Reactivation in tourism is driving a surge in demand from both domestic and international travelers, pushing industry momentum to a rapid pace. Prices are rising, and the year is off to a strong start. Easter weekend set a positive tone, signaling a potential peak year as the sector recovers to pre-pandemic activity levels observed last year.
Tourism GDP, based on newer, improved forecasts, is projected to reach a record level of 172,200 million euros for the full year, marking an 8% rise from the previous year and a 9.4% increase above levels before 2019. A coalition of the thirty largest tourism players, including companies like Meliá, NH, Iberia, Globalia, Riu, and Amadeus, stands as a powerful lobby backing this momentum. These developments reinforce tourism as a key driver of the national economy, with tourism contributing around 12.3% of the entire GDP.
The price increases across the sector contribute to this dynamic. When adjusting for these price changes, the sector’s real GDP remains slightly below pre-pandemic levels at about 1.9% less, while forecasts for the year indicate prices rising roughly 11% above 2019 levels overall, according to Exceltur’s research service.
In recent years, the self-driven growth of Spanish travelers who expanded domestic trips during the pandemic has underpinned the recovery. Today, demand from international visitors is becoming the main pillar supporting the rebound. Industry and government anticipate foreign arrivals to reach an all-time high this year, potentially surpassing the pre-pandemic international record of 83.7 million arrivals set before the Covid-19 disruption in 2019.
Price increase
Tourism companies report notable surges in turnover driven by the revival in activity and ongoing price increases amid inflation. The sector, which raised its average prices by 7.7% in the first quarter, expects further revisions with hikes of 3 to 4% through the end of the year.
“Fortunately, companies can adjust prices accordingly,” notes Exceltur Vice President Jose Luis Zoreda, who views rising interest rates as a signal of positive sector momentum. For the lobby, price increases respond to higher costs from inflation, the repositioning of higher-quality, value-added offerings at premium levels, and the need to meet the expectations of groups seeking enhanced services. This also supports debt service accumulated during the pandemic.
Despite stronger sales and higher prices, Exceltur remains cautious about profitability. Demand has grown, yet many enterprises do not see a corresponding rise in profit margins due to the sharp rise in operating costs driven by inflation. Industry leaders emphasize that companies can pass through only a portion of their escalating costs to customers, with about 20% of cost increases reflected in prices.
Industry forecasts indicate that energy costs for tourism firms in the first quarter of 2023 remained elevated, rising by 17.4%, while the cost of other materials climbed 14.3% and salary costs by 7.8%. Separately, data from the National Institute of Statistics show the sector’s average price increase at 7.7%.