The arrival of tourists does not start in one of the central months of the year. In July, card spending drops by about 60%. Only four provinces are saved
The data are still partial, but they point in one direction: foreign tourists, despite the opening of borders in July, are not arriving. The figures even reveal that there are no signs of a minimally significant recovery.
This conclusion can be reached in light of the high frequency indicators of entities such as BBVA, Banco Sabadell or CaixaBank, which use for their analysis the card expenditure made by foreigners in Spain during the first half of July, which is a very representative month in terms of tourism. It is therefore a question of actual consumption recorded through the various point of sale (POS) terminals.
And what BBVA Research says, for example, is that foreign card transactions in Barcelona, Madrid, Alicante and Malaga, which account for half of foreign spending, are still between 54% (Alicante) and 84% (Madrid) below the figures of a year ago. In just four provinces, Badajoz, Huesca, Teruel and Lleida, there has been an increase in transactions with foreign cards, with an average reduction of -60%. The data refer to the week from 6 to 12 July. That is, already in the middle of the tourist season and with the borders open for most countries.
The data from Banco Sabadell, which also uses for its analysis the card expenditure of foreigners visiting Spain, goes in the same direction. What their payment terminals in shops, hotels or restaurants reveal is that spending in Madrid during the second week of July is barely 17.5% of the level a year ago, while in Barcelona that percentage rises to 21.1%. In Malaga, also a very important tourist destination, spending with foreign tourists card only represents 35.9% of the level recorded a year ago, while in Alicante, another very significant destination, represents 45% of the level of a year ago.
CaixaBank, for its part, has estimated that total consumption with foreign cards continues to “improve”, although it still shows a very substantial fall (-59% year-on-year). This is in line with other evidence. In the case of face-to-face consumption, excluding withdrawals from its ATM network, the drop during the second week of July was 61%, when in April, with the borders closed, it reached a historic -88%.
According to this economic analysis tool, which provides real-time information on consumption, both in Spain and abroad, the recovery advanced more strongly in the provinces bordering France, except in Navarre. In fact, according to BBVA Research, spending in Girona and Huesca is already close to the levels of July 2019.
Very different is what is happening in the archipelagos, whose exposure to tourism is the highest in the country. In the second week of July, the contraction of foreign expenditure in the Balearic Islands was 63% year-on-year, slightly better than in the Canary Islands, where the decline was 73% due to the lower influx of tourists. The islands account for 20% of consumption with foreign cards.
The low number of tourists is starkly illustrated by the fact that if before the pandemic eight out of every 100 euros spent corresponded to foreign cards, today the transactions barely account for 4%.
The recovery of foreign tourism, as is known, is key to GDP and employment. Not surprisingly, and according to the latest review of the Bank of Spain, tourism revenues in the balance of payments amounted to 69,023 million euros in 2018, the last year with closed figures.
The most affected
In 2019, a total of 83.7 million tourists arrived in Spain, of which 21.5% were British. The other two most relevant countries are France and Germany (13% each). Catalonia was the main tourist destination for foreigners in 2019, accounting for 23.1% of all tourists, and is therefore the main country affected by the contraction in the number of visitors. This was followed by the Balearic Islands (16.3%) and the Canary Islands (15.7%).
Spain, as we know, has had open borders with all European Union Member States since 21 June last, coinciding with the end of the state of alarm, when it was also decided to eliminate the quarantine for travellers. The Government, likewise, and based on the principle of reciprocity, allows the entry of citizens from Algeria, Australia, Canada, China, South Korea, Georgia, Japan, Morocco, Montenegro, New Zealand, Rwanda, Serbia, Thailand, Tunisia and Uruguay. In other words, an extensive list.
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AENA, for the time being, only offers data from the month of June in terms of passenger traffic, and that month, with high restrictions on flying, the average fall was 96.1%, while in the accumulated of the year the fall is 66%.
According to the latest forecasts from Exceltur, the sector’s employers, the revival of foreign demand is expected to start “very slowly” in July and to have a very gradual recovery, limiting its presence in the summer to basically European markets.
According to the sector, there are still many uncertainties about the British market, which is a fundamental market, although everything will depend on the evolution of the pandemic and the consistency of the outbreaks in the most touristic places that can attract foreigners. According to its estimates, and already counting on the recovery that began in July, although it is mild, international demand will fall this year by 61.8% compared to 2019, which gives an idea of how slow the recovery will be.
Author: El Confidencial