The tourism sector had a historical year for income in 2023 in the Canary Islands

  • Canarian Weekly
  • 18-01-2024
  • Business
  • Photo Credit: Stock Image
The tourism sector had a historical year for income in 2023 in the Canary Islands

In 2023, the tourism sector in the Canary Islands experienced a 23.2% increase in income compared to 2019, the reference year before the pandemic. This places the archipelago as the third region with the highest growth in tourist sales in Spain, following Catalonia (+27.5%) and the Balearic Islands (+26%), as revealed in data released yesterday (Wednesday) by Exceltur.

The Spanish tourism sector, as a whole, continued its recovery in 2023, concluding the year with a total activity generating €186.5 billion. This represents a significant contribution to the national economy of 12.8%, the highest in historical records.

Forecasts for 2024 are even more optimistic, anticipating a contribution exceeding €200 billion and elevating its share in the national economy to 13.4%.

Tourism emerges as the primary driver of Spain's real economic growth in 2023, rising by 13.1%, constituting 70.8% of the overall real growth estimated at 2.4% by the Bank of Spain.

"We are proud that tourism is the cornerstone of the Spanish economy and has also created more and better employment," stated José Luis Zoreda, the executive vice president of Exceltur, during the presentation of the 2023 tourism business evaluation and the outlook for 2024 in Madrid on Monday.

Forecasts for the tourism sector in 2024 remain high, though more moderate due to the impact of accumulated inflation and increases in wage and financial costs. Zoreda explained, "In 2024, all economic records that Spanish tourism has ever had, will be surpassed."

According to Exceltur, 2024 will solidify the progress of tourism in Spain, with an estimated GDP reaching €202.6 billion, an 8.6% increase over 2023 in current price levels. Consequently, its contribution would rise to 13.4% of the total Spanish economy.

Sales Growth

Consistent with the projections for tourism GDP, Spanish entrepreneurs anticipate further improvement in their sales, estimating a 7.8% increase in 2024 compared to the already positive figures of 2023.

Holiday destinations, along with cities like Madrid and Barcelona, are expected to benefit the most from this growth, driven by high travel intentions, alongside the recovery of long-haul travel and business tourism in international destinations.

Exceltur expresses caution regarding these historical data, emphasising the need to analyse if these exponential growths are sustainable. Zoreda stressed the importance for the Spanish tourism sector to focus more on its domestic demand to reposition itself and manage its success for increased sustainability.

Benefits and Cost Containment

For the second consecutive year, the results of tourism businesses grew in 2023, driven by increased sales and efforts to contain costs. This occurred despite a rise in financial costs (+18.9%) and labour costs (+7.3%), while supply costs (+9.6%) increased moderately, and energy costs decreased (-2.8%).

The growth in tourism in 2023 translated into intense job creation (95,224 more jobs than in 2022) and improved employment conditions (temporary employment reduced to 8% and wages increased by 4.4%), despite the increasing difficulties in accessing trained personnel. The creation of tourism-related jobs accounted for 17% of the total employment generated in Spain in 2023.

Employment in the tourism sector grew more than in other sectors compared to 2022, primarily favouring permanent contracts. According to Exceltur, the temporary employment rate barely reached 8%, significantly lower than the 13.7% in the rest of the Spanish economy.