Hotel Hiring Spree Lowers Spain’s Unemployment Rate

A sharp uptick in hiring in Spain’s hospitality sector helped rein in unemployment in the third quarter, official data showed on Thursday, as widespread vaccination against COVID-19 drew people back to bars and hotels over the summer.

With almost 80 percent of its population fully vaccinated, Spain has lifted nearly all limits on movement and socialising, allowing most sectors to begin a modest recovery from the pandemic-induced slump.

Data from the National Statistics Institute (INE) showed unemployment fell to 14.57 percent in the third quarter from 15.26 percent in the previous one. Economists polled by Reuters had forecast the rate would drop to 14.20 percent.

Some 359,300 jobs were added over the quarter, with the bulk concentrated in the services and industrial sectors, the data showed. That brought the number of employed people above 20 million for the first time since 2008.

Driving the increase was a 15 percent jump in employment across bars, restaurants and hotels, which benefitted from a rebound in international tourism this summer.

While levels remain around half their pre-pandemic norms, the number of foreign tourists visiting Spain in August more than doubled from a year ago.

Correspondingly, the top tourist destinations of Catalonia and the Canary and Balearic Islands reported the sharpest increase in jobs.

Overall, unemployment has dropped sharply from the 16.26 percent reached a year ago when Spain recorded its steepest quarterly increase since 2012 after a dismal summer season was cut short by resurgent infections.

However, the rate is yet to reach the 13.78 percent recorded in the fourth quarter of 2019, before the pandemic hit Europe and the total number of hours worked remains below 2019 levels.

Workers on a government-backed furlough scheme are not included in the data, meaning the true unemployment figure is likely higher.

While the government forecasts a return to pre-pandemic economic output this year, second-quarter growth undershot initial estimates by a wide margin, casting some doubt on the durability of the recovery.

(Reporting by Joanna Jonczyk-Gwizdala, Nathan Allen and Belén Carreño; Editing by Christina Fincher)

This article was written by Nathan Allen and Belén Carreño from Reuters and was legally licensed through the Industry Dive publisher network. Please direct all licensing questions to [email protected].