What's Happening?
A BBVA Research report has highlighted a slowdown in tourist spending in Spain during the second quarter of 2025. The report indicates a 5.7% increase in card spending compared to the previous year, marking a deceleration in growth. The slowdown is attributed to rising prices, particularly in accommodation and transportation, which may deter both domestic and international tourists. Regional variations are evident, with strong spending growth in areas like Madrid and the Canary Islands, while the Balearic Islands saw a decline. Foreign tourism, a key driver, has also slowed, with growth rates dropping significantly compared to the previous year.
Why It's Important?
The slowdown in tourist spending has implications for Spain's broader tourism revenue, affecting regions that rely heavily on tourism. Rising costs in accommodation and transportation could impact the competitiveness of Spain as a tourist destination. The decline in foreign tourism growth highlights challenges in maintaining momentum amid economic pressures. Domestic tourism has also moderated, with spending increases lower than the previous year. The report suggests potential recovery in the autumn, driven by non-face-to-face spending trends, indicating a possible upturn in tourist bookings despite rising prices.
What's Next?
Despite the current challenges, there is optimism for a recovery in tourist spending in the fall of 2025. The upward trend in non-face-to-face spending on travel and lodging suggests increased tourist bookings, potentially leading to greater growth. If booking patterns improve and interest in Spain's destinations remains strong, there could be a rebound in tourist spending. Stakeholders in the tourism industry will need to adapt to changing conditions and rising costs to capitalize on potential growth opportunities.
