dampen appetite for travel.

European travelers want to visit beaches that are conveniently close, warm, and affordable. The largest outbound markets for sun and beach tourism include Germany, the United Kingdom, Scandinavia, the Netherlands, Belgium, and Austria. Spain is a popular destination for sun and sand, accounting for almost one-third of international overnight trips to the EU’s coastal areas in 2021. 8 Eurostat dataset: Nights spent at tourist accommodation establishments by degree of urbanization and coastal/non-coastal area, accessed January 18, 2022. But, Spain competes with other destinations, in the Mediterranean and beyond, that cater to these tourists.

Even if overall demand falls, select locations across the country are at risk of over-tourism. Pre-COVID-19, a World Economic Forum report placed Spain first out of 140 competitive countries in travel and tourism. 9 The Travel & Tourism competitiveness report 2019, World Economic Forum, September 4, 2019. The report warned that one-third of international arrivals are concentrated in the top ten countries, and this concentration can lead to severe pressure, and negative effects, on tourism infrastructure and services as well as local populations.

Several Spanish beach destinations have struggled with unruly visitors, and some cities have experienced an anti-tourism backlash in the wake of overcrowding. 10 “Irish tourist seriously injured in fall from balcony in Spain,” Murcia Today, May 5, 2022; “Why Barcelona locals really hate tourists,” Independent , August 12, 2017. Authorities have stepped in to manage the situation in specific locations. For example, in 2020, Spain introduced new laws to limit alcohol consumption at all-inclusive resorts in the Balearic Islands. 11 “Britons limited to six drinks a day in Ibiza and Majorca on all-inclusive breaks,” Evening Standard, April 29, 2022. And several cities, including Madrid and Barcelona, introduced stricter regulations for private short-term accommodation rental to tourists to protect the long-term housing market. 12 “Barcelona wants to ban renting private rooms to tourists,” Bloomberg, February 5, 2021; “Barcelona takes on Airbnb,” New York Times, September 22, 2021.

These efforts could make tourism more sustainable for the long term. But the industry itself may be adding to conditions that make tourism unsustainable for the local workforce. Seasonality is a major hurdle in this regard. The country’s core tourism destinations have high seasonality, leading to peaks and troughs in employment. Unemployment reaches around 20 percent in the low season (exhibit).

A focus on all aspects of sustainability can improve the sector’s (and the country’s) perception and reputation—and ultimately affect tourists’ willingness to visit.

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What sustainability means for travel and tourism.

Sustainability is becoming increasingly important to travelers. In 2022, Booking.com found that more than 70 percent of global travelers intend to travel more sustainably over the next year (a 10 percent increase on the company’s 2021 survey) and 35 percent said that the sustainability efforts of accommodation and transport providers play a strong role in their booking decisions. 13 Sustainable travel report 2022 , Booking.com.

But what does sustainable travel mean? According to the World Tourism Organization, sustainable tourism addresses the needs of visitors, the industry, the environment, and host communities based on three interdependent factors: 1) social sustainability (respect for the socio-cultural authenticity of host communities, support for local businesses, and levels of tourism that are acceptable to local communities); 2) environmental sustainability (measures to reduce environmental impact and preserve natural heritage and biodiversity); and 3) economic sustainability (business models that achieve economic growth without negatively impacting social, environmental, or cultural aspects of communities). 14 “Sustainable development,” UNWTO website.

By improving environmental and social sustainability, organizations across the travel and tourism value chain can strengthen their business models and reach economic sustainability. Without considering social and environmental factors, economic viability may be difficult to reach or maintain in the long term.

Several countries are taking an integrated approach to tourism development with the goal of becoming more resilient, sustainable, and inclusive. In some instances, this means adapting a country’s tourism offerings to reduce seasonality and the strain it puts on local infrastructure and resources. Increasing visitors in off-peak periods can lead to year-round jobs and businesses. For example, Slovenia has committed to 20 projects to transform mountain destinations into year-round resorts for active holidays outside of ski season. 15 OECD tourism trends and policies 2022, OECD. And Norway’s “Norway all year round” plan aims to spread tourist traffic across several locations and seasons. The plan intentionally does not market Norway as a cruise destination and aims to attract travelers in source markets who are available to travel all year round, and have the means to do so. 16 “Making Norway an all-year-round destination,” Sustainable Tourism in the North website.

Transforming the tourism workforce

New Zealand’s Tourism Industry Transformation Plan begins with a focus on the workforce as the core element of developing a thriving tourism system. The plan paves the way for better experiences for those within the industry as a way to deliver better outcomes for employees, businesses, and visitors.

The plan puts forward new ways of working, for instance, to improve employment standards and practices relating to decent pay and career progression, and to provide fit-for-purpose education and training.

