Catalonia’s Bid for Independence Is Complicating Tourism in Spain

Last week, Catalan President Carles Puigdemont declared independence from Spain. The move, which followed a controversial referendum, was greeted with wild applause on the streets of Barcelona, where large crowds had gathered to watch the speech.

The onlookers’ delight soon turned to disappointment as seconds later Puigdemont effectively suspended the quest for statehood to continue talks with the Spanish government.

This state of confusion continues still, with nobody quite sure what the future holds for Catalonia. The Spanish government is furious with Puigdemont for failing to clarify his position and has given him until Thursday to rectify that. If not, Spain will look to curb Catalonia’s powers by imposing direct rule from Madrid.

One of Spain’s greatest selling points to foreign tourists has always been its stability — and the movement for Catalan independence poses a threat to that. The industry brings in millions of dollars each year, contributing 5.1 percent of GDP in 2016.

Violent scenes of police brutality that marred the referendum vote were beamed across the world and there is a worry they could be repeated if a mutually acceptable solution is not found.

Should Catalonia push ahead with secession plans, the Spanish government will face the choice of either letting go of its industrial heartland or getting even tougher.

Even at this stage a split still seems unthinkable, mainly because there is no precedent for it in recent European history. Despite this, a number of companies have already moved their headquarters out of the region over fear of a possible split.

Tourism in Spain and Catalonia

Tourism is one of Spain’s most economically important industries. It contributed $63.7 billiondirectly to GDP in 2016, the tenth highest total worldwide according to the World Travel & Tourism Council, and also directly supported 862,000 jobs (4.7% of total employment.)

Last year was also a boom year as the country benefitted from instability in competing destinations to record a 10.3 percent rise in international tourist arrivals. The 75.6 million people it welcomed put it in third place overall behind France and the United States.

Clearly Spain is a magnet for tourists, but it is important to remember that all of Spain does not experience this equally. Mass tourism is concentrated in certain pockets, not only concentrating the financial benefits but also some of the associated problems.

Catalonia is Spain’s most popular region for international arrivals. In the first eight months of this year, it welcomed 13.8 million international tourists, giving it 24% of the national share. Only the Balearic islands offer any real competition. In 2016, Catalonia was the beneficiary of $20.4 billion of international tourist spending, representing 22.3 percent of the overall total.

And at the very top of the tourism pile sits Barcelona. In 2016, it was estimated that the city and surrounding region recorded 34 million overnight stays, putting it more than 10 million ahead of second-place Madrid (another Catalan city, Girona, was in fifth place with 20.1 million).

Overnight Stays

Source: Laboratori de Turisme based on INE data

“The Barcelona tourism image is more powerful than the Catalonia marca and the Spain marca ,” said Josep Ros, chair the Tourism Industry Commission at Catalonia’s Association of Economists.

“20 years ago Barcelona was not a big tourism destination,” he said. “Now it’s more powerful…It’s a perfect destination because it’s all year round, all kinds of segments: leisure, business, congress, and conventions and so on. It’s a very diversified market.”

Why Independence?

Clearly, Barcelona as a city and Catalonia as a region are very important to Spain’s overall tourism picture and removing them would greatly reduce the amount of money the country could bring in from tourism. But even at this stage, that possibility looks some way off.

What is perhaps more worrying (and likely) is a long period of squabbling where uncertainty reigns and nothing much gets done.

The problem at the moment is that no side seems willing to move. In the UK and Canada, Scotland and Quebec, for varying reasons, were allowed to carry out official independence referendums (both coincidentally said no).

“My view is that the Catalan situation is unique. The closest parallel is to Scotland perhaps, but one key difference is that the pro-independence movement in Catalonia has a number of significant forces while the Scottish one is centered much more around a single party,” said Richard Gillespie, professor of politics at Liverpool University. “Both, however, share the context of a unitary state with significant devolution and both are pro-EU.”

There are many reasons for the current situation. Catalonia has a long history that is distinct from other parts of Spain. Inhabitants speak a different language to most other Spaniards. In modern times Catalonia was united against the dictatorship of General Franco who eliminated much of the autonomy that had previously been given to the regions. The current dispute can be traced back to 2006 when a row broke out over the granting of more powers to Catalonia.

