Caixabank Research predicts a 5% growth in the tourism sector this year, twice the GDP growth rate, driven by increased spending from US and Latin American visitors.
Caixabank Research projects the tourism sector to grow by 5% this year, twice the GDP growth rate, fueled by increased spending from US and Latin American visitors.
Spain’s economy is set to surpass its European counterparts and exceed expectations, according to the latest upward revision by Caixabank Research. The economy is forecast to grow by 2.4% in 2024, half a percentage point higher than previous projections, and another 2.4% in 2025, driven largely by the robust tourism sector.
The research department anticipates tourist GDP will grow by 5% this year, double the overall economic growth rate, and by 3.2% in 2025. This growth is supported by the recovering purchasing power of European households, declining inflation, the European economic rebound, and Spain’s perceived increased safety amid geopolitical tensions.
“The current dynamism of the Spanish economy is partly explained by the strong momentum of the tourism sector,” the organization noted in its report. Following a record-breaking 2023, the first four months of 2024 have exceeded all previous figures, projecting the tourism sector’s share of total GDP to reach 13% this year. One-quarter of this year’s GDP growth is attributed to tourism.
Spain is expected to welcome over 90 million international visitors this year, five million more than last year’s record. Domestic tourism remains strong but grows at a slower pace compared to international tourism due to Spaniards resuming travel abroad post-pandemic.
International tourism spending has evolved notably. While European tourists’ spending remains the most significant, its share has decreased since 2019. Conversely, tourism from the Americas has shown remarkable growth. Data from Caixabank indicates that North American tourists’ (from the US and Mexico) contribution to growth increased from 10.1% in 2019 to 12% in 2023, with early 2024 figures showing further increases. Latin American tourists’ spending rose from 3.8% pre-pandemic to 4.3% in 2023. European tourists’ contribution to spending growth dropped from 73.1% to 71.8%.
Heat waves are a concern
Despite the tourism boom, the report highlights the negative impact of climate change on the sector. Tourists are less likely to return to Spain if they experience a heat wave, reducing summer visitor numbers due to rising temperatures.
Specifically, the likelihood of tourists returning to Spain a second time is 14%, but drops to 12% if they experienced a heat wave. When the average daily temperature exceeds 5C above the historical average, the probability of repeat visits drops significantly. British and American tourists are the most affected, with a 4% decrease in their intention to return, while French and Portuguese tourists are the least affected, with only a 1% decrease.
