International tourism in Spain: from quantity to quality?

The recent boom in Spain’s international tourism is having a very positive impact on the growth of the economy and of employment. However, it also has repercussions for the resident population that are not always positive, such as greater congestion due to the larger influx of tourists in certain parts of Spain. This has rekindled the debate on the need to move towards higher quality tourism.

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Anna Campos
David Catalán
July 2nd, 2019
Análisis de la llegada de turistas extranjeros a España
What do we mean by quality tourism?

Quality tourism is often associated with tourist expenditure. However, the definition of quality is undoubtedly much broader and includes environmental sustainability which depends, among other factors, on the degree of geographical spread or concentration, and the capacity to create good quality jobs carried out by better trained workers on more permanent contracts, a factor which is influenced, for instance, by the degree of seasonality1. Below we examine the trends in Spain’s international tourism for each of these factors.

  • 1. Tourism can also have an impact on the price of some services, such as housing. For more information, see the article «Rent is on the rise in Spain» in the Real Estate Sector Report, 2nd Semester 2019
What is quality tourism?

Quality tourism is not mass tourism; it is more geographically spread and less seasonal, capable of creating good quality jobs that are more permanent and carried out by better trained workers

Tourism concentration

Index

Concentración de turistas en España
Note: Number of foreign visitors divided by the population. Source: CaixaBank Research, based on data from the World Bank.
Tourist reception point

Spain is one of the countries that receive the most tourists in proportion to the resident population; in cities such as Madrid or Barcelona there are four times more tourists than inhabitants

Geographical concentration

Worldwide, Spain is second in terms of inbound tourism, only behind France which received 86.9 million tourists in 2017. However, these absolute figures are not a good indication of how concentrated the country’s tourism might be, something which becomes clearer when we relate this figure to the number of inhabitants in each country. As a result, we can see that Spain’s tourist concentration is very high, to the point that the number of international tourists coming into the country almost doubles its resident population.

If we compare this figure with that of other countries, we can see that Spain is one of the countries that receive the most tourists in terms of its number of inhabitants. While the annual number of hotel visitors does not exceed the national population in Italy, the United Kingdom or Turkey, it is the opposite situation in France and especially in Spain, as shown in the chart.

CaixaBank analiza el crecimiento de turistas extranajeros en España

Spain receives a considerable number of tourists, especially when compared to its population, but another important factor to take into account is the geographical distribution of this tourism. The consequences are quite different when all these tourists are concentrated in one city rather than spread throughout a region.

In this respect, although tourism has grown throughout Spain there are some areas, especially large cities, that have experienced a large proportion of the tourism growth observed in recent years.

Concentración en los mayores focos turísticos

Índice

Datos sobre concentracion turística
Nota: Número de turistas dividido por población, datos de 2018. Fuente: CaixaBank Research, a partir de datos de Euromonitor International.

Specifically, in the past 12 years, tourist arrivals2 in Madrid and Barcelona have gone from representing twice their population to quadrupling it. The ratio of tourist arrivals to the resident population in Barcelona is one of the highest among the world’s major cities, greater than cities such as Singapore and London and only behind Paris, Dubai and Hong Kong. Similarly, Rome and New York have fewer centres of concentrated tourism than Barcelona, measured in terms of tourist arrivals compared with the resident population.

Over the next few years, given that the large number of tourists visiting Spain should consolidate, the concentration of tourism in Spain’s major cities will probably remain at a similar level3. Consequently, efforts should continue to focus on designing strategies to optimise the geographical distribution of tourists in an attempt to reduce large concentrations at certain locations or cities.

  • 2. Number of international tourists. Source: Euromonitor International.
  • 3. See the article «Towards a higher quality, more sustainable tourism industry » in this Sector Report for more details on tourism forecasts.
Seasonality

Another important factor in the definition of quality tourism is related to its seasonality; i.e. the fluctuation in inbound tourism throughout the year.

Historically, tourism in Spain has focused mainly on sun, sea and sand as is therefore seasonal by definition. Even today, almost half the tourists visiting Spain do so in the summer months. This high seasonality has an impact on the labour market as it leads to a large number of temporary jobs, as discussed below. But, in addition, to satisfy the peaks in demand during the high season, infrastructures are also created whose potential is not exploited in the off season.

Although Spain’s tourism is very seasonal, and more so than in countries such as France, this has decreased slightly in recent years with the result that the country’s tourism is now less seasonal than Italy’s, as can be seen in the chart. However, in spite of this positive trend, seasonality is still a problem that needs to be tackled by the tourism industry, which is why it is vital to continue focusing on less seasonal segments such as business or gastronomy tourism, on diversifying tourism products and services and on boosting the loyalty of tourists coming to Spain.

Seasonality goes down

Although seasonality has declined in recent years, it is still a problem that needs to be tackled by Spain’s tourism industry

Seasonality of hotel overnight stays

%

Datos sobre pernoctaciones hoteleras en España
Note: Percentage of overnight stays between June and September compared with the annual total. Source: CaixaBank Research, based on data from INSEE, INE and ISTAT.
Employment

Quality tourism is also tourism that is capable of creating good quality jobs. In this respect, there are several factors that can affect the quality of employment, such as how overqualified the workers are, the type of employment contract and also wages.

