About Miquel Puig Raposo

Economist

There are only two tourism models: a good one and a bad one

As long as our tourism sector is based on the creation of poorly-paid jobs, not only does it create scant value but redistributes this to the benefit of tourists and tourist operators, and to the detriment of the rest of society. The current model is leading us to a serious conflict.

© Maria Corte

We might classify tourism in Barcelona into different models: cruise, congress, architectural and cultural, shopping, stag-parties-and-low-cost-weekends, etc. Each of them has very different characteristics that experts are passionate about and are crucial to workers in the sector. Being neither one nor the other, my point of view is that of a citizen who has to live with tourism, and whose income depends only very indirectly on it. From this standpoint, there are only two tourist models: a good one and a bad one. A good one is that which creates a great deal of value and distributes it properly among the citizens, and a bad one is that which creates little value and distributes it poorly. Tourism in Barcelona is the bad kind, although it is up to us to make it good.

Let us examine this step by step. Tourism creates value and has costs, hence the key is to maximise the former and minimise the latter. It creates value because it creates jobs and because tourists pay to enjoy our heritage: our environment, our setting. Tourism has costs because tourists interfere with the selfsame beauty that they pursue, they cause bottle-necks and make products more expensive. It is all well and good that tourists can eat out near Park Güell, but it is a crying shame that an 8 euro park entry fee has to be charged to restore peace and quiet there.

We have statistics that measure how much tourists – particularly foreign tourists – spend, and since the figures are very high, politicians, representatives from the sector and journalists shout these figures loudly at every opportunity. However, the value created by tourism is not the same as tourist spending. In the latter, the money that does not remain in Barcelona has to be discounted: fuel and the depreciation of the airplane or cruise liner, the cost of the imported articles they buy in Passeig de Gràcia or La Roca Village, and so on. The best way to calculate the value created by tourism is to add up the take-home wages or salaries of tourism workers, the profits of all the companies that operate in tourism and the taxes collected by the public administrations. In our case, this value is low.

It is low because the main part of this value lies in the wages paid to workers that look after tourists, which generally speaking are very low. Very low and very seasonal. Unfortunately, this is an statement that cannot be backed up by reliable statistics, because not only do such statistics not exist, but it would also be difficult to generate them, since “tourism sector worker” is an ambiguous concept: to what extent is a shop assistant on Passeig de Gràcia a tourist worker? What about a newspaper stand worker on the Rambla? Or a taxi driver?

Nevertheless, there are many signs that point us in the right direction: they are provided by the wage data of highly-seasonal sectors (such as hotels, catering companies and restaurants), regions highly dependent on tourism (such as the Balearic Islands) and specific groups: employees hired to serve drinks in beach bars, room-service workers subcontracted by hoteliers, among others.

Finally, we have the macroeconomic figures. For example, income from tourism per capita is no greater in Catalonia than it is in Austria (about 1,750 euros per capita per year) although the pressure from tourism is much more intense in Catalonia than in Austria. The reason is clear: an Austrian waiter earns much more than their Catalan counterpart. Having reached this point, the question is inevitable and crystal-clear: if Barcelona is much more attractive than Vienna, why should tourist workers be paid less to do the exact same job?

A perverse redistribution of value

Tourism has created a lot of jobs, there is no doubting that. But most of these jobs have been taken up by immigrants. I have already said that one cannot speak with any certainty about the tourism employment market, although in this case the signs are also unmistakeable. For example, the following piece of data: so far this century, the number of jobs created in Spain by the sectors usually equated with tourism tallies exactly with the increase in the number of foreign workers. This fact seriously limits the benefits that the wider society of Barcelona obtains from tourism.

But that is not all. The overall impact of low-income workers on society in general is even more important. To summarise: over the course of their life, a person that earns less than 1,200 euros a month will pay much less in taxes (above all due to the VAT charged on what they consume) than the public education, health and social expenditure they will generate. Seasonal workers are entitled to a pension that is greater than the value of the contributions they make. This is all simply the result of a social structure that protects people who earn less and is what characterises us as a civilised society, but it is wholly relevant to any analysis of the distribution of wealth generated by tourism: when a tourist pays for a service rendered by a worker who is earning less than 1,200 euros a month, or who is seasonal, they are being subsidised, as the service provided by that person actually costs more.

