The changing nature of Spanish tourism

Paz Casal, travel and tourism analyst at Euromonitor International, looks at how the financial crisis is hitting Spain’s tourism industry.
 

"Spanish tourism in 2013 is predicted to break historical records in terms of the number of international arrivals, driven by an unexpected rise in tourists as a result of the instability in North African countries such as Egypt and Turkey and a strong increase in traveller numbers from non traditional source markets.

Paradoxically, due to the ongoing financial crisis that hit the country in 2008, the number of domestic tourists is predicted to reach a new low in 2013.

The increase in international arrivals has not fed through to the hotel industry due to the significant drop in domestic demand, current unstable economic environment and shift in demand towards low-cost hotels and other alternatives, such as private accommodation booked online.
2013 a record breaking year

According to Frontur, some 34 million foreigners arrived in Spain between January and July 2013, equating to an increase of 3.9% on the previous year, while spending increased by 6% to reach a total of €32.2 billion over the same period.

Spain’s tourism industry has recovered from a drop of over five million tourists at the height of the crisis in 2009. It is expected that by the end of 2013 the country will have welcomed 59.4 million international arrivals for the first time, exceeding the pre-crisis record of 58.6 million visitors in 2007.

British tourists continue to account for the biggest share (23.5%), with over eight million arrivals in the first half of 2013, followed by Germany and France with respective shares of 16% and 15%. With the exception of Italy and Portugal, there has been strong growth from traditional source markets, but the strongest growth in terms of arrivals over the first six months of the year came from Russia and the Nordic countries, with increases of 31% and 18%, respectively, over the same period in 2012.

Spaniards tighten their belts

Domestic tourism, on the other hand, is at its lowest, with an expected drop in domestic trips for the third consecutive year. According to Spain’s Ministry of Energy and Tourism, the number of domestic trips declined by 6.9% over the first half of 2013. The cause of this decline was Spain’s poor economic outlook, extended recession and record unemployment rate of 26.3%, all of which have dramatically reduced Spaniards’ ability to afford a holiday.

Crisis boosts private accommodation

The changing nature of tourism in Spain, both from international and domestic arrivals, coupled with an unstable economic environment, has led to a shift in demand away from hotels and towards alternative accommodation options. In 2013, hotel sales are predicted to increase by just 0.8% compared to as much as a 34% increase in the use of private accommodation, coupled with more domestic tourists staying with family and friends. Online private accommodation booking sites such as Airbnb and Holiday Lettings are seeing a significant rise in demand for Spanish property for let. According to Airbnb, Spain has become the second leading destination globally for Airbnb users, both in terms of demand and properties offered, growing by as much as 700% since 2010. As a result of this growth, the Spanish government has begun to look much closer at this mainly unregulated market with a view to adopting a legal framework in the coming years."