The Balearics tourism industry has been in Madrid this week for Fitur, one of the major tourism/travel fairs of the winter. Fitur is, therefore, an occasion for the islands' industry and government officials to hobnob with tour operators, airlines and others. Deals will be made and announcements will provide evidence that everything is rosy in the Balearic and Spanish tourism gardens. But even before Fitur got underway, there was the Global Tourism Forum, an event which seems specifically designed to allow politicians to say how good things are (well, it is organised by the national ministry for tourism after all). Suitably enough, there was Mariano Rajoy using data which shows how tourism grew last year to support his wider message of economic growth. This wasn't, however, a message that was well received by various organisations in the tourism industry; organisations such as CEHAT, the Spanish hoteliers federation, and Exceltur, the alliance for tourism excellence. They accused Rajoy of hijacking the tourist data for electioneering purposes, while arguing that, as tourism is proving to be so crucial to economic growth, the government should be doing more to help it by, for instance, reducing IVA. This call for a reduction in the tourist rate (currently 10%) has been a familiar one for several years, and just as familiar has been the refusal of the government to lower it.
José Manuel Soria, the tourism minister, closed the forum by considering the brave new world of the digital economy and how Spain was preparing for it. The country's tourism competitiveness will be enhanced by Spain becoming an "intelligent destination", which is one of those bits of jargon, like sustainability, that tourism politicians enjoy throwing around without ever actually explaining what it means. Meanwhile, the Balearics Tourism Agency was announcing its own version of tourism intelligence - the "Escaparte Turístico Inteligente" no less. And this is? Well, it means intelligent tourism showcase and it is an information system which may prove that the agency hasn't been sitting on its intelligent backside for the past couple of years after all. Long in the promise, it is, or should be, the grand system for social networking and all manner of new ways of tourism management and marketing that we have hoped for. But until it is actually up and running, we will have to hold back our excitement for the moment.
Someone else who was able to quote tourism statistics in Madrid was President Bauzá. The number of tourists coming to the Balearics in 2014 rose by 580,000, making 13,580,000 in total (in 2013 there had obviously been bang on 13 million tourists). 2015 should be even better, especially as a 10% growth in domestic tourism is being forecast. Putting something of a damper on the 2014 performance were the figures released by the national statistics institute which showed that overnight stays in hotels in the Balearics fell by 4% in 2014 (nationally they were up by almost 3%). So, how does one explain the apparent contradiction between what equated to a 4.5% increase in the number of tourists and the 4% drop in overnight stays? The answer will doubtless lie, once the hoteliers get round to explaining this with their usual propaganda, with all the tourists who don't stay in hotels and prefer to fill the pockets of the unfairly competing owners of private apartments and other unregulated accommodation. This may indeed be so, but Bauzá can't have it both ways. He can't brag about increases in tourist numbers while at the same time siding with the hoteliers and decrying a source of tourism growth. He will, though, don't worry about that.
There is, though, another way of interpreting the contradiction, and that is that tourists are opting for shorter holidays in ever greater numbers than previously. And, somewhat ironically perhaps, the new world of the intelligent, digital tourism economy facilitates this greatly, especially because it is the technologically and digitally switched-on Millennial generation which is characterised by its preference for more but shorter holidays. Furthermore, the regional government, with the assistance of Palma 365, is actively encouraging shorter stays through the promotion of city breaks.
Showing posts with label Overnight stays. Show all posts
Showing posts with label Overnight stays. Show all posts
Friday, January 30, 2015
Friday, September 26, 2014
The Worry Of A Fall In Tourist Spend
Mario Draghi, the president of the European Central Bank, is not someone you would necessarily expect to crop up in a tourism article, but what he said earlier this week merits that he does. Draghi suggested earlier this week that recovery in the Eurozone was losing impetus, pointing to a stalling of growth during the second quarter and to indicators through the summer which have been weaker than expected. This economic performance cannot of course solely be attributed to activity in the tourism sector, but tourism does play a key role in measuring this performance.