Another innovation “embrace the flux, enable the flex” aims to reframe the tourism industry’s attitude to seasonality. Rather than the peaks and troughs being a barrier to attracting and retaining employees, the industry can use peaks and troughs to its advantage to upskill people, provide consistent employment, and reduce barriers to people holding multiple jobs across the year and across sectors.

One of the initiatives involves collaboration between tourism and conservation employers to help employees maintain stable employment, remain in regions with limited employment offerings, and support the wider community. It also enables tourism employees to gain local conservation knowledge and skills, and those workers can then share their expertise and insights with visitors and increase the value of the tourism offering in the region.

Source: Tourism Industry Transformation Plan: He Mahere Tiaki Kaimahi, Better Work Action Plan, New Zealand Government, March 2023.

Other country-level social and economic sustainability initiatives focus on the tourism workforce. New Zealand recently launched a transformation plan aimed at improving conditions for those who work in the tourism industry, as a basis for transforming the entire sector (see sidebar “Transforming the tourism workforce”).

Travel businesses have also taken steps to reduce the effects of seasonality on the local workforce, for example, by sharing staff. In Geneva, the Ice Castles attraction that has a four-month winter season shares staff with the Lake Geneva Ziplines & Adventures company. This provides extra work and helps to retain staff at both businesses each season. 17 Nathan Andrew, “How to maximize the value of tourism shoulder season,” Blend, August 2021.

The social, environmental, and economic aspects of sustainability are intertwined in global consumers’ perspectives. Booking.com respondents around the world said they chose sustainable options because they wanted to reduce their impact on the environment, have a more locally relevant experience, or believed that sustainable properties treat communities better. 18 Sustainable travel report 2022 , Booking.com.

Spanish respondents held similar views on sustainability as their global counterparts—they are concerned about waste and energy consumption, and 79 percent intend to walk, cycle, or take public transport during future trips. Respect for local communities is important, too, as 68 percent want authentic experiences that are representative of local culture. In addition, 68 percent will go out of their way to avoid popular destinations and attractions to avoid contributing to overcrowding. 19 Sustainable travel report Spain 2022 (Informe Global Sobre Turismo Sostenible 2022) Booking.com.

Considering that in 2019, 45 percent of tourism spend in Spain was domestic, Spanish traveler sentiment is particularly relevant to Spain’s tourism offerings, for locals and international tourists alike. 20 Global travel service data from Oxford Economics.

Globally, hospitality providers may be at risk of not meeting customer expectations around sustainability as there is a gap between what consumers want and what exists in the market. An earlier Booking.com survey spanning 30 countries—Spain being one of them—found that one-quarter of accommodation providers had not implemented any sustainability measures; and for those that had, only one-third actively informed their customers about the measures they had taken—and this usually happened at check-out. 21 Sustainable travel report 2021, Booking.com.

Taking action on sustainability (and actively communicating what has been done) could bridge this gap, attract new travelers, and help Spain’s tourism sector to flourish while doing good for local communities and the planet. Much of McKinsey’s research on sustainability shows that doing well and doing good are not mutually exclusive —these actions reinforce each other. Industry-wide commitment to sustainability could help to differentiate the sector, and respond to consumer needs, thereby increasing the chances of economic sustainability.

How sustainability-related initiatives provide a unique experience

Destinations around the world have demonstrated that environmental and social sustainability initiatives can protect resources and promote local communities—and become flagship projects that garner international recognition and draw visitors looking for meaningful and authentic travel experiences.

• A Dutch partnership between national NGOs and local communities created a new way to maintain beaches without threatening biodiversity. The initiative involved locals and tourists and led to a new certification method, a first around the world. In 2021, Goeree-Overflakkee was awarded the first “Green Beach” certification, and in 2022 became known as the cleanest beach in the Netherlands. 1 “Green Destinations top 100 stories 2022: Together for a new standard in biodiverse green beaches,” Green Destinations website.
• The Greek region of Attica was named the world’s leading sustainable tourism destination in 2022 by the World Travel Awards based on its cultural wealth, natural beauty, modern infrastructure, and the comprehensive plan implemented by the region in order to turn Attica into the first “green” region. 2 “World's leading sustainable tourism destination 2022,” World Travel Awards website.
• Visitors to Hiiumaa island in Estonia usually rely on private cars to visit key attractions. To provide visitors with a lower-carbon mobility option and a more authentic, nature-based experience of the island, a local entrepreneur created an electric bicycle network (including solar power loading stations) which has become popular with tourists and locals. 3 “Green Destinations top 100 stories 2022: Carbon neutral and local, new opportunities in tourism and public transport in Estonian’s green island Hiiumaa,” Green Destinations website.
• In Istria, Croatia, around half of tourists stay in small, private accommodation. Eco Domus is a certification program that teaches private accommodation providers sustainability practices on topics including water, food, health, and light and noise pollution. The aim is to provide better quality, and more sustainable, local offerings. 4 “Green Destinations top 100 stories 2022: Eco Domus, eco-friendly accommodation,” Green Destinations website.

