How has international tourism demand changed since the pandemic?

In 2023, Spain received 85.06 million foreign tourists, easily surpassing the figure for 2019 and marking a new record. In 2024, the number of international arrivals in the country in the first four months increased by 14.8% year-on-year, indicating that the year has begun with even greater momentum. Having noted that international tourism in Spain has now made a full recovery, we wanted to explore how demand has changed, analysing the spending of foreign tourists in Spain since the beginning of the pandemic by region and by country of origin. To this end, we have taken advantage of the granular nature of the date on international card payments processed by CaixaBank POS terminals, which have been duly aggregated and anonymised and are available on the CaixaBank Real-Time Economy portal.¹²

International tourism spending in Spain has recovered for all regions of origin, exceeding 2019 levels.¹² While the recovery is not based on a single source market alone, which reinforces the strength of Spain’s tourism sector, there are divergences in international demand by region of origin, as shown in the following charts and as further elaborated below.

Western Europe remains by far the main source of international tourists visiting Spain. If we focus on analysing the structure of tourism spending since the pandemic, we see that this is still the region with the biggest share of the total, although it has decreased slightly, from 73.1% in 2019 to 71.8% in 2023. In this period it contributed 68.2% of the growth in international tourism spending and, between January and April in 2024, the nominal tourism spending by tourists from this region was 41.4% higher than that recorded in the same months of 2019. This figure, which is higher than the accumulated inflation in this period, suggests that the level of activity in real terms is greater than in 2019. On the other hand, Eastern Europe has seen its share of total international tourism spending in Spain decline, going from 6.5% to 6.0% of demand between 2019 and 2023, and it has contributed 4.8% to growth in this period, having been impacted by the deterioration of the geopolitical situation in the region following the outbreak of the war in Ukraine.   

The expenditure carried out by tourists from the American continent is the one that has experienced the greatest growth since 2019, substantially increasing its share of international tourism demand in Spain. Between 2019 and 2023, North America’s share of international tourism spending increased from 10.1% to 11.9%, and the region contributed 17.0% to the growth of tourism spending.

During the first four months of 2024, spending by North American tourists grew by 74.1% compared to the same period in 2019, and by 65.7% among travellers from the US, which is the main source market in the region for tourists visiting Spain and is responsible for 82.1% of all North American tourist expenditure in the first four months of 2024.  In the case of Canada, which accounted for 6.8% of regional spending, tourist expenditure rose by 73.7%, and in Mexico, where 11.1% of North American tourism spending came from in the same dates, it rose by 165.9%. These figures are the result of a favourable macroeconomic environment in North America over the past five years, and, in the case of the US and Mexico, the strength of their respective currencies. As for the US, geopolitical instability in competing markets also plays a role, as American tourists are particularly sensitive to the relative geopolitical stability in Spain.¹³

Given that the factors that have supported American tourism will remain present (macroeconomic strength, a weak euro¹⁴ and a turbulent geopolitical situation), we expect that the strength of North American tourism will persist in the medium term and that this region will see its share of international tourism demand in Spain continue to grow.

Tourism from Latin America also stands out for its good performance, albeit with greater variation between countries. In aggregate, we see that Latin America’s share of international tourism spending went from 3.8% in 2019 to 4.3% in 2023, and that it contributed 5.7% to the growth of spending in this period. During the first four months of 2024, spending by Latin American tourists grew by 74.1% compared to the same period in 2019, although this good figure hides significant divergence between the main countries in the region. While tourists from Colombia and Brazil have increased their spending by 206.2% and 77.5% respectively between these dates, tourism spending by Argentines has plummeted by 38.2% in nominal terms. This reflects the divergence of the macroeconomic situation in Latin America, where the relative stability of most of the continent contrasts with the contraction and high inflation in Argentina. This economic weakness has caused Argentine tourism to represent only 8.1% of tourism spending from Latin America, compared to 23.6% in 2019.

In the short term, we expect the good data from Latin America to continue, especially while the commodity cycle remains in an expansive phase. However, the persistence of the unfavourable macroeconomic situation in Argentina makes it difficult to predict a short-term recovery of a market which in 2019 accounted for almost a quarter of Latin American tourism spending.

Tourism spending from Asia and Oceania, which has been the slowest to recover (between 2019 and 2023 its share of the total decreased from 3.9% to 3.1%, representing just 0.7% of the growth in expenditure), also shows very different dynamics from country to country. On the one hand, Singapore, Australia and India have shown the most dynamic performance (in the first four months of 2024, compared to the same months in 2019, tourist expenditure increased by 120.4%, 44.7% and 45.7%, respectively). On the other hand, China, Japan and South Korea, which have been the main sources of the region’s tourists to date and accounted for 33.3%, 7.0% and 13.6% of regional spending in the first four months of 2024, respectively, have had less favourable results. Tourist spending recorded using cards from mainland China and Hong Kong was 19.2% below the level of the first four months of 2019, while Japanese spending was 26.8% lower. Tourism spending from South Korea is 14.5% higher than in 2019, but this still implies negative growth in inflation-adjusted terms.

This divergence is due to macroeconomic factors and, in the case of China, to the prolonged restrictions linked to the pandemic. On the one hand, Singapore, Australia and India are enjoying solid macroeconomic contexts, with strong growth. On the other, Japanese tourism is weighed down by the weakness of the yen, which has gone from 120 yen per euro in 2019 to around 160 yen per euro on average in the first five months of 2024, impairing Japanese tourists’ ability to travel to Europe. On a more positive note, the reopening of the direct air connection between Spain and Japan planned for autumn this year should boost Japanese spending. Finally, Chinese tourism has been constrained by the persistence of the restrictions related to the pandemic, which have delayed Chinese tourists’ ability to travel to long-haul destinations. Thus, the full reopening of China’s economy and the re-establishment of direct air connections should support the recovery of Chinese spending in Spain, although factors such as the weakness of the yuan and the slowdown of the country’s economy could limit this recovery.

The exceptional figures recorded between mid-2022 and 2023 by tourists from the Middle East have declined considerably due to the recent geopolitical turbulence. However, the Middle East has been one of the source regions for tourism that has emerged in recent years, albeit with variations from country to country and volatility in some cases. Spending by Turkish cards has soared by 164.4% in the first four months of 2024 compared to the same months in 2019. The same data for the United Arab Emirates, the region’s main source of tourism to Spain, shows an increase of 65.3%. Tourism from Israel in the same dates stands just 12.9% above the figures for 2019. Despite a real boom in Israeli tourism in 2023, the conflict in Gaza has led to a sharp decline in Israeli tourism in Spain.

We can expect to see a positive performance of tourism from the Middle East in the short term (2024-2025), given the strong growth outlook for the region, driven by a relatively high oil price. Even if growth is positive in aggregate, we expect geopolitical risk to bring volatility to tourism from this region, especially at the individual country level.

As for African tourism spending, it is relatively low, while its share of international tourism demand is very low (0.7% of foreign tourist expenditure in Spain in 2023, compared to 0.8% in 2019).