Questions are often asked about the tourism spend statistics which get trotted out with monotonous regularity and which, for many, appear to bear little relationship with evidence on the streets and terraces of Mallorca's resorts. These statistics are far from perfect, but it needs to be remembered that their principal function is one determined by the Bank of Spain and, by association, the Central Bank and European institutions. They feed into economic performance measures, and so when, as was the case in July this year, Spain shows a slight fall in tourism spend (1.3%), there is cause for a few eyebrows to be raised and for foreheads to be furrowed.
This fall in expenditure seems odd because the number of tourists has been at record levels, as they have been in Mallorca. So, how does one explain the decrease? The simple answer is that tourists are spending less, but this isn't only because tourists are being more careful with their money while on holiday. They are also staying for shorter periods. Overnight stays for July and August combined rose by only 0.2% (a figure for Spain as a whole). When tourist arrivals increase by almost 9% (as they did in August) but overnight stays barely increase at all, you get what is in fact the situation. There is simultaneously a mini-boom in the number of tourists and a contraction in tourist expenditure. And it is this contraction that concerns Draghi and should also concern the national government in Spain and the regional government in the Balearics.
The announcement by Spanish finance minister Cristóbal Montoro of some relaxations in the pipeline on tax has been very welcome, and in the context of tourism, these may well filter through to the domestic market, which has already shown good signs of recovery this summer and which has been helping to fill the void left by a significant fall in Mallorca's Russian market. But Spain can't affect the expenditure of tourists from other countries. Draghi is calling for "unconventional measures" to counteract a lack of credit, and it would certainly appear to be the case that unless there is more credit (and more employment) in the Eurozone (and the UK) the contraction in tourist expenditure will continue, thus producing an unwelcome cycle which might ruin some of the good work the Rajoy administration has been doing. In addition, there is the Russian question. This market, hampered by obvious events, by sanctions and by the exchange rate, is enduring a genuine crisis, reflected by the numerous bankruptcies of Russian tour operators, many of which were not on a firm financial footing anyway. The bankruptcies will only help to further deter Russian tourism to the island and to Spain, and with everything else occurring in Russia and Ukraine, next summer is looking distinctly uncertain.
So, there is a double whammy of what had been a rapidly growing market being in crisis and of expenditure contraction in stable, long-established markets. Record numbers of tourists might sound all well and good, but records or not, there are some serious questions to be asked about next summer.
Questions are often asked about the tourism spend statistics which get trotted out with monotonous regularity and which, for many, appear to bear little relationship with evidence on the streets and terraces of Mallorca's resorts. These statistics are far from perfect, but it needs to be remembered that their principal function is one determined by the Bank of Spain and, by association, the Central Bank and European institutions. They feed into economic performance measures, and so when, as was the case in July this year, Spain shows a slight fall in tourism spend (1.3%), there is cause for a few eyebrows to be raised and for foreheads to be furrowed.
This fall in expenditure seems odd because the number of tourists has been at record levels, as they have been in Mallorca. So, how does one explain the decrease? The simple answer is that tourists are spending less, but this isn't only because tourists are being more careful with their money while on holiday. They are also staying for shorter periods. Overnight stays for July and August combined rose by only 0.2% (a figure for Spain as a whole). When tourist arrivals increase by almost 9% (as they did in August) but overnight stays barely increase at all, you get what is in fact the situation. There is simultaneously a mini-boom in the number of tourists and a contraction in tourist expenditure. And it is this contraction that concerns Draghi and should also concern the national government in Spain and the regional government in the Balearics.
