The rebound in tourism is gathering speed. Sector firms are seeing a strong revival in demand as travel activity shifts into high gear for the Easter period and the busy summer months. This lift has drawn attention from both domestic travelers in Spain and international visitors, with momentum expected to persist through the year, even as the war in Ukraine and inflationary pressures influence consumer spending.
Yet major industry players caution that stronger activity does not automatically translate into higher profits. They point to inflated costs driven by runaway inflation, which has surged to about 9.8 percent in some estimates, narrowing margins and complicating the pass-through of rising costs into ticket and service prices. In March, price pressures reached levels not seen in nearly four decades, and many firms report limited ability to fully transfer these costs to customers.
“The industry’s top worry is not the health of bookings but the squeeze on margins”, noted José Luis Zoreda, Vice President of Exceltur, the association that gathers Spain’s thirty largest tourism groups, including names such as Melia, NH, Iberia, Globalia, Riu, and Amadeus. While the Ukraine conflict has not directly disrupted business to date, with roughly 7.7 percent of Easter bookings reportedly lost, this deficit is being offset by other last‑minute reservations; nevertheless, profitability is eroded by surging prices.
Exceltur also emphasizes that many companies can only absorb a portion of the additional operating costs, with cost overruns consuming about 26.3 percent of total expenses. Inflation, amplified by the war in Ukraine, has translated into notable rises in fuel costs, electricity and gas, and essential supplies for tourism businesses.
The lobby warns that wage costs are climbing as well, driven by CPI-linked collective agreements, contributing about a 7.8 percent increase for the sector. In light of this trend, Exceltur urges major unions and employers to pursue an agreement that moderates wage growth within the tourism field, avoiding unsustainable upward pressure on costs.
Paradoxically, while firms seek to curb price increases, they also face challenges in hiring and retaining trained staff. The pandemic disrupted labor flows, and several companies have yet to recover pre-pandemic staffing levels, with some workers redirected to other sectors during recent years.
accelerated recovery
Despite geopolitical tensions and persistent inflation, confidence remains that demand will stay resilient in the coming months. Exceltur adjusted its projections to reflect stronger activity for 2022, forecasting that tourism GDP would rebound to about 91.6 percent of pre‑pandemic levels, equivalent to roughly 141.681 billion euros.
The association’s updated estimates suggest a rise of around 6 billion euros above prior expectations for 2022, representing a robust 57 percent increase over the 2021 figure. Even so, the tourism sector’s GDP remains about 13,000 million euros below the 2019 peak reached before the Covid disruption, underscoring the gaps still to close on the road back to full pre‑crisis output.