A new report by business leaders in the Balearics says the local economy is showing signs of “fatigue” after growth fell below the national average in the second quarter of this year.
Data provided by the Confederation of Balearic Business Associations showed that the economy expanded by 2.8 percent between April and June of this year
By contrast, the national average for the same time span was 2.9 percent.
Business leaders also noted that fewer jobs had been created in the local economy than in the previous three-month period.
Fears are now growing that the downturn will continue into the third quarter, despite hotels planning to extend their seasons.
Of particular concern are reports that tourists are spending much less cash while on holiday.
Bar and restaurant owners have reported a significant reduction in takings, saying income has dropped by a huge 20 percent.
This comes despite record numbers of tourists visiting the islands during the summer to date.
Before August, over ten million people chose to holiday on the islands, according to the Balearic Institute of Statistics (IBESTAT).
In July alone 2.5 million tourists visited, which in Majorca meant a 5 percent rise from 2023.
The Balearic Islands are viewed as being the most dynamic region in Spain, with tourism a hugely important part of the local economy.
In 2022, foreign tourists spent a whopping total of €15 billion (£13bn) in the Balearic Islands, 17.5 percent of their total spending in Spain.
Moreover, the direct and indirect average contribution of tourism to the Balearic Islands’ GDP stood at over 40 percent during 2016-2019.
In a further blow to the tourism sector, British Airways has announced it is suspending flights from Southhampton to the Balearics as of next year.
The decision comes just three years after the airline company began flying direct from the city to the popular holiday destination.
British Airways has so far refused to comment on the reasons for its decision but said all passengers who had already booked flights for next year had been offered compensation.
