Struggling local businesses in Spain and Europe this summer due to spending-avoidant consumers, coined as 'Wallet Zombies'
In the heart of summer, European destinations are bustling with tourists, but a new trend has emerged that's causing concern for the tourism industry. Known as "wallet zombies," these travellers are spending less on food, accommodation, and shopping, opting instead for experiences and free activities.
This phenomenon is particularly prevalent in popular destinations like Mallorca and Pontevedra, where restaurants are experiencing a decrease in customer spending during the peak season in 2025. Visitors are reserving their budgets for essentials only, avoiding extras like beach bars, water sports, and rentals, leading to a 20% drop in umbrella and sunbed rentals in Mallorca in July 2025 compared to the previous year.
The rise of wallet zombies can be linked to several economic and social factors. Euro area bank interest rates on new loans have decreased modestly in 2025, encouraging more consumers to take on loans, including for discretionary spending such as holidays. This, coupled with the rising demand for private sector loans, including households, has led to increased holiday lending, as shown by a 16% increase in holiday loans in Spain's credit agency ASNEF in 2024.
The trend is not limited to Mallorca, but is also present in cities like Barcelona, Madrid, Malaga, and Valencia. In Pontevedra, Galicia, hotel occupancy is very high, but the hospitality sector isn't seeing the same level of spending. The president of the Pontevedra Hospitality Federation (Feprotur) stated that it's a fantastic summer for occupancy but not for spending.
The situation is so dire in Venice that luxury boutiques are reporting empty hands, according to Tokatzian, the president of the Piazza San Marco Association and jewellery shop owner in Venice. He describes the situation as a state of calamity. Tokatzian proposes limiting tour buses and imposing a fee on one-day visitors as a solution to the wallet zombies trend.
The rise of wallet zombies has significant implications for the tourism industry and the economy as a whole. Increased household debt and financial fragility are likely consequences, as more holiday loans increase household indebtedness, potentially making consumers vulnerable to economic shocks or interest rate rises. The phenomenon also refers to consumers who carry ongoing debt loads from discretionary spending like holidays, leading to reduced financial resilience and potential defaults if economic conditions deteriorate.
Regulatory vigilance, responsible lending practices, and consumer education are crucial to mitigate these financial vulnerabilities. The Loan Market Association and European regulatory bodies are active in refining loan market regulations and disclosures to improve transparency, risk assessment, and consumer protection. Banks and lenders could tighten credit standards for non-essential loans, while promoting financial education to consumers about managing debt.
Central banks may also monitor loan growth and household debt levels closely, adjusting rates if necessary to prevent credit bubbles without stifling economic recovery. Support for tourism sector innovation is also vital, as investment in new markets or diversified products may reduce consumer pressure to over-borrow for traditional holiday patterns.
In summary, the rise of wallet zombies in Europe in 2025 is driven by moderately lower borrowing costs and a slight increase in household lending amidst constrained tourism growth. This elevates household debt risks, warranting regulatory vigilance, responsible lending practices, and consumer education to mitigate financial vulnerabilities going forward.
- Travelers in Europe, often referred to as "wallet zombies," are extensively prioritizing experiences and free activities over food, accommodation, and shopping while on vacation, causing alarm within the tourism industry.
- The trend of wallet zombies in the fashion-and-beauty and lifestyle sectors has also been noticed, as fewer tourists are purchasing from luxury boutiques, especially in tourist hotspots like Venice.
- To combat the financial implications of wallet zombies, government bodies, regulatory bodies, banks, and lenders are embracing regulatory vigilance, responsible lending practices, and consumer education to ensure informed decision-making and promote financial resilience among consumers.