The announcement by Spanish finance minister Cristóbal Montoro of some relaxations in the pipeline on tax has been very welcome, and in the context of tourism, these may well filter through to the domestic market, which has already shown good signs of recovery this summer and which has been helping to fill the void left by a significant fall in Mallorca's Russian market. But Spain can't affect the expenditure of tourists from other countries. Draghi is calling for "unconventional measures" to counteract a lack of credit, and it would certainly appear to be the case that unless there is more credit (and more employment) in the Eurozone (and the UK) the contraction in tourist expenditure will continue, thus producing an unwelcome cycle which might ruin some of the good work the Rajoy administration has been doing. In addition, there is the Russian question. This market, hampered by obvious events, by sanctions and by the exchange rate, is enduring a genuine crisis, reflected by the numerous bankruptcies of Russian tour operators, many of which were not on a firm financial footing anyway. The bankruptcies will only help to further deter Russian tourism to the island and to Spain, and with everything else occurring in Russia and Ukraine, next summer is looking distinctly uncertain.
So, there is a double whammy of what had been a rapidly growing market being in crisis and of expenditure contraction in stable, long-established markets. Record numbers of tourists might sound all well and good, but records or not, there are some serious questions to be asked about next summer.
Thursday, October 17, 2013
Is It Time For A Mallorcan Tourist Tax?
Why is Catalonia's tourism performance of interest and why in particular is information regarding stays of interest? The answer is Catalonia's tourist tax. It was introduced at the end of last year. It has not resulted in a fall in either the number of overnight stays (on which it is charged) or in the average length of stay.
One can always look to external events in order to explain tourism performance. Those in Egypt and Turkey can be and are used to partially explain why Mallorca's tourism performance has been better this year. So they can also be used to explain performance in Catalonia. But setting external events to one side, the fact is that Catalonia's tourism appears not to have been unduly affected by the introduction of the tourist tax.
While the CCOO has been producing its report, the hotel association on the Costa Daurada, which includes Salou, has been producing its own report. Included in this is a call for hotels and the private sector to have a greater say in how the tourist tax is used, as it is devoted to tourism promotion. This in itself is interesting. Nowhere does the report question the tourist tax, merely how it is allocated and who gets to decide. And this is a hotel association.
Last month, the Catalonian minister for enterprise and employment announced that the number of foreign tourists between January and August had risen by 6% over the same period in 2012. The figure is therefore higher than the CCOO has reported. Even allowing for different means of calculation and different motivations for presenting information, the government and the union agree that there has been an increase. And this increase had, by the end of the second quarter this year, contributed to bringing in 19 million euros from the tourist tax. The expectation is that, once the high-summer quarter is factored in, the tax will have raised 42 million euros by the end of the year.
Catalonia attracts more tourists than Mallorca and the Balearics. An indicator of this is that by the end of August the total number of tourists was already higher (11.35 million) than that which the Balearics can probably expect for the whole year. Though a larger market, Catalonia isn't that different to the Balearics, except in one quite important regard. It has a very significant camping holiday market, while the number of hotel places is in fact lower than the number for the Balearics. The hotel lobby in Catalonia is, while powerful, not as all-powerful as it is in the Balearics. It is revealing that the Costa Daurada hotel association appears to have embraced the tourist tax, and this contrasts with how the Balearics hoteliers perceived the old eco-tax. They were horrified and did whatever they could to get rid of it. And they succeeded.
The Catalonian tourist tax is different to the eco-tax in that it is not discriminatory. All types of accommodation are included. The eco-tax placed the onus on hotels and excluded certain types of accommodation. It was partly because it was discriminatory that there was the level of objection that, not unreasonably, there was.
Opposition parties in the Balearics, notably the Més grouping, continue to press for the introduction of a tourist tax. The regional government has consistently rejected the call. The hoteliers have made it perfectly clear that they don't want one. But Catalonia has shown that the tax does not seem to have had a negative impact. It will provide funds for tourism promotion of the level that the Balearics can only dream about.
A tourist tax would be unpopular, but there is a moral argument for one as well as an economic one. Tourists use resources for which they do not contribute in a direct monetary way, unlike businesses and residents. A tourist tax for the Balearics does at least deserve a new and full debate.
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