Tourist Sector Slump

Tourist sector suffers major August slump

Industry players fear tax hike may delay recovery

The Spanish tourist industry had its worst August in close to a decade as the sharp downturn in the economies of Germany and Britain pushed down the number of visitors from the sector’s main markets. According to figures released Monday by the Industry, Tourism and Trade Ministry, the number of overseas visitors last month fell 8.1 percent from a year earlier to 6.7 million. That was the biggest fall in the month since 2000, while the absolute number of arrivals was the lowest since 2001. The number of visitors from Britain — Spain’s biggest market — dropped 14.4 percent to 1.7 million as the depreciation of sterling against the euro gave British tourists an added reason to stay at home. Arrivals from Germany fell by a similar amount to under 1 million. Germany and Britain together accounted for almost 40 percent of total arrivals in the month. The number of visitors from France increased for the second month in a row but by not nearly enough to offset the impact of the drop in numbers from elsewhere. Overseas arrivals in the eight months to August were also lower, falling 9.9 percent to 36.9 million. Visitors from Britain in the period were down 15.9 percent, the number falling 10.8 percent in the case of Germany. The chairman of the Spanish travel agency association AE- DAVE, José Manuel Maciñeiras, forecast an improvement in the market for this month and the next driven by the fact that both Germany and France emerged from recession in the second quarter of this year. However, industry players are also fretting about a loss of competitiveness deriving from a possible increase in the value-added tax rate for the sector, which currently stands at 16 percent. The chairman of the Viajes Insular travel group and of the industry round-table organization La Mesa de Turismo, Juan Andrés Melián García, said yesterday a rise in VAT could put back the sector’s recovery to next year. “It is obvious an increase in VAT right in the middle of an economic crisis will discourage spending, and therefore, push down the number of trips made during the year,” he said

September 22nd, 2009 El Pais English Edition

Diagram from Las Provincias

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