The war in the Middle East will positively affect the Spanish tourism sector

BarcelonaThe tourism employers' association Exceltur forecasts that the Middle East conflict will cause a "slight" boost to the sector. According to the organization, in the event of a short war scenario, the refuge effect would have an economic impact of 4,239 million euros in Spain, which represents two points of tourist GDP. Therefore, Exceltur calculates that a significant number of tourists may arrive in Spanish territory thanks to the fact that a relevant tourist area like the Middle East is in the midst of the conflict.

However, in light of this positive incidence, the tourism lobbyalso points to a series of negative effects, such as the increase in energy prices, which will "make travel more expensive and reduce the disposable income of families and businesses". Inflationary risks, supply chain disruptions, or interest rate hikes can also affect the sector, according to Exceltur. The employers' association's calculations also predict fewer arrivals of tourists from Asia, who normally make stopovers in the Middle East. This scenario will result in a revenue reduction of around 400 million euros. 

Also as a result of the war, the executive vice-president of the organization, Óscar Perelli, has called for ensuring the supply of fuels –especially aviation fuel jet fuel– at stable prices. In this regard, the executive vice-president has applauded the measures taken by Pedro Sánchez's government: "From this point of view, the package adopted by the Spanish government to reduce gasoline taxes seems sensible to us." During this past week, Aena has assured that there are currently no problems regarding fuel supply at Spanish airports.

Strong foreign demand

Regarding the balance of the first quarter of the year, Perelli has highlighted the positive strength of demand, driven by foreign tourists. According to data from the employers' association, companies in the sector have increased their turnover by up to 4% compared to the first three months of last year. However, the increase in revenue contrasts with a sharp rise in operating costs –+9% in oil, +8.1% in energy, and +7% in supplies– derived from the Middle East conflict.

The entity's analysis also pointed out that various operational difficulties have been experienced, such as adverse weather conditions or high-speed rail problems following the Adamuz accident. Thus, as Exceltur explained, companies have had to face expenses associated with cancellations, delays, and last-minute purchases. According to the study, this would have affected domestic demand more, while foreign demand has experienced positive growth.