The productivity of tourism

A few days ago, Andreu Mas-Colell published an article in La Vanguardia about tourism productivity and expressed concern about the fact that the weight of this sector—in Barcelona, ​​Catalonia, and Spain—is very similar in terms of both employment and production, which led him to think that "perhaps, in our economy, this sector doesn't subtract from overall labor productivity, but is neutral. And from here, we consider that our productivity problem is even more serious than we think." He added that the issue of productivity is complicated and that he had spent part of his vacation unraveling this issue, but without success: "It doesn't fit with my experience and I haven't clarified it."

Let's see if I can shed some light, and I'll do so by referring to the Spanish economy, as it's the one for which we have official data. Statistics from the INE allow us to easily calculate that the manufacturing industry represents 12% of added value and 10% of employment, which allows us to conclude that its productivity is 20% higher than the average—measured with this limited but effective indicator. However, we cannot perform the same calculations regarding tourism, for the simple reason that it is not a productive sector. However, the INE publishes different accounts than the usual ("satellite") ones that allow it to affirm that tourism makes a "contribution" to GDP of 12.3% and to employment of 11.6%. The ratio between these two figures suggests that tourism's productivity would be 94.3% of the average, justifying Mas-Colell's concern.

Indeed, tourism's productivity is not much lower than the Spanish average.

The INE does not make this division because the figures are not at all comparable to the 12% and 10% figures for manufacturing. To calculate the real productivity of tourism, it is necessary to delve into the accounting and construct the equivalent of an economic sector comprised of productive units that sell only to tourists and that sell them everything they buy.

Having done this exercise—and something else—we arrive at a calculation that this sector represents 5.5% of GDP and 5.7% of employment, which leads to four conclusions. First, tourism has a much lower weight than manufacturing. I'll spare the reader the statistical alchemy that leads to 12.3% and 11.6%. Second, tourism's productivity is indeed not much lower than the Spanish average. This result should not surprise us, since the Balearic Islands, with their monoculture tourism, have a productivity—and, therefore, a GDP per capita—above average. Third, tourism productivity is of interest to us for three reasons: because it is low (the Spanish average is low), because it is declining, and because it has a significant impact along the entire Spanish coast. Fourth, we do indeed have a widespread productivity problem.