How is the national and international tourism helping Spain overcome Essay

Spain is one of the countries in the world that has been severely affected by the global economic crisis originated in 2008. It is the country with the greatest number of unemployed citizens in all Europe. Its rate of unemployment reached an all time high of 26. 9% in May 2013. The European Union is worried about this situation, and has therefore forced the Spanish Government to apply some strict cut backs to their economy in order to decrease its high public deficit. These measures are mostly affecting public labor force, who realized they don’t have sufficient income to last them through the month. In addition, college students, mainly those who study architecture, engineering and medicine, have realized that there is not a promising professional career that can be developed in Spain. Since the beginning of the economic crisis, more than 300,000 young Spanish citizens have left the country in order to find a job in markets overseas. All these negative aspects of the country’s critical situation are bringing Spain forward to be a candidate of receiving a bailout from the European Union. Despite being in this delicate position, it is not all about negative figures in Spain. There is one sector of the Spanish economy that is helping the country to come back on track: tourism. The purpose of this report is to find out how tourism is helping Spain to recover from the economic decline. I have divided the findings into two sections: First, I will explain the importance of tourism in Spain. Second, I will describe the general changes in both international and national tourism, without analyzing the monetary effects in the economy. Third, I will provide information about the economical consequences that these changes are having in the reactivation of the Spanish economy. Findings 1- Importance of Tourism in the Spanish Economy Spain, behind France, the United States and China, is one of the top world destinations to go on vacation. Its 7,876 kilometers of beautiful beaches, pleasant weather and 44 world heritage monuments, position the country as the 4th country in the world to receive the highest number of international tourists. In terms of revenues, the country is ranked in second position right after the United States (Butler, 2013). According to the World Travel and Tourism Council (WTTC), tourism represented a total contribution of 15. 2 % of Spain’s Gross Domestic Product in 2012. In other developed countries, such as the United States, France and China, tourism represented a 8. 6%, 9. 7% and 9. 3% of their respective 2012 GDP (2013). This shows that, despite receiving more tourists than Spain, these countries’ economic lives are less affected and determined by the changes that might take place in the tourism sector. The Government of Spain knows how crucial tourism is for the performance of the country’s economy and gives this sector high importance. As a touristic oriented country, Spain has 47 airports, 2,000 km of commuter rail trains and 2,900 km of high-speed rail network (Butler, 2013). These elements make Spain one of the countries with the best transportation system in the world. This advantage of Spain facilitates the arrival of international tourists and the transportation of national tourists all over the country. In addition, as I mentioned before, one of Spain’s biggest problems is its increasing rate of unemployment. The WTTC published that travel and tourism directly supported 894,000 jobs in Spain. This means that 5. 2% of workers were related to this specific sector of the economy (2013). All the figures I just pointed out reflect the positive and remarkable impact of tourism in Spain’s economy. Now, I am going to present some more detailed information about the changes in the national and international tourism, and the consequences of these changes relating them to the fact that tourism is the main force that is helping Spain to overcome this fragile situation. 2- Changes in Tourism in Spain Since the beginning of the global economic crisis, tourism in Spain has changed in many ways. Not only has it influenced the amount of foreigners’ visits to Spain, but it has also affected the domestic conception of going on vacation. Changes in International Tourism As I said in the Introduction, Spain received more than 57 million tourists during 2012, which means it had a year-over-year growth of 2. 7%. The countries that contributed the most to this growth are France, Germany and Russia. In addition, some Nordic and Asiatic countries also collaborated on it (Institute of Touristic Studies of Spain [ITE], 2013). The main positive elements of the Spanish economy come from the foreign sector. It is important to point out that the total nights international tourists stayed in Spain increased by 2. 3% in 2012. Looking at the low rates of unemployment in France, Germany, United Kingdom and Russia, it can be deduced that these countries are performing economically better than Spain. This means that foreigners, who have not been as affected as the Spaniards by the economic crisis, have enough income and are willing to go on vacation outside of their home countries. The Institute of Touristic Studies from Spain, assures that Spanish tourism has become more competitive in the last few years. By analyzing the changes in prices and the value of the currency compared to other countries, this Institute has used the Competitiveness Trend in Tourism Ratio to measure the performance of the country. It has arrived to the conclusion that, due to the low prices compared with other countries from the European Union, Spain has achieved a beneficial position to attract international tourists to the country (2013). Changes in National Tourism As well as the international, national tourism has experienced many changes during the past few years. National tourism in Spain closed the year 2012 with 158,9 millions domestic trips. It is important to highlight that 9 out of 10 of Spanish citizens’ trips were effectuated inside the country. Due to the difficult economic situation that many Spaniards are experiencing, travelling to other countries decreased by 4. 8% in 2012 (ITE, 2013). This new setting where saving money is the main concern for Spanish citizens, has helped new forms of travelling to arise in the Spanish touristic sector. Even thought Spain has always been seen as a â€Å"sun and beach† destination, Antonio Villanueva Cuevas, Doctor at the Castilla-La Mancha University, explains that news forms of travelling such as rural, cultural and natural tourism are becoming popular between Spaniards that are looking to travel with minimum expenses (2012). In addition, those who still prefer going to the beach have found their way to get cheap options by either going during low season or taking last minute deals. 