The Economics of Tourism in Barcelona

With vibrant clubs, Mediterranean beaches, iconic architecture, and a lively atmosphere, Barcelona is an ideal tourist destination. However, in recent years, many residents have developed unfavorable views on the impact of tourism in the city. Thousands have repeatedly protested against tourists, spraying graffiti across the city with the slogan, “Go Home Tourist,” and this summer anti-tourist protesters even sprayed water guns at tourists. As is the case in many societies, for some residents, the lack of economic opportunity and rising costs in the city can be attributed to outsiders, and in the case of Barcelona - tourists. This article will aim to understand the economic impact of mass tourism on Barcelona.

When looking at primary macroeconomic factors, tourism seems to be very positive for Barcelona. In 2023, Barcelona welcomed 32 million visitors, with 12 million staying in hotels, hostels, or rental apartments, contributing 9.6 billion euros to the local economy. Tourism accounts for 12.6% of the city’s GDP and directly employs 130,000 people. Additionally, the city is able to collect close to 100 million Euros through tourist-related taxes. (Barcelona City Council). Furthermore, many jobs and foreign investments are generated through tourism-related businesses and services. The data shows that tourism drives strong demand, boosts GDP, creates jobs, and generates significant tax revenue.

Examining the impacts of tourism on a smaller level reveals a different picture. Many residents recognize the key macroeconomic benefits of tourism, but face overcrowding of public infrastructure and resources, a volatile job market, sky-high housing costs, noise pollution, and incentives for criminals to reside in Barcelona. While Barcelona's economy grows at a rapid rate, so do the negative externalities that come with a major tourism destination.

Barcelona's rising cost of housing, up 68% in the past decade according to local authorities, is one of the main issues for the movement (Le Monde). Increased demand for tourist accommodations such as rental apartments and new hotels exceeds the current supply and the rate that supply can increase, resulting in very high housing costs for both tourists and residents. For tourists coming from countries with higher incomes, this may not be an issue for a short period of time, but for residents of the city, where the average salary is only 33,000 euros a year (Barcelona City Council) while the average rent is almost 15,000 euros a year (Keely), this is an issue. Many residents have to move to cheaper, shabbier accommodations, and or cut spending on other goods and services important to them.

Barcelona’s public infrastructure is also further harmed by mass tourism. There is a current water shortage in Barcelona, and millions of tourists coming to the city every year, many less mindful of water conservation, do not help the shortage. Additionally, a study from the Department of Urban Resilience of the Barcelona City Council revealed that over 40 metro stations and one-third of bus stops in the city suffer from overcrowding from mass tourism. It was also found that 60% of city block interiors and 50% of historic parks are affected by overcrowding as a result of tourism (Ajuntament de Barcelona). This overcrowding leads to noise pollution, lack of privacy and comfort for residents, longer wait times, and overstuffing of vehicles in public transit networks.

In addition, due to the seasonal nature of tourism, half of job contracts in the tourism industry are non-permanent, resulting in volatility in the job market (Ajuntament de Barcelona). This non-permanence prevents stable benefits and protections for travel guides, restaurant workers, and hotel staff, leaving a portion of the population vulnerable to shifts in the industry. Furthermore, vulnerable tourists naturally attract pickpockets, which leads to residents also having to deal with petty crimes more regularly (Ajuntament de Barcelona). These crimes are difficult to monitor and are less economical to enforce against compared to more serious offenses, causing petty crimes to remain largely unchecked.

Finally, some residents feel upset over what they perceive as a loss of identity for the city. One of whom is the mayor who stated that Barcelona was turning into a “theme park” (Faus). These issues have generated many policy proposals in Barcelona’s government. Among these are to create tourist free zones, impose higher taxes on tourists, as well as remove all tourist apartment accommodations. Decreasing the supply of tourist housing and disincentivizing tourists from coming to the city can reduce the unsustainable growth side of Barcelona’s tourism industry but it doesn’t address how to solve the negative externalities resulting from tourism. It can also lead to housing black markets, and job and price volatility as demand for the tourism industry and its associated businesses decreases. In order to promote sustainable tourism, Barcelona’s government needs to focus not just on creating anti-tourist policies but rather on how to foster sustainability.

Edited by Baran Pasa

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