The President of the Federation of Spanish Travel Agents, Jesús Martínez, said yesterday that the main reason for the drop in hotel bookings across Spain this summer has been the increase in competitiveness from Eastern Mediterranean countries which are offering cheaper accommodation. According to Martinez the key areas which have hit the Spanish and Balearic markets are Turkey, Greece and the Balkans which last year suffered due to natural and political problems. Martinez said that this year, with the situation back to normal in the Eastern Mediterranean, in order to revive the tourist industries, resorts have dropped their prices to attract the “prudent traveller” who last year holidayed in the Western Mediterranean. But while the Eastern resorts have reduced their prices, Spain including the Balearics have put their prices up and coupled with the poor performance in key international markets, such as in Germany, have had a negative affect on the tourist industry this summer. However, Martinez said that hotel occupancy last month was only one percent off last year's figures adding that the situation has not been as bad as feared at the start of the summer. “While it is still too early to comment on the summer season which continues until the end of September, this year the industry will not be breaking last year's records, but it will still be sensational,” Martinez said. A change in holiday habits in the Spanish domestic market has also helped to compensate for the lack of foreign visitors.

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