Business

Barcelona attack targets Spain’s strongest spot

People gather around an impromptu memorial two days after a van crashed into pedestrians at Las Ramblas in Barcelona, Spain

People gather around an impromptu memorial two days after a van crashed into pedestrians at Las Ramblas in Barcelona, Spain  

Tourism accounts for about 14% of Spain’s GDP

Deadly attacks in Barcelona target Spain’s strongest spot: tourism. At least 13 people were killed on Thursday when a van drove into pedestrians at Las Ramblas, one of the most tourist-friendly sites in the country’s second city. Other European tourist hubs have bounced back from similar assaults. Spain, which is economically stronger than it has been in years, will too.

Tourism accounts for around 14% of Spain’s GDP, compared with 9% for neighbouring France, and is therefore a major driver of an economy which is still recovering from a painful financial crisis. That makes Thursday’s mass murders a strike on prosperity as well as people.

‘Excessive tourism’

Tourism may be affected, as it was in France, which has suffered several deadly attacks in the past few years. Spain’s last large-scale attack, the bombing of Madrid’s Atocha station in 2004, targeted commuters rather than tourists. But visitor numbers would probably have eased, even without the attack. Residents of cities including Barcelona have protested over the heavy burden of what they see as excessive tourism leading to official curbs on new hotels and beds being made available. And of Spain’s 75 million tourists in 2016, one in five came from Britain, which has seen its own currency weaken sharply since its vote to leave the EU. That makes overseas trips more expensive for Britons.

Still, Spain has some economic protection. First, growth has bounced back after the eurozone crisis. The country’s GDP grew by 0.9% in the second quarter of 2017, its fastest in two years, and close to its fastest rate since 2007. And unemployment fell to 17.1% in June from 19.9% a year earlier, the biggest decrease in the European Union, according to Eurostat.

Second, the more such attacks happen in big cities, the more their impact on tourism is mitigated. After London, Berlin, Nice, Manchester, Paris and Brussels, it’s clear such incidents can happen virtually anywhere, making it pointless to avoid any particular city or country.

Shares in companies tied to Spanish tourism, like NH Hotel Group and Melia Hotels, fell only slightly on Friday.

The assault on Barcelona, claimed by Islamic State on Friday, is by no means an attack on Spain alone and it will not defeat the country’s recovery.

(The author is a Reuters Breakingviews columnist. The opinions expressed are his own)

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Printable version | May 30, 2020 8:55:44 AM | https://www.thehindu.com/business/barcelona-attack-targets-spains-strongest-spot/article19525067.ece

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