57.1% of Balearic tourism-orientated businesses saw a drop in trade last year

Exceltur not overly optimistic about this year's prospects

Whilst the number of tourists holidaying in Spain last year dropped by 2%, Egypt and Turkey saw welcomed increases of 19.1% and 13.4% respectively

Nunca vista

Madrid. The Balearic Island will again be represented in the Fitur travel trade fair this week


F. Naumann
Sant Lluís

Exceltur, the main national travel trade body representing companies with an accumulated turn-over exceeding 25 billion euros and activities in over 175 countries worldwide, sees Spain's tourism industry in a crisis which started last summer and will not be overcome until 2010.

"Spanish tourism has not been resistant to the crisis and the change of the economic cycle", Exceltur's Executive Vice President José Luis Zoreda commented during a press conference detailing statistics on the industry's results achieved last year and its expectations for 2009.

According to Zoreda, 2008 saw a varied development with a positive assessment during the first half but a "180 degree turn" as from the summer and a very marked decline during the last three months from October to December. Data collected by the Banco de España and released by Exceltur indicates that Spain's earnings from foreign tourists dropped by 4.1% during the first ten months of 2008. According to Exceltur's recent business climate survey, 63.1% of Spain's enterprises involved with tourism recorded a decrease in sales in 2008. An even larger share, 75.3%, reported a reduction in their profits. Spain's Gross Domestic Product (GDP) generated from tourism declined by an estimated 1.1%.

The classic 'sun and beach' product suffered particularly, loosing considerable market share to eastern Mediterranean countries. While the number of guests visiting Spain dropped by 2%, Egypt recorded a 19.1% and Turkey a 13.4% increase in the number of foreign tourists.

With regard to the Balearic Islands, Exceltur's statistics indicate that 57.1% of the archipelago's tourism-related enterprises recorded a drop in sales last year, against a 42.9% share which saw sales growing. Similarly, around 60% of those surveyed recorded lower profits while 40% saw an increase in comparison to 2007. Hotel nights spent in the Balearic Islands declined by around 2% in 2008.

Exceltur's predictions for this year are not very optimistic. Based on currently available data the association predicts a further 3% decline in Spain's tourism-generated GDP in 2009, arguing that the sector is unlikely to recover until 2010. Income from tourism is expected to fall 5.7% this year as booking figures are considerably lower than in the past, with both the national source market and several of the most important foreign markets intensely weakened by the economic downturn and the financial crisis.

The United Kingdom is one of the most seriously affected source markets. Exceltur's President Sebastián Escarrer Jaume said "for the first time in history" no British tour operator has been operating flights to the Balearic Islands with its own aircraft this winter.

José Luis Zoreda revealed his particular concern regarding the great number of Spanish jobs dependent on tourism. Employment levels dropped in 2008 and a recent forecast about growing unemployment in the hotel and travel agents sectors suggests that the number of jobs lost could reach 100,000 by May 2009. This would correspond to a drop of some 6%.

One of the few positive items of news comes from the aviation industry. Decreasing fuel prices have lifted some of last year's cost pressure from this travel trade segment, an impact which will be noticed in the airlines' 2009 results.

Repositioning of Menorca
The recent release of Exceltur's statistics has strengthened concerns about the further development of tourism in Menorca. In an interview published by this newspaper last Thursday Exceltur's Vice President José Luis Zoreda called for a stronger commitment to use Menorca's potential as a tourist destination and to reposition the island in the market with new products.

Zoreda criticised "the lack of social conviction" regarding the necessity to develop tourism as the island's most important economic sector. "The Menorcan society has to be aware that its progress, its chances for future prosperity lie increasingly in repositioning its tourism opportunities, since it is difficult to attract great industrial investment", Zoreda stressed.

He suggested that the island should "reposition with new products", aiming to be more upmarket to an adjusted number of tourists since a mass-tourism approach concentrating on 'sun and beach' brings Menorca into competition with much cheaper countries. "In order to go to the beach a middle-class family from Manchester can choose Turkey which is 30% cheaper", Zoreda argued, pointing out that today's tourist "has more alternatives, more places to go to, and is more demanding". "Offering quality is the minimum", the tourist expert argued, "someone who does not offer quality cannot even participate in the game. However, apart from that it is necessary to offer different elements. In addition to quality one has to offer experiences, illusion, magic, entertainment: a tourist wants to discover, to dream, not just to cover his basic needs". With regard to these requirements Zoreda affirmed that Menorca had "the ingredients to build experiences" and "to fit into the seven-star league" but required a change towards stronger social commitment to develop tourism. "If you will allow me a play on words: it is necessary to proceed from 'how to live from tourism' towards 'how to live for tourism'".
As far as 2009 is concerned, Zoreda confirmed Exceltur's rather pessimistic prognosis. "Conceivably it will be a complicated year", he commented, explaining that destinations "which have an indifferent product will suffer, particularly if they appeal to markets with economic and unemployment problems such as Spain and the United Kingdom".

With regard to his call for new products - which could, amongst others, include exploiting cultural events or the island's history - José Luis Zoreda referred particularly to golf, explaining that "for a northerner, playing golf in January, although it feels cold to us, can be a great pleasure".

Fitur opens in Madrid
Tomorrow sees the start of Fitur, Spain's most important travel trade fair, which will be held in Madrid until 1st February.

The trade fair, now in its 29th year, has also shown clear signs of the economic downturn. The number of exhibitors has dropped by 17.5%, resulting also in fewer foreign countries being represented.

For Menorca's travel trade Fitur is traditionally an important event and numerous local tourism professionals will travel to Madrid in order to attend the fair.


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