Next to the construction and financial sectors, the hospitality industry was hit hardest during the economic crisis. 50,000 establishments closed their doors because they were not able to stay in business when clients stayed home and revenues fell. Many workers in the industry had the same luck when they tried to set out on their own. Some opened bars and restaurants, but were forced to close.
Tax hikes have worsened the situation and also affected the beverage industry to the point that a well-known drink company had to take out an advertisement supporting the bars in an effort to improve its sales. The trend hails back to last year when 3,500 new establishments opened.
The hospitality sector accounts for most of the 65,774 jobs that were created in April. Two factors that influenced the hiring rebound are the start of the tourist season and increased domestic spending. Spain continues to see record numbers of foreign travelers and this brisk business is revitalizing the national economy and increasing consumer confidence.
Even though it looks like the sector has hit bottom, it is too soon to claim that it will only get better from here. If it wants to make the most of the coming recovery, the industry needs the government to follow through with its tax reforms in order to lower taxes on beverages and labor.
