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Spain posts record drop in summer unemployment as tourists return

Spain on Thursday posted a record drop in jobless figures in August as the labour market was buoyed by the recovery of the tourism sector thanks to a relaxation of pandemic restrictions.

Published: 2 September 2021 14:03 CEST

Spain posts record drop in summer unemployment as tourists return

A guide leads tourists from their cruise ship to the streets of Palma de Mallorca. Photo: JAIME REINA / AFP

The number of people registering as jobless fell by 82,583, or 2.42 percent, from July, the sixth consecutive monthly decline and the sharpest reduction in the month of August since the statistical series began in 1996, the labour ministry said.

The total number of unemployed stood at 3,333,915 million people.

“This is great news, which confirms that we have overcome the worst of the crisis,” Labour Minister Yolanda Diaz tweeted, adding the government must now “ensure that the recovery is fair and balanced”.

While employment rose across all sectors except for construction, the bulk of those who found a job, 46,224, work in the service sector which is dominated by tourism.

The arrival of foreign tourists to Spain jumped by 78.3 percent in July over the same time last year to 4.4 million, although the numbers remain far from the levels reached in the same month in 2019 before the pandemic.

Official figures for the month of August are not yet available but several sector leaders have said there was a sustained recovery in tourism activity as Spanish holidaymakers made up for the absence of foreign visitors.

The Spanish government has said it was hoping to attract around 45 million tourist visits this year, approximately half the figure for 2019.

Before the pandemic hit in spring 2020, Spain was the world’s second-most popular tourist destination after France, and the sector accounted for around 12 percent of the economy.

Spain’s unemployment rate fell in the second quarter to 15.3 percent from 15.9 percent in the first quarter, according to National Institute of Statistics, which uses a survey method that catches people who are not registered for unemployment benefits.

The Spanish economy contracted by 10.8 percent in 2020, one of the worst results among industrialised countries, but it returned to growth in the second quarter this year.

The government expects growth of 6.5 percent this year overall.

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Why are fewer British tourists visiting Spain this year?

Spain welcomed 12.2 million UK tourists between January and July 2023, 6 percent less when compared to the same period in 2019, according to data released on Monday by Spanish tourism association Turespaña.

This represents a decrease of 793,260 British holidaymakers for Spain so far this year.

Conversely, the number of Italian (+8 percent), Irish (+15.3 percent), Portuguese (+24.8 percent), Dutch (+4 percent) and French tourists (+5 percent) visiting España in 2023 are all above the rates in 2019, the last pre-pandemic year.

German holidaymakers are together with their British counterparts the two main nationalities showing less interest in coming to Spanish shores.

Britons still represent the biggest tourist group that comes to Spain, but it’s undergoing a slump, with another recent study by Caixabank Research suggesting numbers fell particularly in June 2023 (-12.5 percent of the usual rate).

READ ALSO: Spain fully booked for summer despite most expensive holiday prices ever

So are some Britons falling out of love with Spain? Are there clear reasons why a holiday on the Spanish coast is on fewer British holiday itineraries?

According to Caixabank Research’s report, the main reasons are “the poor macroeconomic performance of the United Kingdom, the sharp rise in rates and the weakness of the pound”.

This is evidenced in the results of a survey by British market research company Savanta, which found that one in six Britons are not going on a summer holiday this year due to the UK’s cost-of-living crisis.

Practically everything, everywhere has become more expensive, and that includes holidays in Spain: hotel stays are up 44 percent, eating out is 13 percent pricier, and flights are 40 percent more on average.

READ ALSO: How much more expensive is it to holiday in Spain this summer?

Caixabank stressed that another reason for the drop in British holidaymakers heading to Spain is that those who can afford a holiday abroad are choosing “more competitive markets” such as Turkey, Greece and Portugal.

And there’s no doubt that the insufferably hot summer that Spain is having, with four heatwaves so far, has also dissuaded many holidaymakers from Blighty from overcooking in the Spanish sun.

With headlines such as “This area of Spain could become too hot for tourists” or “tourists say it’s too hot to see any sights” featuring in the UK press, budding British holidaymakers are all too aware of the suffocating weather conditions Spain and other Mediterranean countries are enduring.

Other UK outlets have urged travellers to try out the cooler Spanish north rather than the usual piping hot Costa Blanca and Costa del Sol destinations.

Another UK poll by InsureandGo found that 71 percent of the 2,000+ British respondents thought that parts of Europe such as Spain, Greece and Turkey will be too hot to visit over summer by 2027.

There’s further concern that the introduction in 2024 of the new (and delayed) ETIAS visa for non-EU visitors, which of course now also applies to UK nationals, could further compel British tourists to choose countries to holiday in rather than Spain.

READ MORE: Will British tourists need to pay for a visa waiver to enter Spain?

However, a drop in the number of British holidaymakers may not be all that bad for Spain, even though they did spend over €17 billion on their Spanish vacations in 2022.

Towns, cities and islands across the country have been grappling with the problem of overtourism and the consequences it has on everything from quality of life for locals to rent prices.

READ ALSO: ‘Beach closed’ – Fake signs put up in Spain’s Mallorca to dissuade tourists

The overcrowded nature of Spain’s beaches and most beautiful holiday hotspots appears to be one of the reasons why Germans are visiting Spain in far fewer numbers. A recent report in the country’s most read magazine Stern asked “if the dream is over” in their beloved Mallorca.

Spanish authorities are also seeking to overhaul the cheaper holiday package-driven model that dominates many resorts, which includes moving away from the boozy antics of young British and other European revellers.

Fewer tourists who spend more are what Spain is theoretically now looking for, and the rise in American, Japanese and European tourists other than Brits signify less of a dependence on the British market, one which tends to maintain the country’s tourism status quo for better or for worse.

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