Tourism Recovery

Tourism unlikely to recover soon

March 29th

Spain’s tourism industry may not recover until next year and cutting prices alone will not attract visitors to the country’s resorts and cities, according to the United Nations World Tourism Organization (WTO).

“We don’t see any sign of recovery in 2009,” Geoffrey Lipman, assistant general secretary of theWTO, said in a televised interview Friday with Bloomberg. “Spain knows that simply slashing prices is not going to solve the problem.” Lipman said the industry needs to cut costs without damaging investment or neglecting workers, while using innovation and marketing to lure visitors.

Overseas arrivals in Spain in the first two months of the year were down 13.1 percent at 5.4 million, due to a sharp downturn in the economies of its main markets, which are Britain followed by Germany. This was reflected in the hotel occupancy rate in February, which dropped 14 percent from year earlier to 40.3 percent.

Leading Spanish hotel group Sol Meliá is planning to reduce investment by €75 million and is looking for another €25 million in cost savings in response to the crisis, Sebastián Escarrer, executive vice president, said in an interview Friday with financial daily Cinco Días. Tourism accounted for 10.7 percent of Spain’s GDP in 2007.

Spain is the second most popular tourist destination in the world.

El Pais - International Edition
Bloomberg Madrid.

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