David Rodriguez, an economist who works closely with the tourism industry in the Barcelona region, says the inflexibility of the Spanish government is one of the reasons the situation in Catalonia has become so serious.

“Catalans have power to spend but limited ability to raise money,” he said.

Granting more power to the Catalan government might have been able to head of the threat of independence, but Spain cannot afford to do so as giving more money to Catalonia would mean taking it away from another region.

Has the Threat of Independence Actually had an Impact?

The possibility of Catalonia declaring independence is one of several events that have had an impact on the region and its biggest city during 2017.

Spain as a single tourism destination saw an upsurge in bookings on the back of terrorism and other geopolitical issues in other countries that are also popular with European visitors.

This boom has led to a small yet vocal backlash, particularly in Barcelona, against tourism. Skift has chronicled the effects of overtourism in Barcelona and other destinations.

The protestors have been helped by Barcelona Mayor Ada Colau, who wants to rebalance the city’s tourism offering and reclaim it for its residents.

For some like Ros this is a big threat, while others like Rodriguez say the reports of anti-tourist violence such as an attack on a bus over the summer was overblown.

“You have to fill the newspaper, you have to fill the TV with news and you end up running things that during the normal season you would not even mention,” Rodriguez said.

Then there was the terrorist attack in Barcelona and Cambrils on August 17, which killed 16 people and injured more than 130. The incident in Barcelona occurred on La Rambla, one of the city’s most popular tourist destinations.

Attacks in European cities have become more common in recent years and the tourist response to each one varies.

The initial response from visitors and potential visitors is often severe, but demand can come back quickly if the destination falls off the news agenda. Even so, research company Euromonitor suggested that the Barcelona attack could lead to a the loss of 200,000 tourists.

All of these incidents are radically different, but all contribute to the perception of the country as a tourist destination.

Travel intelligence provider Mabrian uses both transactional and behavioral data to try to get a sense of how people feel towards a destination at any one time.

Barcelona, Catalonia, and Spain all suffered big drops in the index immediately after the August attacks. The recovery had largely been complete by the start of September. Then there was another dip – although nowhere near as big – at the start of October, around the time of the independence referendum.

“We did some research after the attacks in August in Barcelona and what we saw was it was a very quick recovery of the security index, faster than in any other cities in Europe that have that have been under attack,” said Àlex Villeyra, Head of Customer Success at Mabrian.

The same indices saw a slight dip after the referendum violence and although it clearly didn’t have, as Villeyra said, the same “drastic effect,” it did have an impact.

That weekend at the start of October, TV news across the world was filled with images of Spanish police attacking voters at polling stations

“Of course people don’t want to go to a place in which you can walk and be in the middle of a demonstration and end up hurt by a rubber bullet or batons,” said Rodriguez, the economist.

No one is sure yet how the cruise industry might have been affected; the European season has pretty much come to a close, but Rodriguez is worried about the valuable North American market.

Barcelona is the biggest cruise port in all of Europe. As well as bringing in long-haul tourists, the fly-cruise market also connects Barcelona residents with other parts of the world and also boosts the flow of goods through air freight.

How Likely is Independence?

From the events that have taken place so far this year, it would be easy to deduce that independence seems inevitable, but not everyone agrees.

Historian John Elliott believes a split is “not at all likely” while Joan Costa-i-Font, an Associate Professor in political economy at the London School of Economics and Political Science, believes it remains in the balance.

“It is hard to say. The EU will pressurize Spain to deliver a better deal,” he said. “If it happens soon, it is likely that breakout will be avoided.”

Both agree that Catalonia’s independence would be a disaster for Spain.

“Spain would lose 30% of its exports, 20% GDP, there will be a recession in Spain and the euro would plummet, as the European Central Bank would have to partially bail out Spain,” Costa-i-Font said. “However, it depends on whether events turn nasty or not. If they turn nasty, they could lead to Spain suspended from EU membership and a wider recession in Europe.”

In this situation, tourism would obviously suffer. Catalonia would likely lose visitors put off by any uncertainty and Spain would lose a sizeable chunk of its income from the industry.

Given what’s at stake, both sides will be hoping for an amicable solution.

Source: skift.com