Of course, taking action requires time, resources, and investment. Individual hotels or tourism businesses may have little incentive to redefine core offerings or invest in infrastructure to demonstrate that sustainability is important to them. But businesses that begin to differentiate themselves could reap the benefits. Many destinations in the region provide examples of how sustainable offerings can become a drawcard for visitors, and earn international acclaim and prestige (see sidebar “How sustainability-related initiatives can offer tourists a unique experience”).

The path toward eco-friendly travel in China

Actions to advance sustainability across spain’s tourism sector are emerging.

Spain developed a Sustainable Tourism Strategy 2030, a national agenda to help the tourism sector address medium- and long-term challenges including socioeconomic and environmental sustainability. 22 “Sustainable tourism strategy of Spain 2030,” Spain’s Ministry of Industry, Trade and Tourism. Even though this national sustainability strategy is in place, there are limited mechanisms to help small businesses partake and contribute. This is particularly challenging as small- and micro-sized businesses make up the vast majority of all businesses in the country’s tourism sector. According to Statista, micro-size businesses account for around 92 percent of Spain’s travel, tourism, and hospitality businesses. Small businesses make up just over 7 percent, and medium and large businesses account for the remaining half a percent. 23 Statista, Distribution of businesses in the tourism sector in Spain in 2020 by size, June 2022.

This fragmentation can halt progress and collective action, for instance in emissions reduction. Spain’s large hospitality providers are making efforts to reduce carbon emissions, and many are pioneers in the field: Melia opened Menorca’s first carbon-neutral luxury hotel in 2022, showcasing carbon-neutral operations, “intelligent” energy-efficient buildings, and circular models for water resources. 24 Tom Otley, “Melia opens Villa Le Blanc By Gran Meliá in Menorca, Spain,” Business Traveller, July 20, 2022. Iberostar has committed to becoming carbon neutral by 2030—a target that is 20 years ahead of many other international hospitality brands. 25 “Iberostar will be carbon neutral by 2030, 20 years ahead of the industry’s global target,” Iberostar press release, November 8, 2022.

In general, smaller and medium-size providers’ goals and targets are less ambitious than those of international peers, presumably because the economic benefits of such actions are unclear, or they may fear first-mover disadvantages like higher costs. Various Spanish hotel chains have committed to reducing emissions by 20 to 35 percent, with timelines ranging from 2030 to 2035. By comparison, many international brands have committed to net zero by 2050 and have strict measures in place to achieve this.

According to the Greenview Hotel Footprinting Tool, which calculates the carbon footprint of a hotel stay anywhere in the world, Spain is among the best-performing countries in terms of low-carbon room footprint and meeting footprint. While this tool points to a strong focus on water-, waste- and emissions-reduction in Spanish hotels, it is difficult to assess what actions many smaller hotels and other tourism businesses are taking on the sustainability front.

Sustainable tourism in Valencia

Valencia claims to be the first city in the world to track the carbon footprint of all tourism activities in the city and has committed to achieving carbon-neutral tourism by 2025. 1 “Valencia becomes the first city in the world to verify and certify the carbon footprint of its tourist activity,” Valencia Tourism official website, July 10, 2020.

Valencia’s official tourism website features sustainable tourism as a key element and makes sustainable offerings visible. For instance, the website encourages visitors to reduce emissions by taking public transport or traveling by bicycle and to support the local economy by shopping at smaller, local stores. It also offers tips on how to be a “responsible tourist who is committed to the environment at all times” such as using energy and water sparingly, recycling, reducing plastic, and respecting local residents.

In this way, the city has positioned itself as “the city taking care of the planet” and made sustainability its differentiating factor.

Even though there may not be concerted and unified action on social and environmental sustainability across the sector, success stories exist of initiatives being put in place that make sustainability a key differentiator (see sidebar “Sustainable tourism in Valencia”). Sector-wide efforts could increase investment into sustainable offerings, make these more visible to tourists, and ultimately position Spain as the destination of choice for sustainable travel.

How Spain could become a sustainable destination of choice

Individual travel and tourism businesses’ environmental and social sustainability efforts need to achieve critical mass if Spain is to become known as a leading destination for sustainability-conscious travelers. These actions are also vital to preserve the sector’s economic sustainability. Collective and concerted action is required to build momentum. All stakeholders have a role to play in addressing the sector’s rationale for action, setting a clear course, and developing the support structure to achieve it.

Identify the value at stake. The sector could take a high-level view to evaluate the status quo, benchmark where Spain could be, and quantify the costs and benefits of prioritizing sustainability throughout the sector, at scale. All stakeholders including policy makers, government, and industry could jointly develop a sustainable travel concept for the sector with a clearly articulated justification for action.

