Everyone in Mallorca Knows It

Tourism made the islands rich—or so the story goes. The data tells a more complicated story.

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Mallorca sells the promise of tranquillity: turquoise coves, stone villages and long lunches beneath the pines—the Mediterranean distilled into a holiday. It sells extremely well. Tourism accounts for 45.5% of the Balearic economy. The islands now rank among Spain’s wealthiest regions, with GDP per head close to the European average.

It was not always like this.

Older Mallorcans remember poor, rural islands where people were expected to know their place. Then tourism arrived. Hoes gave way to bricklayers’ trowels, and fields to towns: a new house, a car, a transistor radio. Within a generation, the Balearics had become a tourism powerhouse and, by Spanish standards, a wealthy region.

This is Mallorca’s accepted economic history. Politicians repeat it. Hoteliers rely on it. Even critics of mass tourism, while condemning the damage it causes, tend to accept its central claim. From developers to campaigners, left and right agree that tourism rescued the islands from poverty. At first, the data appear to support them:

In 1900, the Balearics have a rural, largely self-sufficient economy: almonds, olives, figs and fish. The islands produce most of what they need, but very little surplus. It has been this way for generations.

Many people cannot read. Few have ever left the island; those who do rarely return. They settle in Cuba, Argentina or Algiers and send money home in envelopes that may or may not arrive.

This line traces the Balearic economy in terms of GDP per head: the value produced on the islands, divided by the number of people living there. It edges up, then falls back. For decades—indeed, for generations—the average Mallorcan becomes neither steadily richer nor steadily poorer.

Then comes the Spanish civil war, triggered by Franco’s military uprising. The postwar years bring black markets and ration cards. Older Mallorcans who recall extreme hardship are not exaggerating. In the 1940s and 1950s, the islands are more isolated than ever and, by some measures, poorer than a generation before.

The outside world barely intrudes. The press reports the supposed achievements of Franco and his regime. Tourists are so few that the blue line, which records annual arrivals in millions, appears to sit at zero.

Then the first charter flights land, packed with visitors—Germans and, according to local lore, Swedish women among them. They come for sun and sand. Beaches once considered worthless are soon lined with hotels.

The hotels fill, and they need workers: waiters, bricklayers, taxi drivers and receptionists. A new service economy takes shape on islands where grain is still being threshed by hand.

The blue line—tourist arrivals—soars. The black line—Balearic income—rises with it. One million visitors become two, then three. Within 30 years, GDP per head quadruples.

Five million visitors become 10 million, then 15 million. The economy per person is now ten times larger than it was in their great-grandparents’ day. On paper, the islanders have never been richer.

This is not just the islands’ story; it is my family’s. My grandfather became a bricklayer rather than a cobbler like his father. If you have visited Estany d’en Mas—later marketed as Playa Romántica—or Can Picafort, you have seen buildings he worked on. One of my father’s grandfathers, also a bricklayer, spent years working at the Coves del Drac. My grandmother had worked in the fields as a child; later she moved into town to string imitation pearls for tourists.

They do not need a graph to tell them that the line was almost flat before rising sharply in the 1960s. Nor do my parents. They remember hunger, children dying young and homes without heat.

We cannot know how the Balearics would have developed without tourism. But we can look at places that prospered without it—Extremadura, for example.

Extremadura remains Spain’s poorest region, yet its economy began growing at much the same time as the Balearics’. The rise came later and was less pronounced, but the broad pattern is the same: decades of stagnation followed by sustained growth. With no Magaluf, no s’Arenal, no beach resorts and not even a coast, GDP per head in Extremadura also increased tenfold within two generations.

The same pattern appears in Andalusia, Portugal, France, Ireland and much of Europe. Tourism is not what these places have in common. Their economies were transformed by the forces reshaping the continent after 1950: Spain’s emergence from isolation, freer trade and capital, the welfare state, decades of peace and, eventually, European integration. Tourism was the Balearics’ route into that wider boom, but it was not the boom’s underlying cause.

That raises an awkward question. Would another industry have produced similar prosperity? There is no reliable way to separate tourism’s contribution from all the other forces at work. But we can compare Balearic GDP per head with the European average. That shows whether the islands were gaining or losing ground against their neighbours at any given time.

The chart therefore changes. Instead of plotting income in dollars, it expresses each economy as a percentage of the EU average. A line above 100% is richer than average; one below it is poorer.

The EU average is fixed at 100%. A value of 50% means half the average; 200% means twice the average. In 2022, for instance, Ireland stood at 158%, while Bulgaria, the EU’s poorest country, stood at 54%.

The Balearic line no longer looks flat before suddenly taking off. It rises and falls, moving above and below the European average. This measure is , but it gives a much clearer picture of whether the islands are outperforming Europe rather than simply growing alongside it.

The line also reflects events elsewhere. The peak around 1920 does not mean that the Balearic economy suddenly improved; much of Europe was at war while Spain remained neutral. Comparing the islands with Europe filters out continent-wide shifts, although

The Second World War produces a similar distortion. Spain’s relative position improves as the rest of Europe goes to war, then deteriorates just as sharply. Europe benefits from peace, the Marshall Plan and closer trade links, while Franco’s Spain remains trapped in isolation and chronic shortages.

This comparison dispels the first part of Mallorca’s economic myth: the islands were not exceptionally poor throughout the first half of the century. The second part—that tourism alone made them rich—still appears plausible, because their relative position improves dramatically after 1960. But was tourism really responsible?

It may have helped. German marks and British pounds went a long way in a country still using pesetas. But mattered too. Every Spanish region except Madrid shows a broadly similar rise.

Even if we credit tourism with most of the Balearic surge after 1960, the relationship breaks down in the early 1990s. Visitor numbers did not fall: between then and 2025, they tripled. Yet the islands stopped gaining ground on Europe. The data cannot tell us exactly where tourism’s proceeds went, but they do show that ever more visitors have not brought greater relative prosperity to the people who live there.

Over the past decade, this divergence has become impossible to ignore. More young people are leaving the islands for work—. Residents are being pushed out of their neighbourhoods and towns by holiday lets and rising housing costs. More people are living in caravans, tents or . Politicians now talk more openly about the damage caused by tourism. Yet the debate remains tied to the belief that . Even much of the criticism asks only how its gains should be shared, before retreating to the familiar question: what else would we live on?

Absolute growth tells the familiar story: the islands were poor, tourism arrived and incomes rose. The comparison with Europe tells a different one. Before 1960, the Balearics were not permanently stuck below Spain or the European average; they moved above and below their neighbours, much as they did relative to other Spanish regions. The islands were poor in absolute terms because much of Europe was poor—not because they lacked tourism.

If tourism were still the “economic engine” it is said to be, record visitor numbers should be pulling local living standards upwards. They are not. The Balearics stopped gaining ground on Europe in 1993 and have fallen behind ever since, even as arrivals have tripled. Tourism continues to generate enormous revenues, but it no longer delivers greater relative prosperity for the people who live on the islands—and native Mallorcans increasingly bear its housing and social costs.

The decline was gradual enough to be normalised for years. It took 25 years from the end of the Balearics’ relative economic rise to the first mass protests against tourism. Older generations did not need a graph to remember the poverty they escaped. Young Mallorcans do not need one to recognise the direction of travel. They know they can earn more elsewhere, that Palma is becoming unaffordable to them and that their children are likely to be poorer than they are.

Methodology and data →

Guillem Gelabert Sunyer
© 2026 GGS