Slump in Tourism

Tourism industry catches a cold

The fall in the number of foreign visitors to Spain in July prompts concern
Editorial in International edition of El Pais August 28th 2008

It was only to be expected that tourism, Spain’s biggest industry, would be a victim of the national and international economic crisis. But few expected the symptoms to come on so strong, or for the treatment to offer little hope of a recovery in the short to mid-term. The number of foreign visitors fell by eight percent in July — 623,000 less than in the same period of 2007 and the biggest annual fall in 13 years.

July has traditionally been Spain’s best month for foreign tourists. But this year no region has escaped the decline, with Catalonia and Andalusia, traditionally the most popular destinations, suffering the greatest falls. There is nothing to suggest that the trend has changed for August and September in light of the pessimistic outlook for the European economy, especially in those countries that send the most tourists to Spain — the United Kingdom, Germany, France and Italy.

Hoteliers and restaurant owners say that their business declined by between 25 and 30 percent in July comparedwith the previous year. Domestic visitors are unable to make up for the shortfall. Consumers are being bombarded with news about the poor prospects for the economy in the third quarter, leaving those who have gone away this summer to wonder what they will encounter upon their return to work.

Therefore, there are reasons to be concerned about a sector that until now could boast of healthy and sustained growth. Tourism representsmore than 10 percent of Spain’s GDP and it employs four million people. The declines in tourist numbers will worsen the swollen trade deficit —which has expanded by 11.4 per- cent in the first half of the year — and contribute to higher unemployment.

Joan Mesquida, the secretary of state for tourism, admitted this week that there are reasons to be worried, but he appeared optimistic that the government’s new plan will bear fruit. However, the initiative, which seeks to renovate tourism infrastructure and hotels, will not be easy to put into effect because it will require agreements with regional governments.

Spain’s tourism industry is clearly showing signs of exhaustion. The current economic climate is cause for reflection. It would be good for the sector to remember that the government plans enacted to date have done little more than provide new street furniture and improve road signs. Neither can the problem be averted by subsidies to renovate tourism establishments.Without a quality environment, quality infrastructure and quality complementary offers, Spain’s resorts will continue to be low- cost destinations and vulnerable to future crises.

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