Crises and tourism demand in Spain

Abstract

Over the last 20 years, the Spanish tourism sector has been affected by three very different types of crises: the global financial crisis of 2007/08, the socio-political crisis engendered in the Arab Spring, and the COVID-19 global pandemic. This study analyses how these crises jointly affect the demand for tourism in Spain. To better assess the current situation, the analysis breaks down the total demand into international and domestic segments, which are further broken down and analysed according to the type of tourist establishment. This study was carried out using dynamic panel data models, which were estimated using a Generalized Method of Moments (GMM). The results indicate that the financial crisis did not have negative impacts on global tourism demand in Spain. The Arab Spring had a significant positive effect, while the COVID-19 pandemic had a very negative impact on the demand for Spanish tourism, which was even more pronounced in the case of international tourism demand. The relative impacts vary considerably when different kinds of establishments are considered and when the evolution of domestic tourism is analysed compared to international tourism. We discuss the policy implications in light of these results.