Costa Rica provides an example of a national tourism strategy focused on sustainability. The industry is aligned with national objectives to protect the country’s forests and biodiversity. National parks, nature reserves, and protected areas make up around one-quarter of Costa Rican territory and the sector promotes ecotourism and sustainable offerings that support the conservation of these areas. 26 “Costa Rica, a country committed to the environment,” Aquae Fundacion, July 6, 2021.

Spain’s stakeholders could also agree on industry-wide standards, as having these in place would likely accelerate the transition to sustainable tourism. Standards that align the motivations of different stakeholders and take into account the interests of all parties have a greater chance of adoption. For example, including mandatory sustainability criteria in the hotel star rating system could bring the motivations of hotel owners and operators into alignment. 27 “The path toward eco-friendly travel in China,” McKinsey, March 14, 2023. Setting unified sector sustainability targets could also boost the credibility of sustainability claims or commitments made by individual businesses.

Define a strategy. This includes establishing initiatives to address specific concerns such as decarbonization, water usage, waste management, or overcrowding and setting targets and practical actions to achieve them. For instance, one initiative in Costa Rica—as part of its conservation effort—is a ban on single-use plastic in national parks, biological reserves, and national monuments. 28 “Costa Rica, a country committed to the environment,” Aquae Fundacion, July 6, 2021.

In another example, Iceland set a strategy to reduce seasonality—a long-standing challenge for Icelandic tourism. In 2010, close to half of travelers visited the country during the summer months of June, July, or August. The travel industry, with support from the government and others, launched an international marketing campaign to promote Iceland as a year-round destination. Winter activities such as viewing the Northern lights, snowmobiling, and glacial treks became popular with visitors. Between 2010 and 2019 the share of tourists that visited in summer fell from around 50 to 34 percent, while tourist arrivals continued to grow. 29 Icelandic Tourist Board, Isavia, visitor departure statistics.

Once the strategic direction is set, sector-wide initiatives can be put in place. In New Zealand, a collaborative and concerted effort involving public and private organizations gave rise to the Tiaki Promise, a pledge that encourages visitors to take care of the country’s natural resources: “While traveling in New Zealand, I will care for land, sea, and nature, treading lightly and leaving no trace; travel safely, showing care and consideration for all; and respect culture, traveling with an open heart and mind.” One collaborator in the initiative, Air New Zealand, released an in-flight safety video that introduced the promise to travelers. 30 Kresentia Madina “The Tiaki Promise encourages tourists to care for New Zealand’s nature,” Green Network, August 26, 2022.

It is also important to rank individual measures to address challenges to ensure that competing priorities do not hinder progress. Collective action will have the most impact if all stakeholders are committed to the same issues.

Many travel and tourism businesses across the world have developed and successfully marketed sustainable products and services, such as low-impact tourist offerings that are less harmful to the environment or local communities. In fact, many travel guides publish editions dedicated to sustainable offerings. 31 Examples include Fodor’s Green Travel: The world’s best eco-lodges and earth-friendly hotels and Lonely Planet’s The sustainable travel handbook . Spain’s tourism providers could follow suit. And the sector could make travelers more aware of existing sustainable travel options through communications campaigns to draw sustainability-conscious travelers from across the globe.

Travel and tourism businesses could also extend sustainability efforts across their value chains. Examples include working with suppliers to ensure linen and towels are sustainably produced, procuring energy-efficient equipment, or engaging local communities by sourcing local food suppliers. There are also opportunities for businesses to collaborate and design sustainable offerings that combine products and services, such as sustainability-focused tours featuring carbon-neutral accommodation, electric ground transportation, and trips to local businesses.

Globally, hotel chains have partnered with sustainability-related businesses or action groups to advance their own sustainability initiatives. These actions also help to strengthen the hotel’s brand and reputation for sustainability consciousness. For instance, the luxury hotel, resort, and spa operator Six Senses partnered with the United States Coalition on Sustainability and the action platform SustainChain in an initiative to remove single-use and disposable plastics from its operations. 32 “Six Senses is the first hospitality brand to partner with the United States Coalition on Sustainability and SustainChain,” Six Senses press release, April 26, 2021. And as part of its pathway to net zero, the Radisson Hotel Group partnered with Ecovadis, a sustainability ratings provider, in a collaboration that aims to extend the EcoVadis rating to the group’s global supply chain. 33 “Radisson Hotel Group increases focus on supply chain sustainability; announces partnership with Ecovadis,” Radisson Hotel Group press release, December 16, 2021.

Spanish tourism and hospitality providers might consider similar collaborative partnerships and initiatives to build momentum for industry-wide action and raise global travelers’ awareness that Spain is committed to sustainability.

