Spain rides out the storm

In 2011, tourism was one of the few areas of the Spanish economy to record positive growth, partly due to increasing demand amongst foreign tourists as a result of instability in North African countries such as Egypt and Libya and the visit of Pope Benedict XVI.

Strong international promotion via the Spanish Government also helped to attract tourists. By the end of 2011, almost 57 million foreign tourists had visited Spain – an 8% increase from 2010.

Despite the current economic situation, international tourism to Spain continues to grow. Overall, between January and July, Spain received 33 million visitors, representing a rise of 3% year-on-year, while spending increased by 6%, accounting for a total of €31.16 billion over the same period. Paz Casal, Travel and Tourism Analyst at Euromonitor International investigates Spain’s strong performance.

All time high in international tourist arrivals

According to the Survey of Tourist Border Movements (Frontur) by the Ministry of Industry, Energy and Tourism, Spain has experienced a record-breaking number in international tourist arrivals in July this year, receiving a total of 7.7 million visitors, an increase of 4% over the same month in 2011, representing an additional 328,000 people visiting Spain for their holidays, thanks mostly to visitors from the UK, Germany and Nordic countries including Sweden, Norway, Finland and Denmark.

Spain remains the UK’s favourite summer destination

British tourists made up the biggest share with some 1.8 million visitors coming to Spain in July, accounting for 23%. This was the result of good currency exchanges coupled with attractive holiday offers and short flight connections, making Spain a favourite summer destination. The most popular destination for Britons was the Balearic Islands, which include Majorca, Minorca and Ibiza, closely followed by Catalonia.

French tourists were the second biggest source market with 1.3 million tourists, accounting for 17% and representing an increase of 8% over the previous year. But Germany was the main driver for the month, with an increase of 10%, reaching a total of 1.2 million tourists with a total share of 15%, while 479,607 Italian visitors also made Spain their preferred destination in July, with a 6% increase. Among other source countries, tourist numbers significantly increased from the US by 27%, from Portugal by 15% and from Nordic countries by 15%.

International arrivals to compensate for fall in domestic demand

As a result of the uncertainty over Spain’s economy, Spanish holidaymakers are cutting down their spending on travel this year and with domestic summer bookings down by as much as 30% from 2011 (CEAT, Spanish Confederation of Hotels and Tourist Accommodation), therefore international arrivals are levelling out the lack of Spanish travellers.

The poor economic outlook coupled with high levels of unemployment is also changing Spaniards tourists’ habits with travellers increasingly opting for shorter and all-inclusive holidays.
According to the president of the Spanish Confederation of Travel Agents (CEAV), Rafael Gallego, the industry is making great efforts to bring down prices in order to maintain levels of demand: "We are currently seeing prices at levels of 2007…so far this year, the places that depend on domestic demand have dropped 4% or 5%, while those places that cater for foreign tourists have raised prices around 1.5% percent." Overall, industry sources expect domestic tourism to fall by 10% in 2012.

It is expected that the Spanish Government will continue to offer promotions at international level in order to further promote Spain as a tourist destination. Over the last few years, investment in promotion has paid off and the Spanish Government plans to continue with this strategy. It should also be noted that as stability returns to North African destinations, it is crucial that the government continues to promote other non-beach Spanish tourist destinations and tourism products. Efforts will also have to be made to increase average expenditure, with operators likely to focus on attracting tourists from countries with higher purchasing power such as Russia.

For further insight, please contact Paz Casal, Travel and Tourism Analyst at Euromonitor International on [email protected]