Spain’s Tourism Sector Posts Record Growth Amid 2023 Recovery
Spain finished 2023 with a historic rebound as the tourism industry emerged from the pandemic downturn. The sector benefited from a surge in domestic demand and international travel, pushing activity to new highs and lifting prices across the board. This rapid expansion also translated into improved employment, with more and better jobs reported by companies in the sector.
By year end, the sector added 95,224 more jobs compared with 2022, representing 17 percent of all new employment across the economy. During July, the peak of the summer season, the country reached a new milestone with more than 2.8 million Social Security contributors across various tourism activities in a single month. Leading Spanish tourism groups have since stressed not only strong job creation but also the quality of those roles, noting stability and higher wages compared with other sectors.
Exceltur, the industry lobby that includes nearly thirty major companies such as Meliá, NH, Iberia, Globalia, Riu, and Amadeus, highlighted in its latest quarterly report a fall in temporary employment to historic lows and a widespread shift toward permanent contracts, which now exceed 90 percent of total employment. The association’s vice president, José Luis Zoreda, described the improvement in employment quality as significant.
The reform of labor rules contributed to a sharp drop in temporary contracts, with only 8 percent of such arrangements recorded in the year. The rate had stood at nearly 35 percent in 2019 but contracted sharply in the following years as other sectors also adjusted. Permanent contracts became the norm, surpassing 91 percent of total contracts, though many are permanent but not continuous throughout the year.
The stability in tourism recruitment is explained by a shift to full time indefinite contracts, which rose by about 60,000 compared with 2022, and a sizable increase in part time arrangements, about 32,000, along with a greater number of temporary permanent contracts, roughly 6,000 more. Data from December show that almost half of those with indefinite contracts work full time, and a note of caution was added about temporary contracts that had once been more common in the past. The overall picture points to a stronger, more stable workforce in the sector.
Salary Increases
Wages in tourism rose again, even in an inflationary environment that posed challenges for wage discussions. The sector reported a 4.4 percent year over year increase in total compensation, with deals for 2023 showing a 3.9 percent rise, both of which outpaced several other industries. The industry lobby stated that tourism has made a concerted effort to protect workers purchasing power while attracting and retaining talent in a tight labor market. Companies increased investments in training to create new worker profiles and introduced additional benefits such as accommodation provisions for staff in high cost island destinations affected by rising rents.
A spokesman for the sector highlighted that Spain has seen a decline in temporary employment and rising wages, signaling a positive pattern. He argued that tourism must also advance social sustainability and pointed to the importance of distributing economic value more fairly across the country. Spain’s Minister of Industry and Tourism, Jordi Hereu, emphasized that tourism should work with a skilled, educated, and well-paid workforce to maximize its positive impact on the economy.
Labor Shortages
Despite the employment boom, firms in travel and hospitality face challenges attracting and retaining workers, with many reporting a shortage of labor willing to enter the industry. Raúl González, CEO of Barceló Hotel Group, described a persistent personnel problem and stressed the need to explain the sector’s benefits to potential workers. He noted that wages for tourism employees are above the national average, though earnings may still feel modest given living costs in some regions.
According to the Bank of Spain’s latest Business Activities Survey for late 2023, 42.5 percent of companies viewed labor shortages as a constraint on operations. The hospitality and transportation sectors reported higher concern levels, with 55 percent and 51 percent respectively. Large employers in the sector, including the Spanish Confederation of Hotels and Tourist Accommodation, the Confederation of Travel Agencies, and the Association of Airlines, echoed this sentiment.
Industry leaders, including Amancio López, president of Grupo Hotusa, described the labor situation as difficult and unsustainable if unemployment remains higher than the European average while hiring difficulties persist. López proposed solutions such as improving educational opportunities and housing for workers to ease recruitment challenges.
Pablo Hernandez de Cos, Governor of the Bank of Spain, noted at a tourism forum that labor availability underscores the need for active employment policies and ongoing assessment of migration policies to relieve labor market pressure. He also called for policies that support rental housing and facilitate interregional worker mobility. He pointed out that tourism has a concentration of young and low-skilled workers, making it especially sensitive to wage policy shifts. In recent years the government and unions agreed to raise the minimum wage by five percent to 1,134 euros per month across fourteen payments, elevating annual earnings to about 5,573 euros for many workers.