Provide guidelines and support. Smaller businesses may lack the knowledge or resources necessary to act on sustainability. Actions could be taken to bridge knowledge gaps and secure funding, at government or industry association level. Funding programs, incentive schemes, or financial instruments can accelerate adoption of sustainable solutions, especially for smaller businesses. For example, South Africa’s Green Tourism Incentive Program targets small tourism businesses like lodges and guest houses. The program funds water- and energy-efficiency assessments and recommends the optimum green solution for the business. The bulk of the cost to implement the solution is also funded by the program. 34 “The Green Tourism Incentive Programme,” Industrial Development Corporation, October 4, 2021.

The industry could also draw on available resources and convene stakeholders to share knowledge and expertise. For instance, the World Tourism Organization provides resources and guidelines for building a circular economy, reducing food waste, and tackling plastic pollution. 35 “Sustainable development,” UNWTO website.

Regulation could be put in place to support change. Regions or cities could look to establish regulations that ensure tourism activity is environmentally and socially sustainable. Progress has been made in this regard, as the Law on Circularity and Sustainability in Tourism, approved by Parliament in May 2022, made the Balearic Islands the first sustainable destination by law. 36 “Balearic Islands, sustainable tourism is now a law,” Excellence Magazine, June 21, 2022. This regulation protects seasonal tourism workers, considers local residents’ quality of life (for instance by blocking an increase in the number of beds for the next four years), reduces waste, and protects natural resources. It will also introduce a hotel classification system based on the concrete actions taken to promote sustainable tourism.

Regulatory bodies and industry associations could also support business owners with guidance, encourage implementation through incentives, and enforce regulations through penalties for non-compliance.

Spain’s tourism sector has an opportunity to further develop existing sustainability efforts, thereby protecting the future of the sector. A sector-wide focus on environmental and social sustainability can also act as a key differentiator and draw visitors who are consciously trying to travel more responsibly. Furthermore, all stakeholders could benefit if existing initiatives, and new investments, are made more visible and attractive to tourists.

Javier Caballero is a partner in McKinsey’s Madrid office, Margaux Constantin is a partner in the Dubai office, Steffen Köpke is a capabilities and insights expert in the Düsseldorf office, and Daniel Riefer is a partner in the Munich office.

The authors wish to thank Lisa Kropacek for their contribution to this article.

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Signs of strength in Spain’s tourism industry

Tourism ended this year’s summer season in great shape with international tourist arrivals coming very close to the records set in 2019, a year that was extremely positive for the industry. Domestic tourism has also continued to post very good figures. However, the macroeconomic scenario represents a risk for the trend in tourism activity over the coming quarters due to high inflation and the economic slowdown in Europe. Nevertheless, we believe that tourism demand still enjoys significant levers for growth in the coming year and we therefore expect the sector to complete its recovery in 2023.

The situation in the tourism industry has altered dramatically. After an extremely difficult 2020 and a 2021 in which the recovery was far from satisfactory, 2022 has categorically confirmed that the sector continues to be a driver of growth for the Spanish economy. Official business indicators published by Spain’s National Statistics Institute (INE) point to the fact that, this summer, real tourism demand (without the price effect) was very close to the figure recorded in the same period of 2019. Total overnight stays in hotel and non-hotel accommodation during the months of July, August and September were just 1.3% below those of summer 2019. These good figures were further cemented by dynamic domestic tourism, whose volume of overnight stays was 6.6% higher than in 2019. However, this figure was slightly down on the one posted in the summer of 2021, probably due to an increase in trips abroad thanks to the recovery in international travel. For its part, international tourism performed much better than in 2021, reaching a level of overnight stays just 5.9% lower than in 2019.

Tourist overnight stays

If we look at which countries lie behind this strong recovery in international tourist arrivals in recent months, we can see some interesting trends. Based on passenger data for flights operated in Spain (see the table below), we note that improvements in tourist arrivals from the EU have been key. The figures are still 9% below those of 2019 (coming from –42% in 2021), mainly due to the saturation problems experienced at northern European airports. 1 The impact of this saturation can be seen most clearly in UK passenger arrivals which, in the summer, were 14% below those of the same period in 2019. The situation appeared somewhat similar for arrivals from Germany, with numbers still 15% lower, but this was not the case for arrivals from countries with less saturation, such as France and Portugal. It should be noted that the sharp drop in the number of passengers from countries under the «Rest of Europe» heading since Q2 2022 reflect the cutting of air connections with Russia since the start of the war in Ukraine, although this decline is not noticeable in the overall figure due to its small relative weight.

On the other hand, 2022 has also been a turning point for long-haul tourism. After the extremely low number of arrivals in 2021, the most recent figures for 2022 are highly positive for tourism from the Americas, and particularly from Latin America. We therefore anticipate that, looking ahead to 2023, the recovery in non-European international arrivals will be one of the key levers of growth. This will also mean the return of the emerging markets prior to the pandemic, which were the ones offering the greatest growth potential for some Spanish tourist destinations.

