“No matter what happens to you tourism sector “It will determine what will happen to Spain” Bank of Spain Governor Pablo Hernández de Cos, in a presentation attended by hundreds of professionals from the industry at the HotusaExplora tourism innovation forum in Madrid this Monday. “HE tourism This is the main sector of national production.” That is why the Bank of Spain analyzes the development, challenges and risks of the tourism industry.
Tourism has been confirmed as the economic engine of Spain in the last two years. After the total collapse due to the pandemic, its strong revival has made the tourism industry responsible for 77% of the entire growth of the Spanish economy in 2022, with the tourism sector accounting for nearly a third of the tourism sector, according to initial estimates of the Bank of Spain. Increase in national GDP in 2023.
“HE The growth of the Spanish economy in the coming years will largely depend on the development of the sector.. And maintaining the recent positive dynamism will require improving the competitiveness factors of the tourism sector, which has managed to increase revenue and profits well above pre-pandemic levels, amid a boom in demand from national and international travelers. Spain identifies key risks for which alarm signals should be raised to guarantee healthy growth of the sector.
Economic slowdown
Companies in the sector and different analysis houses and Administrations predict this. Growth will continue in 2024, but this will depend on the development of global demand and especially European demand.In a period when the outlook for the international economy and the Spanish economy in general predicts a slowdown and expectations may worsen further
“Risks to economic growth remain downside “First of all, as a result of geopolitical developments,” he warned. Hernandez de Cosreferring to the wars in Ukraine and the Middle East. But geopolitical tension could also benefit Spain by diverting the attention of tourists who have been discouraged from going to rival destinations in North Africa due to perceived insecurity. “Spain traditionally receives a dividend for greater stability in times of geopolitical uncertainty.”
labor shortage
The tourism industry is recording Employment records in full activity boom. Over the past year, month by month, they marked: Historical records in the number of Social Security contributors. However, tourism companiesProblems attracting and retaining employeesin the context of the shortage of workforce willing to enter the sector.
“Recently, labor availability issues have gained weight among the concerns of businessmen in the sector,” the Bank of Spain governor said. According to the supervisor’s latest Business Activities Survey for the last quarter of 2023, Labor shortage is perceived by 42.5% of companies as a factor that negatively affects their operations. And the rate is clearly higher in the hospitality sector and the transportation sector, where 55% and 51% of companies are concerned respectively.
The Bank of Spain emphasizes that this situation highlights “the need to improve active employment policies” to promote employability. Therefore, “continuous monitoring of the capacity of migration policies to effectively alleviate imbalances” in the labor market and “policies that support the supply of rental housing to encourage mobility Number of workers across regions.
Sensitive to increases in SMI
The tourism industry is “highly employment intensive”. On the one hand, a feature that allows: The sector is less vulnerable to increases in intermediate goods prices (like energy), but on the other hand this means it is “more vulnerable to knock-on effects through wage increases”.
Moreover, This tourism “It is one of the sectors where the density of employees in young and low-skilled groups is higher.”Hérnández de Cos said this makes him “more sensitive to minimum wage increases, which have been significant in recent years.” The government and unions agreed to increase SMI by 5%, up to €1,134 per month in fourteen payments. Since 2018, the minimum wage has increased by 54%, including the new increase, meaning employees receive 5,573 euros more per year.
Small Business Battalion
The tourism sector, like the Spanish economy as a whole, is characterized by:r “dominated by SMEs with many small companies and a few large companies”. It is not harmless that an industry that is vital to the entire national economy is dominated by a group of small businesses. Business size is important because it relates to the determinants of business productivity, given that smaller companies have greater difficulty in exploiting economies of scale, fostering innovation, accessing various sources of financing and investing in “continuing training of workers”. ”.
Prepare for climate change
Bank of Spain underlines enormous challenge facing entire sector consequences of climate change and, in parallel, the impact on energy activities and outcomes of policies that promote the inevitable energy transition. “Spain is exposed to physical risks [vinculados al cambio climático]”This situation is further emphasized by the significant weight of the sun and beach sector, which increases the climatic dependence of the tourism sector, and the negative externalities caused by saturation in some destinations,” he said.
“The nature of these challenges An assertive and coordinated response between the public and private sectorsAs an organization that has persistently focused on improving the quality and diversification of the tourist offer, which has been observed in recent years, he noted that “this will allow us to reconcile the generation of income with the reduction of environmental pressure and saturation in some regions.”
Impact of new technologies
The use of new technologies has become increasingly widespread among a wider audience,A shake-up in the industry’s consumption and marketing styles They also allow for the expansion of remote working – particularly travel agencies now converted to digital platforms – which “could blur the distinction between leisure and business travel, increase the average length of stay and reduce the seasonality of travel tourism.”
Companies are forced to adopt new technologies and there is a risk of under-investment in innovation. “The public sector can alleviate this problem through various tools. “Among these, tax incentives for innovative companies stand out,” said the Bank of Spain, warning that the effectiveness of these incentives will increase if measures are taken to support innovative companies in their initial stages.
Regulatory abundance
A regulatory environment with a multitude of regulations that are increasingly complex and vary between regions and municipalities may negatively impact companies’ growth decisions, among other things and in market unity,” warned Hernández de Cos. And “various regulatory thresholds in labor and tax – associated with arbitrary levels based on the size of companies – negatively impact job growth.”