Or, to put it another way: to the extent that our tourism is based on the creation of poorly-paid jobs (most of them held by immigrants) not only does tourism create little value, it also yields a redistribution of value that works to the benefit of tourists (and tourism business operators) and against the rest of society, whose impoverishment is embodied in the form of increasingly more congested social services and precarious pensions. The residents of the Barceloneta district protested at the nuisance caused by tourists. What they did not know was that they are also making them poorer.

What is to be done?

Barcelona’s tourism assets are exceptional, as is the success reaped by private and public managers in promoting them. Nevertheless, our tourism creates scant value and is distributed perversely. The solution cannot come from businesses, because this would require either raising the minimum wage or increasing the tax burden. A waiter in Vienna earns more than in Barcelona not thanks to their skill handling a tray, but because that is the way things are. On the subject of taxes, when AENA doubled the rates at El Prat airport and the Catalan Government levied the wrongly-named tourist tax, apocalyptic predictions were heard, although the number of visitors has continued to show unstoppable growth. Businesses do not lose out because they can pass the costs on to the tourist. And tourists will not stop coming to Barcelona just because beer gets more expensive here; if this were the case, they would also stop going to Vienna.

I have been asked to give a prediction for the next 10 years. No doubts here: if we stick to the current model of minimising wages and maximising the number of tourists, then we are headed for a very serious conflict, as this model benefits the few and jeopardises the many. If we manage to pass back to the tourists the real costs they incurr then we, the inhabitants of Barcelona, will be paying a reasonable price for living in a popular city.

Barcelona, where are you headed?

The aim is to consolidate Barcelona as a leading city in Europe. Bringing the project to fruition involves four requirements: a hinterland with a strong economy, communications with the world, the creation of science and technology and an attractive place to live in. How well is Barcelona doing in each one?

© Sagar Forniés

“If we get up early, and when I say early I mean very, very early […], we are an unstoppable country.” Josep Guardiola, 8 September 2011

In our childhood, the image of a modern and dynamic city was epitomised by the American downtown. However, when it actually became possible to build skyscrapers, Barcelona resisted the urge to fill itself with them. Why? Because the locals detested the idea of a neighbourhood that became deserted once evening fell. They sought an equilibrium through the scattering of office areas: “unique” buildings, small clusters in the upper part of Avinguda de Diagonal, on Carrer de Tarragona, and later Diagonal Mar… so that not only would they not put paid to life in the neighbourhoods but would create jobs, giving a new lease of life to the trad­itional fabric – houses, shops, workshops, the places where people socialise. The result was an attractive city to live and work in.

However, despite this conservative city planning, the idea is to consolidate Barcelona as a leading city in Europe. ­Bringing the project to fruition involves four requirements: a hinterland with a strong economy, communications with the world, the creation of science and technology and an at­tractive place to live in. How well is Barcelona doing in each one?

Fortunately, major segments of the Catalan industry – automotive, food, chemical – are still holding out, albeit in a scenario of slow decline: even in terms of the Spanish average, Catalonia is an economy in the process of deindustrialisation. Furthermore, although the port has continued to expand and can leverage the fact that the main sea route now passes through the Mediterranean, it has been impossible to overcome the lethargy of the Spanish State with regard to improving connections with the rest of the world. The city has chosen to put the areas surrounding the port to unre­lated uses (a prison, an audiovisual city, an Olympic Village), compromising the possibility of developing economic activity (logistics and manufacturing) directly linked to maritime ­traffic there. I fear that in this case the objective of creating balanced districts is a mistake, because the port has a great future, but it needs room to breathe.

