As of: January 24, 2024, 1:56 p.m
By: Richard Strobl
Comments
Press
Split
Are Southern Europe threatened with major problems after the tourism boom?
(Symbolic image) © IMAGO/xPolonioVideox
Tourism in southern Europe is still booming, says a new analysis.
Italy in particular is at risk of falling into an economic trap.
Mainz/Munich – During the corona pandemic, tourist numbers in Europe plummeted.
But in 2023, the industry recovered and the numbers even exceeded pre-pandemic levels.
However, according to a current analysis, this is probably a short-term development.
Italy in particular faces major long-term problems.
The Mediterranean countries benefited particularly greatly from the post-Corona desire to travel.
This emerges from a current analysis by the international credit insurer Coface.
Accordingly, southern Europe has developed from a problem into a driving force.
In 2021, 2022 and 2023, Italy, Spain, Portugal and Greece contributed between a quarter and half of the EU's annual growth.
Tourism boom in Europe could become a trap for the south
In general, the EU experienced a record year in 2023.
According to the statistics agency Eurostat, there were almost 2.9 billion overnight stays in tourist accommodation.
So despite inflation and rising costs, people continue to invest in travel.
Due to increased prices and the increase in travel, sales from tourism activities increased by an average of 30 percent in the second quarter of 2023 compared to the previous year - and by 25 percent compared to 2019. In Southern Europe, tourism accounted for more than ten percent of GDP.
In addition, many jobs are created in the labor-intensive sector.
In the second quarter of 2023, 5.2 percent of European workers worked in tourism-related jobs.
In Greece there were even twice as many.
However, according to the analysis, this is only a short-term development.
The desire to travel in southern Europe will therefore level off.
Financial, social and political risks contribute to this.
Italy and Co are threatened with tourism problems: financial, social and political risks
“Due to inflation, it will be difficult for southern Europe to remain cost-competitive with emerging destinations in emerging markets,” says Marcos Carias, Coface economist for the Southern Europe region.
A first indication of this development: The British, who are the most important holidaymakers for Spain, are increasingly traveling to Turkey.
The economist attributes this to the devaluation of the British pound compared to the euro and the simultaneous devaluation of the Turkish lira.
“In addition, climate change has a particular impact on the southern European regions, which are regularly exposed to extreme heat or natural disasters such as forest fires in summer,” the economist continues.
A development that other experts have increasingly warned about. “The Mediterranean will lose massive amounts of tourists,” was the headline of the Italian news agency
Ansa
, referring to statements from tourism experts.
Southern Europe is concentrating on tourism - this poses a great danger
In addition, the dependence on tourism in southern Europe leads to major disadvantages in terms of productivity.
Work in the tourism sector is therefore characterized by workers with little training and precarious working conditions.
However, due to the current travel boom, there is hardly any incentive to become more competitive outside of tourism, according to the analysis.
However, since this is probably a short-term trend, Italy, Spain, Greece and Portugal run the risk of falling behind in the long term.
My news
Heil announces a pension package and defends himself against criticism: “There is no pension at 63 anymore” read
Pension increase in 2024: This is what the pension will look like after reading out 3.5 percent
Important post for pensioners: What the new letter from the pension insurance means read
After Mercedes clear-cutting: car dealerships threatened with extinction read
GDL rail strike: What “Mr. Weselsky likes to keep quiet” read
Germany loses reputation in Davos: “Scholz has no leadership strength” read
Italy is particularly at risk when it comes to productivity.
The reason: Here, the population decline could trigger a permanent labor shortage.
According to the analysis, the working age population will shrink by 11.7 percent by 2040.
An enormous number compared to the values for France (2.4 percent), Spain (4.1 percent) and Germany (4.9 percent).
According to an estimate by Coface, the demographic crisis could almost halve Italy's GDP growth potential as early as 2025.
“When EU fiscal rules come back into force, any obstacle to growth is also an obstacle to deleveraging.
Therefore, the population decline in Italy is a risk factor for the sustainability of public finances,” said Marcos Carias.
Italy is threatened with a tourism trap: are women the solution?
A possible solution according to the analysis: Italy needs to greatly accelerate the integration of women into employment.
55 percent of women in Italy currently have formal employment.
In Spain it is 70 percent.
Many women were integrated into the labor market here in the 90s and 2000s.
According to the analysis, Italy would have to put almost a million women into work in order to increase productivity growth to 0.5 percent annually.
In this way, the budgetary obligations required by the EU could be met.
Alternatively, according to the analysis, the need for foreign workers will increase.