Tourism is accelerating toward a pivotal year, with hopes of a broad reopening and a fresh wave of record performance across many indicators after the covid-era downturn. Demand is exploding from both domestic travelers in North America and international visitors, and prices are rising even as inflation cools from its peak. This dynamic creates a unique opportunity for the tourism sector to rebound strongly in Canada, the United States, and beyond, while businesses navigate higher costs and shifting consumer behavior.
The Spanish tourism industry, which had already returned to pre-pandemic activity levels and posted new highs in terms of business, revenue, and employment, faces uncertainty. Changes in spending patterns and traveler volumes could affect the sector’s overall footprint. In the context of North American markets, hotels, airlines, and attractions are watching demand closely as consumers recalibrate budgets amidst slower growth signals in some regions.
Think tank funcas, often regarded as the economic expert within the CECA Banking Association, highlights the uncertain near term for tourism activities. They point to adjustments in tourist spending, shorter average stays, and the impact of a cooling European economy as factors that could dampen demand for services across the sector. This caution resonates with business leaders in North America who are seeing price pressures and shifting patterns among visitors from Europe, Asia, and the Americas alike.
“Among industry leaders there are concerns and questions about what lies ahead. Expectations of a slower European economy and growing competition in the global tourism market raise doubts about future demand for services,” note funcas analysts. “Evidence of spending adjustments, changes in the timing of travel, and a weak macro outlook in parts of Europe contribute to sector uncertainty.”
Decline of key markets
Tourism is witnessing shifts in consumption patterns in major source markets due to their substantial weight in total sector revenues. In the period from January to July this year, travelers from the United Kingdom (-6.3%), Germany (-8.7%), and Scandinavian countries (-13.2%) spent less than the same span in 2019, pre-pandemic levels. The impact is pronounced because these markets historically deliver high average spend per tourist (€1,427 for Scandinavians; €1,188 for Germans; €1,106 for British visitors). Additionally, demand from UK and German travelers tends to be seasonal, with higher activity outside the peak summer season, presenting opportunities for the North American market to absorb some of the slack and diversify revenue streams while maintaining employment levels.
Meanwhile, the length of international stays is shortening. Data shows a trend toward shorter trips, with many visitors moving from traditional two-week sojourns to four- to seven-day getaways. This shift is commonly linked to household budget adjustments in response to inflation. If shorter stays persist, the positive effects of higher arrival numbers on total revenue may be tempered by reduced per-visit spending, a dynamic North American operators are monitoring as they tailor pricing and packages to capture value without dampening demand.
A record year
After the pandemic collapse, the sector has re-emerged as a core engine of the national economy, demonstrating resilience and the capacity to rebound faster than anticipated. Projections for the year ahead suggest continued growth. Estimates from Exceltur, a coalition representing many of the sector’s largest companies, point to a tourism GDP surpassing previous records, with figures approaching 178.8 billion euros, reflecting a growth of about 12% from the prior year and a 13.6% rise above 2019 levels. Major players in the chain include Meliá, NH, Iberia, Globalia, Riu, and Amadeus. These gains reinforce tourism as a central pillar of Spain’s economy, potentially equaling its pre-pandemic contribution to about 12.6% of national GDP.
Much of this growth is supported by price adjustments that the sector has used to manage revenues while expanding capacity and services. When the impact of price increases is excluded from the calculation, tourism GDP remains slightly below pre-pandemic levels in real terms. The Exceltur service notes that excluding rate hikes, tourism GDP would be about 1% lower than in 2019.
Industry forecasts indicate that Spain’s tourism revenue, driven by international visitors during their stays, will exceed pre-pandemic figures and set new records with an anticipated 82 billion euros for the year. This marks an 18% rise from the previous year’s 69.1 billion euros and a 15% advance over the 2019 peak of 71.2 billion euros. The combination of buoyant demand and rising rates is poised to deliver the biggest economic contribution from foreign visitors in the post-pandemic era (Source: Exceltur).