What is the impact of the drop in tourism on the Baleares economy due to the COVID-19 pandemic?

Abstract

[eng] It has been clearly observed that the Balearic economy is highly specialized in producing goods and services for tourists, and it is very sensitive to changes particularly in non-resident tourism demand. Input output model is used to capture the result of the simulation of a decrease by 92% in non-resident final demand due to the covid 19 pandemic. It recorded that the total effects (direct, indirect and induce effect) for whole economy as proportion falls in total production is 40.09%, in total gross value added is 39.50% and in total employment is 38.31%. If there are such external shocks such as the COVID-19 pandemic, the impact is going to be significantly high on the Balearic economy. In other hand, in Spain, Tourism Satellite Account (TSA) has been published annually at national level, but there was just one publishment of TSA for the Balearic Island in 2014 and it prevents us from analyzing how the tourism industry evolve by time in case of the Balearic Island. However, by analyzing TSA for the Balearic Island, which was published in 2014, it has clearly seen that tourism industry had higher influence on the generating GDP (gross domestic product) around 25.80%, GVA (gross value added) around 22.40% and employment around 29.00% which these proportions refer to total direct and indirect tourism contribution to the Balearic economy. it reveals that tourism’s contributions to the Balearic were significantly high, and the Balearic tourism industry highly depended on inbound tourism expenditure (84.54%) and especially on non-residents who came from out of Spain (72.54%). Tourism trade balance recorded +10,717.4 million euros which represented 93.19% of total tourism trade amount.