36% of Spanish Tourist Industry Expect a Better Summer
July 20th, 2011
Despite the 13.9% growth of foreign tourism in Spain in the second quarter of this year, many businesses are still wary of the predicted increase in revenue in the sector over the summer season.
The arrival of summer has kick-started tourism enterprises in Spain and 36% of businesses in the sector sees an increase in sales over the same period of 2010, according to data presented last week by the Alliance for Tourism Excellence (Exceltur). Exceltur’s confidence indicator measured a fall of 68% among Spanish tourism companies in the second quarter compared to the first three months of 2011.
The companies who do have confidence in improved revenues for the season are those which depend mainly on foreign tourism, such as the Balearic and Canary Islands. Overnight stays by foreign tourists in Spain have increased by 13.9% in the second quarter, exceptional growth which, according to Exceltur, is associated with the decline of tourists travelling to countries like Egypt and Tunisia, where demand has fallen by 40% and 45% respectively, between March and May. “Many of the tourists who would normally go to these countries have chosen Spain instead, because of political problems in the Arab world,” said Jose Luis Zoreda, executive vice president of Exceltur.
The other side of the coin is the fall in tourism of the Spanish in their own country. Domestic demand has fallen by 4% in the second quarter, which neutralised in part the surge in growth of foreign tourism and slowed the increase of GDP from 2.4% in the first three months of the year to 1.9% in the second quarter. Exceltur anticipate a GDP growth of 2.2% in the sector for the whole of 2011.
Although Exceltur’s expectation is for growth above the average forecast for the economy, Zoreda stressed that it may not result in improved margins saying, “although energy and labour costs are continuing to rise, the unfavourable situation in the sector at the present time is preventing firms from increasing their prices accordingly”.
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