Sunday, November 25, 2012

Spanish tourism feels the heat

It's Spain's number one industry and main source of unemployment so it is merciful that tourism has held up well during the crisis.  But is Spanish tourism about to go into reverse?

Probably not, despite a fall in tourist numbers announced recently by researchers FRONTUR.  Overall tourist numbers were down 3.2% in October when compared to last year.

But October is not a key month for the industry and the same survey recorded an increase overall for the first 10 months of the year (total numbers up a healthy 3.1%).

Spain is a tourism superpower with only France attracting appreciably more visitors from overseas every year.  Spain gets twice as many visitors annually when compared to the UK for example.   This is unlikely to change rapidly - Spain has the infrastructure, the regulars (like those that visit their holiday homes or relatives) and a solid brand based on decades of delivering relatively cheap "sun and sand" holidays for families.

But on the flipside Spin needs tourism more so any signs of weakness are a big worry.  Delving into the recent report does suggest a few causes for concern.

There are some big regional variations with some regions, like Catalunya and the islands, doing well but others such as Andalucia (down 7%) struggling.

 Andalucia and its Costa del Sol is an area I know well and I have been a frequent visitor to its hotels and resorts.  It is a big generalisation but I think it represents a weak link in Spanish tourism.  There are a lot of very average hotels and beaches and the Costa del Sol seems to be relying on basic packages and low prices to attract families and those on a budget.  There is not a whole lot to appeal to the choosier, better off segments of the market.

And then there is the question of where all these tourists come from.  Here too the chart suggests a cause for concern:

The UK accounts for fully a quarter of all Spain's overseas visitors, easily the biggest market.  The Brit numbers are down on the month and stagnant for the year.

Maybe that's because of a lack of disposable income in Britain, or perhaps down to the higher flight prices and taxes.  The worry is that Spain has become a bit unfashionable in Britain given all of the alternatives available in more glamorous and interesting settings.

Whatever the cause it is clear that Spain needs to work at maintaining, never mind growing, its tourist base.  The cheap and cheerful sun and sand holidays won't do it.  Marketing more heavily outside of Europe and going upmarket might.  And that is exactly what the tourist ministry is pushing for.

From our website What to do if you get a letter from the Spanish tax office

1 comment:

  1. Strange that andalucia is trying to attract low spending package tourists on the one hand and yet chasing away their more valuable. "permanent tourists" namely the large number of expat residents with punitive inheritence taxes


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