Europe Has a New Economic Engine: American Tourists
Free-spending visitors are fueling a powerful boom in southern Europe, flipping economic power in the EU. Some economists think it could end badly.
By Tom Fairless
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.”