Tourism in Spain could be the remedy for unemployment

Tourism in Spain could be the remedy for unemployment

Although Spain still grapples with the second-highest unemployment rate in the EU, joblessness fell to 20 percent in the second quarter of 2016, the lowest in seven years. The success of its tourism industry pulls much of that weight.

A vital economic pillar, tourism accounts for about 11 percent of GDP and over 15 percent of all jobs in Spain. One of only three countries home to both Mediterranean and Atlantic coastlines, its tourist trade brought in a whopping 67.4 billion euros last year, up 6.8 percent from 2014.

As the third most visited country in the world and the second most visited country in Europe after France, Spain’s appeal to tourists is undeniable. Tourism has sparked growth, particularly in the Balearic Islands, where nearly a third of employment and over half its economic output relies on this sector.

Long a magnet for holidaymakers, Spain welcomed over 68m international tourists last year, marking its third consecutive year of record-beating numbers and a 5 percent increase from 2014. With the likely arrival of 74m people this year, according to Madrid-based agency Exceltur, this trend is expected to persist, as Spain’s tourism sector braces itself for a fourth record year.

The anticipated boom follows the outstanding performance already witnessed during the first half of this year: the number of foreigners visiting Spain was up 12 percent over the same period last year. This translates into 33bn euros in revenues, an 8 percent increase year-over-year.

Terrorism in traditional destinations

Ensuing a series of recent attacks, tourists are shying away from once traditional summer hotspots like Egypt, Turkey, and Tunisia and instead opting for the safety and sun of the Spanish coasts. A busier season than usual should translate into a much needed jobs surge. Employment agencies are predicting a 13 percent rise in temporary hires over the summer, which pushes the unemployment rate further down.

tourism in spain 3

Source: Google public data explorer and Eurostat

Barcelona, Spain´s favourite destination among foreigners, has already welcomed nearly 8m visitors during the first half of 2016. Barcelona Mayor Ada Colau’s administration recently introduced a moratorium on new hotel accommodation, and further considers imposing a “tourist tax” on visitors, with earnings designated for other sectors in order to diversify the benefits.

Looking beyond the summer season, tourist experts have long attempted to endorse Spanish attractions and culture beyond its sunny beaches, such as the historic cities of Salamanca and Toledo. Home to some of the world’s most important monuments including the Great Mosque in Cordoba, City Walls of Avila and the Cathedral in Santiago, Spain is one of the countries with the highest number of World Heritage Sites. As one of the world’s top destinations in terms of spending, Spain’s tourist sector looks poised for another great year.

Categories: Economics, Europe

About Author

Itziar Aguirre

Itziar currently works as a Research Consultant at JLL, a commercial real estate capital intermediary. She holds an MBA in Accounting and Finance from the University of St. Thomas and an MSc in Comparative Politics from the London School of Economics.