On the other hand, Barcelona has made a decided commitment to promoting tourism, the beginning of which is associated with the Olympic Games, which unveiled the city to the world in a favourable light: a Mediterranean city that was capable of hosting Games that were both innovative and efficient. The city went on to recover its ability to organise major trade fairs and congresses thanks to infrastructure improvements – the Palau de Congressos de Catalunya, the International Conventions Center of Barcelona, Fira de Barcelona-Gran Via – and, thanks to the dogged efforts of Barcelona City Mayor Pasqual Maragall, at loggerheads with the hotel lobby for this same reason, new hotels. Meanwhile, the port has also made a considerable effort to position itself as a cruise stop-over point.

This initiative has been enormously successful, and Barcelona has become a tourist destination that excels in the professional, cruise, urban and low-cost segments. Among other things, this has been possible because the airport is equipped with a large terminal and a new runway that, while short, is suitable for the majority of incoming flights, allowing it to absorb the tremendous growth of air-traffic generated by the explosion of tourism and still have plenty of capacity to spare. Furthermore, business tourism and cruises have stimulated the slow but steady opening of transcontinental routes that are essential to the city’s competitiveness.

However, progress on the third front, that of “knowledge”, has been more limited. An entire neighbourhood was reclassified as “@22” to specialise in economic activities related to ICT technologies and multimedia. The results have been positive but modest, and at least partly threatened by the desertion of the Telecommunications Market Commission.

However, in this field, Barcelona has benefited from the fact that for fifteen years now the government has made a major effort to develop a scientific pole with its greatest density in the city. Thanks to this, apart from university research teams and large hospitals, Barcelona has some thirty first-class research centres (for genomics, photonics, biotechnology, etc.). One piece of data should suffice to illustrate the magnitude of the commitment: for every researcher that Spain has in Catalonia (in the Spanish National Research Council), the Government of Catalonia (in its equivalent organisation, the CERCA Institute) has four.

Another piece of information demonstrates that the system’s productivity is impressive: per million inhabitants, the fiercely disputed resources captured by Catalan researchers from the European Research Council are only outdone by those captured by Switzerland, Israel, the Netherlands and Sweden. Currently, the Government of Catalonia is spearheading the implementation of a high-level engineering training project.

© Albert Armengol
The port has continued to expand, benefiting from the fact that the main route by sea now runs through the Mediterranean, but has been unable to overcome the neglect of the Spanish State in terms of improving its connections beyond. In the image, the container terminal view from the top of Montjuïc.

It is uncertain whether the government can maintain its commitment to science and technology in the current context of a distressing financial crisis, but whether or not it does so will be the most important factor in determining Barcelona’s strength and prosperity.

Finally, there is the question of quality of life, so zealously safeguarded by the city-planning authorities and the population. The promises not to build new fast roads were forgotten, and forgiven, in the preparation for the 1992 Olympics, which involved the execution of all Porciol’s projects, but also the impressive opening up of the city to the sea. Today, Barcelona is seen as a city with a high quality of life and this, nowadays, is its main hook in attracting investments. However, this quality is threatened by the conversion of several neighbourhoods into theme parks whose sole purpose in life is to serve tourism. Furthermore, a very important part of tourism in Barcelona is that which equates Spain with loose working hours, noise and alcohol. Does it make sense that the same city that put up such a die-hard struggle against the dominance of skyscrapers to save a whole neighbourhood from becoming deserted in the evening should now allow entire neighbourhoods to lend themselves to cheap and bothersome diversion?

It is undoubtedly a suicidal attitude, because the quality of life that really matters in attracting economic activity is not that of the low-cost weekend tourist, but rather the executive who is thinking about settling here. The latter, unlike the former, is the early bird that catches the worm.

Barcelona can become a leading city in Europe, although this does not depend on increasing the number of tourists who stay overnight, but rather on its ability to protect quality of life (threatened above all by cheap tourism), the development of economic activity around its port and its commitment to science and technology. Barcelona can do little by itself in the third field, quite a lot in the second and a great deal in the first. I am not sure that everyone fully realises this.