• 1. See the article «Europe’s saturated airports: a brake on the summer’s recovery», in this Sector Report.

This good performance by tourism demand is surprising because of two factors: it has been achieved in an environment of sharp price rises and also a loss of purchasing power among consumers throughout the EU. Tourism prices were no exception, reaching record highs during the last summer season . Consequently, for the time being it seems that the tourism sector has been able to raise its prices without too much impact on demand.

Although tourism prices have responded to the rise in production costs, according to our analysis the increase seen in prices has been mainly due to the strong recovery in international demand which, together with domestic demand, filled the market in many Spanish tourist destinations. This has been the case in the hotel sector, achieving occupancy rates above 80% in a third of the more than 100 tourist municipalities analysed by Spain’s National Statistics Institute in its hotel occupancy survey. CPI accommodation prices were more than 17% higher than those recorded in summer 2019 and this situation can also be seen in other prices related to tourism, such as hospitality and air travel, as shown in the chart below.

Trend in tourism-related prices of the CPI

Looking ahead to the next few months, the indicators for interest in travelling to Spain we produce based on Google search results have remained dynamic, albeit somewhat less «euphoric» for European tourism. The interest indicator places searches from the United Kingdom and EU within the benchmark range, 2 which is very good news given the economic situation in Europe, especially in the United Kingdom with sharp increases in inflation and an economic slowdown, in addition to the depreciation of the pound for British tourists. Given this situation, one would expect a decline in interest in travel from European countries, something which is not being observed, however.

Also noteworthy is the fact that interest in travelling to Spain seems to have returned to normal in the US market since March and, more recently, the interest of Japanese tourists appears to be picking up , after remaining at very depressed levels until last June. This is highly relevant since it suggests that two of the most important outbound markets (USA and Canada, Japan and Korea) that generated the most growth in the tourism sector before the pandemic, in the absence of the Chinese market, might recover throughout the course of 2023.

• 2. The benchmark range is constructed from searches recorded between 2017 and 2019.

The data point to recovery throughout the course of 2023 in two of the fastest growing pre-pandemic outbound markets (USA and Canada, Japan and Korea)

Weekly searches in Google for trips to Spain

The current scenario is difficult to interpret: It looks very positive judging by the recent trend in all indicators, both official and internal and also high-frequency, but negative due to the macroeconomic outlook of the outbound countries. Nevertheless, our forecast for 2023 remains positive, supported by the levers for growth we continue to see for the sector and tourism demand’s limited exposure to the macroeconomy.

•  Improved air travel in northern Europe: tourist arrivals from northern Europe were trapped by a growth ceiling due to airport saturation in the summer  (the figures for the United Kingdom and Germany, for instance, are about 20% below their pre-COVID air travel level). This situation should adjust in the coming quarters and could lead to a considerable improvement in international travel by European tourists. 3
• High potential and great room for improvement in long-haul tourism: indicators point to the improving trend in long-haul tourism continuing over next few quarters. The room for improvement is still significant, with US tourist arrivals 20% below their pre-COVID levels and Korean and Japanese tourist arrivals more than 70% below.
• Low exposure to the macroeconomy: according to the sensitivity analysis we carried out in order to understand how declines in economic activity in outbound markets correlate with declines in tourism demand for Spain, we estimate that the tourism sector has only limited exposure to the economic slowdown in Europe. Specifically, we estimate that the drop in economic activity in the United Kingdom (GDP is expected to fall by 1.3% in 2023) will impact annual growth in British overnight stays by –2.9 percentage points. For Germany (GDP is expected to fall by 0.2% in 2023), we estimate an impact of –2.2 percentage points of growth in overnight stays. 4 These impacts, which are certainly appreciable, are nevertheless relatively small compared with the margin for growth enjoyed by both the United Kingdom and Germany thanks to the improvement in airport saturation.

Taking all this into account, our tourism GDP forecast for 2022 stands at 98% of its 2019 level ; i.e. just 2% below its pre-COVID level and 66% above the figure for 2021. It should be noted that we expect the sector’s dynamism to be somewhat weaker in Q4 this year as the economic difficulties faced by the EU are felt, albeit to a limited extent. However, we expect tourism activity to pick up strongly from Q2 2023 onwards, as well as some improvement in the economic tone of the EU, so we have placed our tourism GDP forecast 2% above the 2019 level of activity for the whole of next year .

• 3. See the article «Europe’s saturated airports: a brake on the summer’s recovery», in this Sector Report.
• 4. For each outbound country, we have estimated the linear sensitivity of the growth rate in hotel overnight stays to the year-on-year growth in that country’s GDP. To calculate the impact of our macroeconomic scenario on growth in tourism demand, we use the difference between our most recent growth forecast for each country and that of our counterfactual scenario (we have used our February 2022 scenario, prepared before the outbreak of the war in Ukraine).