As we have already seen, Spanish tourism is highly seasonal and this results in a large number of temporary jobs. Specifically, the temporary employment rate for the tourism sector is 34%. Moreover, while tourism has become less seasonal in the past five years, the temporary employment rate has remained more or less constant.

Good quality jobs

Quality tourism is capable of creating good quality jobs

Temporary employment rate in Spain

%

Tasa de temporalidad del empleo en el sector turístico
Source: CaixaBank Research, based on data from Turespaña.

Another factor affecting the quality of employment is the share of part-time jobs compared with the total (the part-time rate). In the case of the tourism industry, this figure is close to 25%, well above that of the economy as a whole (15%)4. Apart from this part-time rate, it is also significant that half the sector’s part-time workers are involuntarily; i.e. they would like to work full time.

However, the share of involuntary part-time employment compared with all employment, now standing at 13%, has followed a downward trend in recent years. There is still a long way to go to reach levels close to those recorded before the economic crisis (5% in 2008) but this gradual descent in the involuntary temporary employment rate in recent years should be viewed positively.

  • 4. 2018 data

Part-time employment in the tourism industry

% total employment

Datos sobre las jornadas parciales en el sector turístico
Source: CaixaBank Research, based on data from the Spanish Statistical Office (Labour Force Survey).

Labour productivity is also an important factor to ensure good quality employment. Spain’s hotel sector has a positive record, with its labour productivity almost 20% higher than the average for the European Union (EU). Much of this higher productivity is due to company size. Labour productivity figures show that large tourism companies tend to be 30% more productive than small enterprises. Since Spain has a greater proportion of large companies than the European average, the country’s labour productivity is also higher than the EU.

Matching workers’ qualifications to job requirements, tourism industry and total economy

% total employees

Datos sobre requerimientos laborales en el sector turístico
Source: CaixaBank Research, based on data from the Spanish Statistical Office (Labour Force Survey).

Nevertheless, the higher labour productivity of Spain’s tourism industry is not only due to company size, since small Spanish companies are also more productive than their European counterparts.

Finally, a good quality job is one in which, ideally, there should be a good match between the employee’s qualifications and the skills required by their job. In the tourism industry, a large proportion of workers have a higher level of education than that required by the job they do. As can be seen in the table, 13.8% of tourism jobs requiring basic knowledge are carried out by people with a higher level of education, denoting a high degree of overqualification, especially compared with the economy as a whole, namely 7.4%.

Expenditure and profitability

Last but not least, quality tourism must also be associated with greater profitability. In Spain, tourism revenue increases year after year, totalling 62,481 million euros in 2018. Much of this growth is due to the significant rise in the number of tourists in recent years. However, another not inconsiderable part can be explained by the higher expenditure of tourists visiting Spain.

Specifically, the increase in average daily expenditure per tourist lies behind one third of the increase in total tourist expenditure over the past three years. The average expenditure per person reached 145.3 euros per day in 2018, an increase of 12% over 2016.

Growth in average expenditure per tourist

Tourists visiting Spain are spending more and more: the average expenditure per person reached 145.3 euros per day in 2018, 5.4% more than the previous year

It is worth noting that Spain receives many different types of tourist with very different patterns of behaviour, so the overall figures are not enough to determine the type of tourism we receive. An analysis of payments made using foreign cards at CaixaBank payment terminals allows us to establish eight categories of tourist according to their type of expenditure, duration of trip, nationality and propensity for different expenses, as shown in the table below.

The category that stands out for its higher average expenditure per trip is «Hotel with card», which includes those tourists for whom most card payments are spent on their hotel and restaurants. The majority come from France and the United States and their average stay is usually one week. Similarly, the group of tourists classified as «I want to get to know Spain» also have a high average expenditure, especially on restaurants. This group includes those tourists who make longer trips, of approximately two weeks, since they come mainly from America and take the opportunity to visit several autonomous regions while in Spain.

Turistas en la costa española

At the other end of the scale is the «Expenditure at place of origin» group, which are those tourists with the lowest average expenditure per trip. This category includes tourists with an average stay of between 3 and 10 days who spend mostly on transport and restaurants and probably paid for their hotel in their own country.

The other notable group at this end of the scale is classified as «Short breaks and borders», with a low average expenditure per trip due mainly to the short duration. This group is mainly made up of French tourists who visit Spain often and tend to use their cards mostly to pay in establishments that sell food products.

Types of international tourist visiting Spain by their expenditure

Grupos de turistas que vienen a España según el gasto que hacen
Source: CaixaBank Research.

With regard to the trend in the composition of tourists visiting Spain, the analysis carried out seems to indicate that there have been no substantial changes in the volume of tourists in each group in the past three years; i.e. in general terms, the composition of tourists shows no obvious signs of change.

In conclusion, Spain now faces the challenge of consolidating a sustainable tourism model and reinforcing its value proposition aimed at quality tourism, especially regarding the aspects of tourist concentration, seasonality and employment. To this end, the country must continue to focus its efforts on designing strategies to optimise the geographical distribution of tourism and reduce its seasonality, achieved by diversifying the supply of tourism products and services and improving the loyalty of those visiting Spain.

Anna Campos
David Catalán
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