In Search Of Excellence: Tourism spend

Exceltur is the alliance for tourism excellence. It is an organisation for elite businesses operating in the Spanish tourism market. Of its 22 members, nine are hotel chains or groups with hotels as part of wider operations. These are: Globalia (i.e. Be Live Hotels), Hotusa, Iberostar, Lopesan, Meliá, NH, Palladium, Playa Senator and Riu. Despite the notable absence of Barceló, the hotelier representation is biased towards heavyweights in Mallorca and the Balearics: five out of the nine are based on the islands.

While this representation reflects the strength of Balearic hotels in the Spanish market, it may also reflect how Exceltur views the world of Spanish tourism, and to get a flavour of this, one only has to consider its report into tourist business valuation for 2014. It is a detailed report but some of its conclusions need to be addressed and queried.

Foreign tourism to Spain increased by 7.1% in 2014, but the Exceltur report finds that this has resulted in a 3.4% reduction in average spend. The principal reason for this, implied by what Exceltur says, is the market for non-hotel accommodation. The report compares the daily spend of a tourist in regulated accommodation (114 euros) with that of a visitor in holiday-let accommodation (67 euros).

There are two points to make about this. Firstly, all holiday-let accommodation ("viviendas en alquiler") appears to be considered to be unregulated. The report refers to tourists staying in hotel and "other types of regulated accommodation" without defining what these other types are: there is, after all, plenty of holiday-let accommodation which is regulated. So, one has to question the definitions.

Secondly, and rather more importantly, the data used come from the tourist spend surveys which are notoriously unreliable in giving a true picture of spend. Apart from the fact that this spend is calculated on the basis of samples taken at airports, ports and border crossings, it is a spend - as I have noted many times in the past - which includes the price of the holiday itself (transport and accommodation). Exceltur has stripped out the cost of transport, but there remains the accommodation and the lack of clarity within the report as to its definition. But, as a general rule, it is fair to say that non-hotel accommodation (an apartment, for instance) does cost less than a hotel and especially a hotel where the upfront cost is for all-inclusive. Because of the cost of accommodation and board, therefore, there is an inherent bias towards a higher spend being attributed to hotel guests.

The spend calculation that Exceltur is using has to be further queried when one takes account of research that has been done at the university. I referred to this in July last year. It found that tourists who rented accommodation spend 30% more while on holiday than tourists in hotels. And the Exceltur report may even support this. The two tourist business sectors which enjoyed the best years in 2014 were car rental and leisure/entertainment; the first of these is certainly one which benefits from increasing numbers of non-hotel guests.

But while Exceltur may be able to take out transport costs for independent travellers, it cannot do this for tourists on package holidays. How can it? The holidaymaker hasn't a clue how much he or she is paying for the different components, and the tourist spend surveys reflect this: a value is therefore given for the total package. This sector of the holiday market rose by 6.6%, says the report, yet it appears to have been otherwise overlooked, and the reason why, or so it appears, is that a link is being made between the type of transport and the spend of the tourist in different types of accommodation. Specifically, the report points to the level of low-cost air travel (up by over 10% in 2014), noting that a much smaller rise in passengers using "traditional" airlines (1.7%) gave a daily spend that was 31 euros higher than the low-cost traveller.

The validity of this distinction is also questionable, though. Low-cost airlines (of varying types) massively dominate the Spanish market. Ryanair, Vueling, easyJet, Norwegian, Air Berlin are in the top seven airlines by passenger numbers (Iberia is another, but almost a third of its total operations are now the low-cost Iberia Express). Their combined market is vast and it is also highly diverse; there are high-spend as well as low-spend passengers.

Reports such as these are typically reproduced in the media from the summarised key points press releases, but when closer attention is paid, a rather different picture can emerge. Exceltur is calling for urgent action against the "unfair competition" of the holiday-lets variety and has backed this up with findings to support its argument. But then, just bear in mind who some of its members are.