Misc 03/01/2021

The visitor industry must survive

Andreu Mas-colell
3 min
La indústria de visitants  ha de sobreviure

For an economy, having natural resources would have to be a very clear comparative advantage. After all, there is always the option of leaving these resources in nature. In practice, however, everything is more complicated. For example, in the 1970s economic analysts noted that in the Netherlands natural gas exports led to an appreciation of the currency that negatively affected the competitiveness of the industry (Dutch disease). In fact, it is easy to find examples of countries where one can doubt that the abundance of natural resources has been a blessing. This could be the case of Venezuela. However, it would be wrong to conclude that it is a curse against which nothing can be done. It is also easy to identify countries where the availability of such resources has been very good for them. Examples: oil for Norway or, in recent times, copper for Chile. The key is good governance. Ensuring this, in the context of an economy that is highly endowed by nature, presents specific challenges - but is not impossible.

In Catalonia the discourse on our economic progress has stressed success despite the absence of natural resources. However, the truth is that in modern times we have discovered that we have one of these resources: the physical environment. And, more recently, we discovered another: our heritage. I vividly remember how I explained to my American friends, in the 1970s and 1980s, that in Catalonia we had a lot of tourism but that it avoided Barcelona, since it was only interested in the northern and southern beaches. Everything changed in the 90's: Barcelona became beautiful, called the world to a big party and we still dance to the sound of the master Gaudí.

Now, the tourist industry is being questioned. It is said to be an industry of comparatively low direct productivity. True, but this does not mean that if we were to ban it it would automatically be replaced by a highly productive economic activity. Moreover, diversification is a very convenient trigger for the resilience of an economy. The Catalan one is quite convenient and, in the mix, the industry of attracting visitors has an important role. With the current crisis, this industry has collapsed and other sectors have held out. In other crises, it is tourism that cushions the blow. We should not try to make the sector even bigger but neither should we try to make it much smaller. The alternatives are not clear enough. To guarantee its future, the traditional industry (automotive, chemical...) has to be modernised. If we reindustrialise competitively we will fill warehouses with robots and not create additional occupation. The service industry will undoubtedly expand. It is in our interest that this translates into highly skilled jobs. It is unlikely that these jobs will be able to absorb tourism workers. In short: we cannot afford to decree the obsolescence of capital and labour in the tourism sector. If California or New York can reconcile vibrant economies and powerful tourism activity, why can't we?

The challenge is how to exploit our comparative advantage, and the formula has to be good management that increases direct productivity in the visitor industry, but also positive synergies towards other economic sectors. We have examples of this. What else gives us good connectivity with El Prat airport? However, we have to work on others. I will mention two.

1. Promoting joint tourism and culture projects would help improve the visitor industry and offer more cultural density in Catalonia. For locals it could represent more culture and more accessibility. Culture is now an attraction for visitors. Especially architecture, in Barcelona. A good initiative is Barcelona Obertura, promoted by Barcelona Global, where the Liceu, the Palau and the Auditori coordinate their programs during two intensive weeks in March. We could go further. Raising, for example, the profile of Barcelona in art events (coordinated with music?). This is an investment that could be very profitable and would not involve large initial expenses. With what the Generalitat spends every year on F1, several exhibitions could be held at the level of the Mondrian show, which can now be visited at the Reina Sofia in Madrid.

2. An acute problem in Barcelona is the lack of affordable rental housing. Perhaps visitors have contributed to the problem, or perhaps they haven't. Nevertheless, what is certain is that they can be part of the solution. For example, visitors will return after the pandemic and initiatives to promote tourist accommodation will reappear. Their regulation, i.e. permits, is in the hands of public authorities. Nothing should prevent permits from being granted on the condition that affordable housing is assured.