Europe has a new economic engine: American tourists
LISBON—The Americans are here, and this sun-bleached coastal city is booming. At bars, hotels and restaurants that line winding cobblestone streets, business is so good that Mayor Carlos Moedas recently slashed local income tax for residents. With economic growth of 8.2% last year and a 20% rise in tax revenue from prepandemic times, he’s also made public transportation free for young people and the elderly.
Centuries-old facades are being polished up after years of neglect. Planning is under way for a new airport, twice the size of the existing one, and for a three-hour high-speed rail link to Madrid in neighboring Spain. The Tribeca Film Festival will come to town this fall.
Room rates in the city are rising, and tourism investment is flooding in. Gonçalo Dias, director and co-owner of the Ivens, a $1,000-a-night hotel in downtown Lisbon, said he plans to add a jazz club in the basement. More than half of his room reservations come from Americans.
“Great times. The best times for the last 45 years," he said. “It’s crazy." Across southern Europe, an unprecedented tourism boom driven largely by American tourists is turbocharging growth in places that had become bywords for economic stagnation, creating hundreds of thousands of jobs and filling the coffers of governments recently shaken by sovereign debt fears.
Even as some worry the boom may be creating other problems, the Mediterranean rush is turning Europe’s recent economic history on its head. In the 2010s, Germany and other manufacturing-heavy economies helped drag the continent out of its debt crisis thanks to strong exports of cars and capital goods, especially to China. Today, Italy, Spain, Greece and Portugal contribute between a quarter and half of the bloc’s
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