Tourism revenues rebound in Mediterranean countries

Tourism revenues on the mend in Mediterranean countries

Although visitor numbers have yet to fully recover to pre-pandemic levels, Mediterranean countries are enjoying a much-needed boost, as inflation and the sector’s strong recovery have boosted tourism spending and tax revenues this year.

This positive trend is one of the factors supporting the region’s heavily indebted economies at a time when rising energy prices are affecting both consumers and businesses.

Spain reported on Monday that it received nearly nine million passengers through its international airports in August, about 87% of those who arrived in the same month of 2019.

However, the increase in prices caused tourist spending to stand at 11.26 billion euros ($11.16 billion), almost double what was recorded at the same time last year and only slightly less than in August 2019.

Spain expects tourism revenues to reach 151 billion euros this year, 98% of pre-pandemic levels, when tourism activity earned the country 154 billion euros, according to Exceltur, which groups the main hotel chains, travel agencies, tour operators and Spanish airlines.

The number of visitors to neighboring Portugal exceeded pre-pandemic levels in July for the first time since the end of most COVID-19 restrictions, according to the National Institute of Statistics (INE), with 1.8 million foreign arrivals that month.

This recovery, plus the impact of inflation, contributed to a 21.6% increase in tax revenues, to 5 billion euros.

The italian tourism sector group Assoturismo estimates that 49 million tourists spent at least one night in a hotel during the summer period of June-August, which is still 6.9% less than in 2019.

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However, separate data from the tourism industry association Federturismo confirmed the same pattern as elsewhere: the income of foreign tourists during the period almost returned to their pre-COVID-19 levels, with a decrease of only 0.9% since 2019.

Greece’s Finance Ministry expects tourism revenues to exceed 18 billion euros this year, up from its 2019 record. Net budget revenues for the first eight months of the year were €39 billion, some €5.6 billion above target, thanks to higher-than-expected tourism revenues and higher VAT collection.

However, the Conservative government has promised to allocate most of the fiscal bonanza to energy subsidies.

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