Our tourism GDP forecast for 2022 is just 2% below its pre-COVID level and 66% above the figure for 2021.

Tourism GPD

Although the outlook is positive, we can only repeat the mantra that we are currently going through a time of great economic uncertainty. In the case of the tourism sector, the main source of uncertainty is related to costs , so managers of tourism firms will have to be vigilant in order to tackle any possible deviation from what has been budgeted for 2023. For the time being, the upturn in costs in 2022 is being handled without any major tensions in the sector as a whole, thanks to the significant increases in tourism prices we have seen. This has been very effective in combating the rising energy costs (which have more than doubled compared with the previous year), the cost of agrifood products (whose prices rose by 12% year-on-year in September) and renovation costs (with construction materials 16% more expensive than a year ago at the end of July).

Looking ahead to 2023, we expect production costs to remain high and, in some cases, to continue rising. There is also the potential impact from wage increases which, although they are expected to be contained, are the main cost for tourism businesses (on average, companies in the sector spend 21% of their revenue on wages), as can be seen in the next chart. As a result, if the sector wants to go on defending its margins, it will be forced to continue to raise prices.

The upturn in costs in 2022 is being handled without any major tensions in the sector as a whole, thanks to the significant increases in tourism prices we have seen.

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Spain's economy is thriving: Why it's growing more than its EU rivals

The Spanish economy is thriving, with tourism, domestic spending, and investment set to continue propelling growth this year.

Spain's economy is witnessing a positive momentum, outshining its European peers with robust growth figures, buoyed by a healthy domestic consumption and a strong investment climate.

Spain's IBEX 35 Index has reached its highest point since May 2017. Additionally, Spanish house prices rose by 4.2% in 2023, well above the pace seen in other European markets.

In the final quarter of 2023, the Spanish economy advanced at 0.6% annual pace, following a 0.4% expansion in the preceding period. This growth surge was predominantly powered by resilient domestic demand, defying persistent inflationary pressures and elevated interest rates.

• Energy prices push Spanish inflation higher in March: Cause for ECB concern?
• Spain's economy expands: Why is it beating its European peers?

Remarkably, Spain's growth trajectory far surpassed the eurozone and EU averages, both stagnating at 0%. Moreover, Spain witnessed one of the strongest increases in new employment in Europe during the fourth quarter of 2023, trailing only behind Romania (+1.5%) and Malta (+1.4%).

Retail sales in the Iberian nation soared by 1.9% year-on-year in February 2024, marking the 15th consecutive annual increase. However, while Spanish inflation has notably retreated from the double-digit rates seen in 2022, it still hovers significantly above pre-pandemic levels.

Despite a reduction from the double-digit inflation rates seen in 2022, Spain's inflation remains above pre-pandemic levels.

In March 2024, Spain's consumer price inflation rate rose to 3.2% year-on-year, aligning with market projections and edging up from February's six-month low of 2.8%. Yet, the core inflation rate, excluding volatile components such as food and energy, tapered to 3.3%, the lowest level since February 2022.

Assets surge: Bonos-Bund spread falls below 10-year average

On the financial front, Spanish assets are basking in a period of remarkable performance. 

The IBEX 35 Index, comprising the 35 largest Spanish companies by market capitalisation, surged by approximately 11% in March, marking four consecutive weeks of gains and scaling heights not witnessed since May 2017.

Furthermore, the spread between Spain's 10-year Bonos and German Bunds hovered around 85 basis points by the end of March, after touching lows unseen since February 2022 and dipping below its ten-year average.

• Spain’s digital nomad visa one year on: How are remote workers and locals getting along?
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Meanwhile, ING economist Wouter Thierie noted that Spanish house prices saw an average increase of 4.2% in 2023, bucking the trend observed in many eurozone countries where average house price growth was negative last year, largely as a consequence of rising interest rates.

"There is room for further price increases due to falling variable interest rates, especially if the ECB starts cutting interest rates later this year. In addition, a growing number of Spanish households will also contribute to tightness in certain regions, which will support house price growth this year," Thierie wrote.

Moody’s revises Spain’s outlook to positive

Spain's overall economic momentum prompted Moody's to revise the outlook on the Government of Spain to positive from stable in March, maintaining a rating of Baa1.

The rating agency highlighted Spain's low private sector leverage, a strong banking sector, a current account surplus, and an improved labour market as key strengths. However, it also pointed out Spain's challenges, such as a higher debt burden and structural issues like an ageing population, which could impact fiscal stability.

According to the latest Eurostat estimates, Spain's economy is projected to grow by 1.7% in 2024 and 2% in 2025, surpassing the European Union's average of 0.9% and 1.7%, respectively.

