The cut of almost 40% of the tourism budget line items in the draft General State Budget (OSB) for 2023 fell like a pitcher of cold water. Alliance for Tourism Excellence (Exceltur) says it was “disappointed” when examining budgetary allocations for a sector that already managed to surpass 2019 activity levels this summer, but which has significant future uncertainties due to continued cost increases and consequent narrowing margins.

“It is extremely shocking that tourism, after its key role in supporting the economy in 2022, and in the face of its unresolved and most imminent structural problems, once again deserves a modest allocation in the general government budgets for 2023 for this purpose. ., as well as the dubious way they are distributed, ”they criticize from the employers’ association, which unites large hotel companies and airlines.

“The sector is not yet fully out of the crisis and still has very important vulnerabilities that have dragged on for years,” said the vice president of the organization. Jose Luis Zoreda during the presentation of the summer balance and forecast for the fourth quarter. In addition, he insisted on the need to launch PERTE to transform mature destinations. Something that the government does not consider.

The government will allocate a total of 1,050 million euros for tourism over the next year as part of the general state budget. According to the bill prepared by the executive branch, a total of €779 million (74.1%) will be funded through the Recovery and Resilience Mechanism (MRR). The 2023 item is 39% less than the 1,727 million euro budgeted for 2022, of which 1,474 million euro (85.3%) was funded by MRR.

Beat forecasts in summer

The sector’s forecasts for this summer have been inflated thanks to ever-increasing last minute sales. Of course, all at the expense of reduced margins and business results due to costs, which also exceeded expectations.

Tourism GDP for the third quarter is at a level higher than for the same period in 2019 (+2.7%). According to employers, strong demand offset the unfavorable geopolitical and macroeconomic conditions of recent months, which could indicate a decrease in demand.

In addition, tourism closed September with the creation a higher and more stable level of employment. Social security branches are already 1.1% higher than in 2019, although still below the rest of the Spanish economy (+5.6%), with a notable increase in stable recruitment (temporary tourism level increases from 30.4% in February to 11.0% in February). September 2022).

As for the results, they are strongly affected by rising costs. Energy prices rose by 32.8%, supplies by 18.1% and labor by 10.4%. On the contrary, they assure that prices in the sector as a whole managed to rise only by 8.4%. Thus, the performance of the company becomes more and more asymmetric. According to Exceltur, those with more differentiated products/brands and more scale to improve cost management hold up much better.