Exploring the Sizzling Attraction: Spain's Competition with U.S. Economic Expansion
"Spain's a bit cheaper, and it's gorgeous," Lisberg, a visitor from the Chicago area, told CNN in Madrid, where she was hanging out with friends before heading to Italy for her study abroad semester. She'd been exploring the Royal Palace and the city's main park, and she loved it. "I adore it here. It's stunning. I'm captivated by the architecture and the culture."
Tourism has skyrocketed in Spain, thanks in part to an influx of American travelers. In fact, it's been a "pivotal" force propelling the nation's economic growth lately, as per the nation's central bank. Spain even toppled the bustling US economy as Europe's quickest-growing major economy last year, according to the International Monetary Fund.
The IMF forecasted Spain's gross domestic product (GDP) would increase 3.1% in 2024, outpacing the estimated 2.8% rise in the US GDP. Spaniard economic development was also robust in 2023, hitting 2.7%.
Though Spain's renowned landmarks and eateries appeal to American tourists, its economy doesn't lean heavily on US sales of goods exports, like other European states do. So, Spain won't endure as much damage from tariff increases on imported goods, as U.S. President Donald Trump threatened.
Carlos Cuerpo, Spain's economy minister, confirmed tourism’s significance to CNN last year. Other experts concurred, like Toni Roldan, director of the Esade Center for Economic Policy, who observed a remarkable surge in the tourism industry, saying, "Tourism... is doing outstandingly well. Plus, the nature of tourism has evolved – it's no longer all sun and beach."
Spanish tourism recorded a milestone: 94 million foreign visitors in 2024, who spent €126 billion ($132 billion) in Spain. Tourism's economic contribution increased, accounting for 12% of Spain's GDP and almost the same share of jobs, according to the most recent statistics.
This tourism boom is linked to a global post-pandemic rebound and the concept of "revenge travel" – tourism's resurgence once travel restrictions lifted. Juan Pedro Aznar Alarcon, an associate economics professor at Esade, noted that families might now see travel as a "life's necessity," having saved during lockdowns.
Four million American tourists visited Spain between January and November 2024, boosted possibly by a strong dollar. U.S. airlines are also taking notice, with American Airlines planning a Chicago-Madrid route in 2025, and United Airlines extending European services into the fall and winter months.
The arrival of around half a million immigrants each year since 2021, adding to Spain's workforce and consumers, has also been a "positive factor" in Spain's economic growth. With Spanish-speaking immigrants from Latin America, integration is relatively straightforward.
Spain mainly relies on natural gas from North Africa for energy, so soaring prices after Russia's invasion of Ukraine didn't prompt a steep rise in Spain's energy expenses. This difference has protected the country from Europe's economic downturn, which was primarily fueled by high energy costs.
Spain's goods exports were responsible for only 1.3% of its GDP in 2023 compared to Europe's 20 top economies, which exported an equivalent 3.1% of their GDP to the US. As a consequence, Spain may cope better with potential U.S. tariffs on European imports.
The World Economic Forum in Davos, Switzerland, observed that Europe itself hasn't escaped Trump's criticism. Nonetheless, despite these challenges, Spain, driven partly by American tourists, is expected to continue outperforming its European counterparts for the next few years.
The surge in tourism, led by an influx of American travelers, has significantly contributed to Spain's economic growth, propelling it to become Europe's quickest-growing major economy last year. This tourism boom, coupled with the economic impact of immigrants and the concept of "revenge travel," has seen Spain's tourism sector accounting for 12% of its GDP and almost the same share of jobs.
In the business realm, American Airlines is planning a Chicago-Madrid route in 2025, recognizing the potential of the growing number of American tourists visiting Spain. Additionally, other American airlines are extending European services into the fall and winter months, reflecting the increased interest in travel to Spain.