Eurostat emphasised that consumption and investment will be the primary drivers of economic expansion this year, with private consumption buoyed by real income gains and the utilisation of accumulated household savings, while investment growth will be supported by the broadening implementation of the Recovery and Resilience Plan.

On the inflation outlook, Spain is anticipated to see a moderation, with an average headline inflation of 3.2% for the year, slightly above the European Union's average of 3%. Spanish inflation is expected to decline to 2.1% in 2025, falling below the averages for both the European Union (2.5%) and the euro area (2%).

Despite the underlying price pressures trending downwards, the gradual removal of government measures aimed at mitigating high energy prices might temporarily push inflation upwards.

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Spain Tourism Revenue

• Spain's Tourism Revenue reached 6 USD bn in Jan 2024, compared with 6 USD bn in the previous month
• Spain's Tourism Revenue data is updated monthly, available from Jan 1993 to Jan 2024
• The data reached an all-time high of 11,937 USD mn in Jul 2023 and a record low of 0 USD mn in May 2020

View Spain's Tourism Revenue from Jan 1993 to Jan 2024 in the chart:

What was Spain's Tourism Revenue in Jan 2024?

Spain's Tourism Revenue reached 6 USD bn in Jan 2024, compared with 6 USD bn in the previous month See the table below for more data.

Tourism Revenue by Country Comparison

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Positive outlook for tourist sector in Spain in 2024

Posted By: The Corner 11th April 2024

Caixabank Research| The tourism sector has had a strong start to 2024. International arrivals in February were 15.9% above the same month of 2019, while international tourist expenditure attained a level 26.7% above that of February 2019. Demand for tourism services is holding up despite the strong increase in tourism related prices: CPI hotel prices in February increased by 9.0% year-on-year, attaining a level 32.2% above the same month of 2019. Tourist arrival figures in February were boosted by stronger tourist flows from the Americas (up 26.9% with respect to February 2019) and by tourism from the EU (up 17.7% with respect February 2019).

On the domestic side, following resilient figures last summer, overnight stays by residents in tourist accommodations rose by a solid 4.4% year-on-year in February, landing at a level 0.02% above February 2019. Looking ahead, we expect robust rates of growth in low season and more modest growth in high season, both from high levels.

The current account surplus keeps improving. The current account registered a 2.8% of GDP surplus in the twelve months to January 2024, 0.2pp above the 2023 figure and the largest surplus since December 2017. Compared to the 2023 figure, the 0.2pp improvement can be attributed to a 0.05pp improvement in the balance of non-energy goods and a 0.1pp improvement of the income balance, the latter possibly driven by the slight decline in market interest rates since October 2023. Following twelve years in a row of current account surpluses, the deficit in the net international investment position, a traditional weakness of the Spanish economy, has almost halved, from c.100% of GDP in 2012, to c.53% in 2023.

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IMF raises 2024 GDP growth forecast for Spain to 1.9% from 1.5%

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Haiti's government formalized the creation of a nine-member transitional presidential council on Friday, a long-delayed move intended as the first step in restoring security to the gang-ravaged Caribbean country.

Spain's GDP per capita stays below EU average and pre-Covid level

I n 2023, Spain reached a Gross Domestic Product (GDP) per capita expressed in purchasing power standards equivalent to 89% of the EU measure (100), after reducing the gap with the EU-27 by three percentage points  compared to 2022. However, it is still below the level of 91% corresponding to 2019, the last year before the impact of the Covid-19 pandemic.

According to Eurostat data, Spain would be the sixteenth country in the EU taking into account the criterion of GDP per capita expressed in purchasing power standards, 11% below the EU-27 average and 15% of the estimate for the eurozone.

Despite the gradual improvement in recent years, after having fallen to 83% in 2020, Spain would still be below the level of 91% in 2019, before the pandemic, and very far from the 105% maximum recorded in 2006, before the global financial crisis. In fact, between 2002 and 2009, Spain managed to maintain an income level based on purchasing power above the EU average.

The most outstanding results

The EU statistical agency highlights the "substantial differences" observed in 2023 among EU countries, as Luxembourg and Ireland had the highest levels (140% and 112% above the EU average, respectively), well ahead of the Netherlands (30% above the EU average), Denmark (+28%) and Austria (+23%). In contrast , Bulgaria recorded the lowest GDP per capita, 36% below the EU average, followed by Greece (-33%) and Latvia (-29%).

In its analysis, Eurostat warns that Luxembourg partly owes its high level of per capita income to the large share of cross-border workers in total employment, who contribute to GDP, but are not taken into account as part of the resident population when calculating GDP per capita.

Likewise, in the case of Ireland, the high level of GDP per capita can be explained in part by the presence of large multinationals that own intellectual property, whose activity contributes to the GDP, although a large part of the income is returned to the companies' final owners abroad.

These are the results for each country: