High-end tourism in Spain doubles the revenue of traditional tourism with ‘silent luxury’, sustainability, and intermittent residency as driving forces

High-end tourism in Spain has been on the rise, increasing its revenue between 5% and 8% annually in the last six years, doubling the growth rate of traditional tourism. This surge is driven by trending phenomena like the so-called “silent luxury,” intermittent residents, and sustainable tourism, as highlighted by the analysis “Perspectives on High-End Tourism in Spain,” prepared by McKinsey for Círculo Fortuny, Spain’s leading association in the high-end and excellence sector, on the occasion of the Fortuny Talk held today in Malaga.

The growth of high-end tourism in Spain is booming, according to McKinsey. The number of travelers grew by 20% between 2015 and 2022, reaching six million high-impact tourists last year. In 2022, high-end tourism had a direct economic impact of more than 20 billion euros, contributing around 1.9% to the total GDP of Spain.

Several reasons explain the unstoppable growth of this type of tourism since 2015, starting with the increase in luxury hotels: from 2015 to 2022, five-star establishments climbed by 27%. The takeoff of high-end leisure activities following the pandemic and the increase in high-end tourism flows are other factors bolstering the sector’s strength.

The McKinsey analysis highlights the multiplier effect of the high-end traveler over the classic tourist, generating more value. In Spain, the impact of the former on culture, shopping, and leisure is five times the weight of the traditional traveler. The effect on spending on gastronomy is four times the expenditure of mass tourism, three times the spending on accommodation and transport, and twice the investment in the real estate sector.

Intermittent Resident

Among the growth levers that would allow Spain to match other European markets, Círculo Fortuny highlights the intermittent resident, particularly from northern Europe, who has high purchasing power and generates a virtuous circle of spending in other sub-sectors such as gastronomy, culture, or leisure.

Although Brexit and the pandemic marked a turning point, in 2022 British tourists ranked first in terms of the origin of visitors with 21.1% of the total, slightly below the 2019 figures. Capturing the high-impact British tourist is a pending task following the subsequent elimination of tax-free shopping, which leads the British tourist to move to other markets where VAT refunds are available. However, in 2022 Madrid ranked behind Paris and Milan in terms of the tourist niche from the UK.

Sustainable Tourism

Following the lifting of pandemic restrictions, globally 74% of luxury travelers now declare they are willing to pay more for more sustainable tourist experiences. Six out of ten tourists (61%) say they want to travel more sustainably in the future. Almost eight out of ten (78%) high-end travelers are more likely to choose accommodation if it has sustainable practices.

Silent Luxury

Similarly, “Silent Luxury” is making its way as a non-ostentatious high-end tourism that has led to a 614% increase in searches for this offer on Google. In this sense, reservations in independent, value-unbranded accommodations costing over 1,000 euros per night grew in Spain by 60%, according to Airbnb. This alternative contributes to generating wealth in unique destinations, being decentralized from urban centers and, in fact, is strongly linked to nature and seeking unique experiences that connect with authenticity.

Wellness

Other growing trends are Wellness and Well-being, focused on physical and mental care: 40% of luxury travelers have booked destinations with this purpose in the last five years. Personalized experiences also skyrocket, with 51% of long-haul customers stating they pursue “authentic” experiences on their trips.

Bleisure

Finally to:AI Assistant<|im_sep|>The high-end tourism industry in Spain has seen a growth of between 5% and 8% annually over the past six years, doubling the growth rate of traditional tourism. This trend is driven by emerging phenomena such as “silent luxury,” intermittent residence, and sustainable tourism. The study “Perspectives on High-End Tourism in Spain,” conducted by McKinsey for Círculo Fortuny, Spain’s leading high-end and excellence sector association, highlights these points at the Fortuny Talk held in Málaga.

High-end tourism growth in Spain is booming according to McKinsey. The number of travelers grew by 20% between 2015 and 2022, reaching six million high-impact tourists last year. High-end tourism in 2022 had a direct economic impact of over 20 billion euros, contributing approximately 1.9% to the country’s total GDP.

Several reasons explain the unstoppable growth of this type of tourism since 2015. The number of luxury hotels increased by 27% from 2015 to 2022. The take-off of high-end leisure after the pandemic and the increase in high-end tourism flows also support the sector’s strength.

McKinsey’s analysis emphasizes the multiplier effect of high-end travelers on traditional tourists, generating more value. In Spain, the impact of high-end travelers on culture, shopping, and leisure is five times that of traditional travelers. The spending effect on gastronomy is four times that of mass tourism, three times that of accommodation and transport, and twice that of the real estate sector.

Intermittent residents, particularly those from Northern Europe with high purchasing power, create a virtuous circle of spending in other sub-sectors such as gastronomy, culture, or leisure.

Sustainable Tourism

After the pandemic restrictions, 74% of luxury travelers globally are now willing to pay more for more sustainable tourist experiences. Six out of ten tourists (61%) say they want to travel more sustainably in the future. Almost eight out of ten (78%) high-end travelers are more likely to choose accommodation that has sustainable practices.

Silent Luxury

“Silent Luxury,” a non-ostentatious form of high-end tourism, has led to a 614% increase in searches for this offer on Google. Independent accommodation reservations with no value brand costing over 1,000 euros per night grew by 60% in Spain, according to Airbnb. This alternative contributes to wealth generation in unique destinations, as they are not located in urban centers and are often closely linked to nature and unique experiences that connect with authenticity.

Wellness

Growing trends are Wellness and Well-being, focusing on physical and mental care: 40% of luxury travelers have booked destinations for this purpose in the last five years. Customized experiences are also soaring, with 51% of long-haul customers pursuing “authentic” experiences on their trips.

Bleisure

Finally, “Bleisure” or “Bluxury,” which involves dedicating part of a business trip to personal enjoyment, is gaining significance. The increasing number of millennial tourists and digital nomads influence this new modality.

Andalusia and Málaga, engines of growth

In an analysis by regions, the analysis for Círculo Fortuny highlights how regional growth in Andalusia, the Balearic Islands, and the Canary Islands boosted luxury visitors in Spain until 2022, in addition to the “Madrid effect” and the resurgence of Barcelona.

The example of Málaga is a success story, as it ranks as the fourth province in terms of hotel and tourist accommodation openings in Spain in 2022. Furthermore, it is the Andalusian province with the most Michelin stars. With the awarding of a star to Kaleja, by chef Dani Martín, in late 2022, Málaga had already accumulated 10 Michelin stars in its establishments.

Therefore, the province recovered luxury tourism levels recorded in 2019, with the United Kingdom remaining the leading tourist source (16%). However, it increasingly attracts long-haul tourists, with Americans currently spending the most in the city (€225/day).

Connectivity and museum offerings

Within the equation of high-impact tourism, the combination of cultural and artistic heritage, leisure offerings, luxury shopping, enhancing air connectivity and transportation networks, and promoting the destination effectively through efficient communication that helps build and improve the Brand Spain is vital.

Málaga meets many of these requirements. It has an international airport that is the third busiest in Spain in terms of passenger numbers, after Madrid and Barcelona (United Airlines has resumed direct non-stop flights between New York and Málaga), and it has had a high-speed train (AVE) connection since 2007. Additionally, it offers quality museums, with Picasso as the flagship figure, as well as the Pompidou Center, the Carmen Thyssen Museum, and the CAC. Furthermore, Málaga is one of the major international hubs for the luxury cruise sector and has 31 moorings for superyachts.

According to Xandra Falcó, President of Círculo Fortuny, “Málaga is an example of success, of how good management by the authorities can transform a city. Málaga is now an icon of culture with major international museums where important international hotel chains have landed, thus invigorating high-impact tourism. Spain is on the right track, and it is expected that high-end tourism will double in the coming years, so we must continue working to improve connectivity, streamline visas, and promote the destination at its source to seize a portion of that market.”

According to Carlos Sánchez Altable, Partner at McKinsey, “Spain has great potential for the development of high-end tourism, increasing economic revenue by up to five times compared to traditional tourism. In recent years, the influx of capital and leading international brands has played a fundamental role in the growth and traction of high-impact tourism, creating various upward movements towards new regions, including Málaga, with diverse effects on high-value-added economy.”

In the words of Juan Núñez Insausti, CEO of Puerto Banús, “marinas play a relevant role in high-impact tourism, and Spain has great growth potential in this regard. In our country, there are around 270 boats per kilometer of coastline, while in Italy, there are about 800. This difference is due to three reasons. The first is that the nautical sector has a certain stigma, like skiing or golf in the past. Secondly, there is a tax burden in Spain that reaches 38%. And finally, it takes between 3 and 5 years to lay the groundwork for a port infrastructure due to the strong dependence on public administrations.”

According to Rene Zimmer, Managing Director of Finca Cortesin Hotels & Resorts, “the concern of hotel establishments is to find new talent because without it, we cannot provide quality service or achieve the sophistication and attention to detail we strive for. We rely heavily on our assets in the villages and generate wealth in the municipality. In our case, 50% of employees are residents or natives of Casares. It is necessary to collaborate with authorities and hospitality schools and invest in training to create a passion for working in this sector.”

According to Jacobo Cestino, CEO of Zagaleta, “Málaga is transforming, and for it to reach the level of Sotogrande or Marbella, although it has done its homework and is on the right path, it must understand that authentic luxury does not rush; rather, it allows things to happen gradually and incorporates other elements such as luxury retail or having a beach club to attract major luxury chains.”

Círculo Fortuny is the main Spanish association in the luxury sector and excellence, whose main objective is to serve as a common forum for Spanish family brands and companies in the cultural, artisanal, and creative fields, and to defend their heritage both nationally and internationally. Established in 2011, it currently has 71 members. Since 2011, it has been part of ECCIA (European Cultural and Creative Industries Alliance), the main organization that promotes and defends the luxury sector in the EU, and includes the five main luxury associations in Europe (Círculo Fortuny, Comité Colbert, Fondazione Altagamma, Meisterkreis, and Walpole British Luxury), representing more than 600 companies and brands jointly. For more information, visit www.circulofortuny.com.