Residents, Tourists and the Beancounters (Part I)

Over here at Spanish Shilling, I have often pointed out the difference (and benefit) to Spanish society between foreign tourists and foreign settlers. Most notably – the former receives enormous media attention, massive investment, endless promotions both at home and abroad, heavy institutional advertising and even a dedicated government ministry along with its regional equivalents. In several communities and resorts, the councillor for tourism is the second most visible politician in the government.

On the other hand, foreign settlers can fend for themselves.

But then, as Spain basks in the huge amount of money brought here by tourism (forgetting that a sizable chunk of this stays in the country of origin to pay agencies, airlines, insurers and so on), along comes something to put the cork in – maybe a pandemic like the one that has assailed the industry for the last two years.

If tourism dropped by 75% in 2021 over 2019 (the last halcyon year for tourism) then foreign residents either stayed the same (they couldn’t sell, what with one thing or another) or even rose in numbers (that’s of course not including those who took out Spanish nationality).

There are over six million foreigners resident in Spain at the present time – up from 4,850,000 at the beginning of 2019. That’s ten per cent of everyone. Some/many of those are immigrant workers, since the largest collectives are Romanian, Moroccan and Colombian, yet the fourth largest group of foreigners currently living in Spain are the British at 282,000 souls. Rather than try and figure out the number of foreign residents who are retired or live from funds from abroad (including a clutch of wealthy Americans, some rich Venezuelans, a few idle Chinese and a sprinkle of superannuated New Zealanders), but not Tommy who works at the campsite, we can only choose a wildly inaccurate number – say 500,000 – to contrast with the tourists, whose statistics thanks to the enormous machine dedicated to surveying them we know down to the last digit.

Figures suggest that the average age of this sub-group of half a million – that’s to say, those who live comfortably in Spain without employment – is around 61 years old, against tourists who are (I’m diving through the INE records) maybe 20 years younger.

Then of course, residents often take trips within Spain – not to all-inclusive hotels on the beach, full of fellow-Brits or Europeans, but to more expensive destinations, such as the Parador hotel chain or to fancy restaurants, or to areas away from the sol y playa; which makes them, in the eyes of the Spanish authorities (if only briefly), tourists.

Hey, that's my old car

So, if the money spent by the wealthier foreign settlers – let’s say 500,000 multiplied by a year’s worth of living – is contrasted by the amount spent by the tourists, then the residents are clearly a group to treasure. At 20,000€ a year (my guess, and we shall ignore the investment of buying both a house and a car) that’s 10,000,000,000€ per year spent by the higher end of the resident foreigners in Spain. The average visitor, here for five days rather than 365, is going to be a lot less.

The official estimate of this once-in-a-lifetime pandemic on the shortfall of tourist money lost to Spain is 160,000 million euros. Last year’s tourist income – 31.1 million foreigners visited – is figured at 34,800 million: nice money if you can get it.

But then, right after the Covid, along comes a war. The fourth wealthiest tourist to Spain per capita is the Russian one, and in 2019, 1.3 million of them came to visit, spending 2,000 million euros. How many Russians will be coming to visit this year? There are some estimates to suggest that the tourist numbers this year could be even lower than the last two years due to the war in the Ukraine.

Maybe next up, there’ll be a tourist bombing, or an earthquake, or something poisonous in the water. Maybe Portugal will drop its prices or Greece will give free ouzo to visitors. Tourists are just fine, they leave money and go away with a sunburn and a hangover. But they are finicky, and without an obligation or an emotional link to return.

But the residents will stay. They have an investment in Spain: their property.

Why can’t the authorities see this? There is so much more opportunity in this field.