3- How are These Changes Having a Positive Impact in the Spanish Economy? Since tourism in Spain represents a large part of its Gross Domestic Product, this sector of the economy will have a considerable impact on the country’s economy performance. The growths of international and national tourism have helped the country to stay â€Å"economically alive† (Barreira, 2013). Positive Impact from International Tourism In relation to the international tourism, Spain is the 4th country in the world to receive the highest number of tourists. More than 57 million tourists visited Spain in 2012. Moreover, there was a high new record of 56 billion Euros reached in spent by international tourists in Spain. The growth of the number of international tourists that visited Spain in 2012 helped the country’s economy by contributing â‚ ¬57. 1 billion to the GDP (ITE, 2013). Even though Spain’s GDP fell by 1. 3% in 2012, the growth of the international tourism made the GDP experience a shorter descent. Another positive impact of the international tourism is the fact that the number of workers hired in the tourism sector increased by 0. 6% in 2012 (World Travel and Tourism Council [WTTC], 2013). It might be seen as an insignificant growth, but, taking into account that the general rate of unemployment increased to 26% in 2013, any contribution has an important meaning for the reactivation of the country’s economy. International tourism also caused the growth of capital investment by 7. 4% to â‚ ¬14. 8 billion in 2012 (WTTC, 2013). In addition, the fact that prices in Spain are low compared to other countries in the European Union, makes Spain more attractive to receive investments and be chosen as a holiday destination. All these positive consequences of the international tourism in the Spanish economy are helping the country to achieve the goal of not seeing Spain as a burden for the European Union. The recuperation of the country’s economy will be determined by the growth of GDP, decrease of unemployment rate and increase in foreign investments in the country. All these aspects are represented by the good performance of Spain’s international tourism. Positive Impact from National Tourism Even though national tourism has not shown as many positive figures as the international one, it is helping the country to improve economically. As I explained before, a large number of Spaniards can’t afford to travel to another country during vacation. They decide to stay in the country, and look for new cheap ways of travelling. Spaniards are starting to purchase last minute deals, and to travel during low season periods. Even thought the number of national trips decreased by 1. 2% in 2012, Spain registered a growth of 22% in national tourism from 2008 to 2012 from 130 to 158. 9 million national trips (ITE, 2013). It can be deduced from this, that national tourism has had an overall positive performance during the Spanish recession. The fact that Spaniards choose national rather than international destinations makes them invest money in their own country’s economy. Moreover, even thought national tourism slightly decreased in 2012, new sectors of the Spanish national tourism have showed positive figures during the last few years. Juan Pulido and Pablo Garcia, members of the economics department at University of Jaen in Spain, explain that the rural sector of the Spanish national tourism has increased by 7. 5% in the last 10 years. Since Spaniards don’t want to spend too much money during vacation, they decide to stay in the country and look for new attractions. Spaniards spent a total of â‚ ¬18,046 million in rural destinations during 2011 (2011). Rural tourism is affecting positively the economy by activating some unusual tourism destinations, and giving them the opportunity to create a new emerging business in Spain. The increasing importance of this new way of tourism creates jobs and activates the economy of certain domestic areas. These new ways of doing tourism are making Spaniards stay in their country during their holidays, invest money in the national market, and contribute to the reactivation of the country’s economy. Key Points Spain is one of the countries that have been affected the most by the global economic crisis originated in 2008. However, there are several facts that explain how tourism is helping Spain to overcome this situation: Tourism represented a total contribution of 15. 2 % of Spain’s Gross Domestic Product in 2012. Tourism has a great impact in the performance of the Spanish economy. Spain has received more than 57 million international tourists during 2012, which mean it had a year-over-year growth of 2. 7%. There was a high new record of 56 billion Euros reached in spent by these international tourists that visited Spain in 2012. The number of workers hired in the Spanish tourism sector increased by 0. 6% in 2012. International tourism has also caused the growth of capital investment by 7. 4% to â‚ ¬14. 8 billion in Spain during 2012. Spain registered a growth of 22% in national tourism from 2008 to 2012, from 130 to 158. 9 million national trips. The fact that Spaniards are choosing national rather than international destinations makes Spaniards invest more money in the domestic economy. The rural sector of the Spanish national tourism has increased by 7. 5% in the last 10 years. This has created a new sector of tourism that creates jobs and gives opportunities to local areas to develop an emerging business. Conclusion The overall situation is perfectly described in an article written by Victor Barreira (2013), a journalist who works for El Pais, the most sold newspaper in Spain, which says: The national GDP fell by 1. 3% in 2012, unemployment raised to 26%, the bailout petition to the European Union was still active†¦ however, tourism is staying as a life-jacket to which Spain can keep held in order to ride out of the storm. It points out that the economic situation of Spain has affected the country in an extremely negative way. However, tourism has been the most important sector of the economy that has shown positive figures and has helped the country to better deal with the economic situation. It is important for the Spanish Government to keep working on the improvement of the country’s touristic attractions and promote Spain as a holiday destination. References Barreira, V. (2013, January 16). Espana registro en 2012 el tercer mejor ano de la historia en llegada de turistas [Spain registered in 2012 the third best year in history in arrival of tourists]. El Pais. Butler, M. (2013, February 27). Spain as an international tourist destination [Electronic version]. Atlas of the brands. Institute of Touristic Studies of Spain. (2013). Balance del turismo ano 2012 [Tourism balance year 2012]. Retrieved October 13, 2013, from www. iet. tourspain. es Pulido, P. , & Cardenas,P. (2011). El Turismo rural en Espana [The rural Tourism in Spain]. Asociacion de Geografos Espanoles. Villanueva, A. (2012). Las nuevas formas de turismo como instrumento para lograr un desarrollo sostenible e integrador [The new forms of tourism as a tool to reach a sostenible and integrative development]. Universidad de Castilla-La Mancha. World Travel and Tourism Council. (2013). Travel and Tourism, the economic impact 2013 in Spain. Scowsill, D.