In tourism, it's now time to decline. At least, relative to previous growth rates. We'll see how society experiences a process of this nature. We'll see it from a variety of perspectives: will maintaining record visitor numbers year after year constitute decline? Of course, from the perspective of maintaining the figure, which would already be a milestone, this would imply a zero growth rate! Will recording growth rates lower than those of the past be perceived as decline? More of the same: in terms of growth rates, but increasing less rapidly than before, will it be considered a failure, despite reporting absolute increases in visitors? Is it necessary to decrease in absolute terms, or would it simply suffice to replace one type of tourist with another, considering greater productivity—that is, greater income generation per employee—as a satisfactory improvement? For the same turnover, it may not be necessary to have so many tourists if they are more willing to pay.
All these issues require a differentiated judgment. From what we know so far, new investors in the tourism sector want more visitor growth, and at higher rates than in the past. In fact, they aspire to accommodate new demand, not subtract from existing demand, without competing with that of others, which always requires greater business demands. Entrepreneurs who enjoy thestatus quo I think the current market, not the new entrants, have already discovered that maintenance is enough for them, and they would even accept a zero growth rate, since this would allow them to maintain profitability. They know that the entry of new investors can degrade the existing offer, not only with even lower initial prices, but also with massification that would cause quite a few negative externalities, deteriorating the quality (little or much) that exists today. The strongest entrepreneurs in thestatus quo They would even like, today, to replace visitor demand: fewer people spending more, guaranteeing a total number of constant income in real terms, at least.
In any case, many entrepreneurs try to maximize their surplus in absolute figures (subtracting from the cash flow what must be paid to employees, and understanding that excess demand inflates costs). This is particularly the case for those who consider equipment as a sunk cost or already amortized capital. In relative figures, based on euros invested, the appeal is already less. In general, when the relative surplus ceases to matter, the entrepreneur may be tempted to seek a positive growth rate, however small, by increasing supply. Meanwhile, the process of massification is facilitated by subsidized kerosene, transport that does not cover the environmental cost, and visitors who do not pay, through taxes, for the social effects they generate.
Unlike previous employers, workers care about what they take home (beyond the cost of employment to the company and any theory of deferred wages) relative to the type of effort the work requires. Informal payments, housing conditions, stress, and so on are handled for a few months, only to slumber in the underground economy for the rest of the year. This is a bad piece of cake for a healthy economy: without greater productivity, the entrepreneur who appropriates the business's residual surplus says he can't pay more. However, analyzing well-being, from productivity or remuneration per employee, we must ultimately arrive at per capita income, which is the important factor; and in the Mediterranean model of well-being, at gross disposable family income, which is the ultimate refuge for many citizens. That is, we move from the macro to the micro, to a figure affected by the employed/passive ratio (children, the elderly, and the unemployed), net of taxes and subsidies. both monetary transfers and services that the public sector provides in kind and does not need to be paid for. The availability of income must then be reflected in purchasing power: housing, social space, public services. All of these elements are now putting increasing pressure on public finances, in the absence of a productive model that better compensates workers in the sector.
It was last century when, in Menorca, I faced the error of not understanding that the success of an economy lay not in the growth rates of gross value added (GVA) or in the number of employed people, but in the generation of per capita income, in real terms, as I have indicated. I did so by comparing the situation in Ibiza with the denigrated Menorcan economy, branded as retrograde and conservationist. It was the primary confusion between income and assets; between flow and stock; between income statement and balance sheet. Later, I conducted an extensive analysis in the Principality, within the State. Fortunately, today more economists have correctly identified the problem.
