CONCERNS OVER UK WITHDRAWAL FROM SPAIN

Staff reporter HOTEL Management organisation, CEHAT, believes that the loss of interest demonstrated by some British tour operators in Spanish holiday destinations “is due to a combination of factors”, including the strength of the Euro against the Pound Sterling. José Guillermo Díaz Montañes, president of CEHAT, hit back this week at tour operators which have pulled out of the Costa Brava, Ibiza and Benidorm for the summer 2005. Montañes claims that British tourists are now able to explore new destinations further afield, including Turkey, Croatia, and a number of Eastern or Caribbean countries. This was due, he said, to the fact that the countries concerned have been able to lower their prices significantly as a result of currency devaluation. He indicated that a rise of 3, 4 or 5 percent in tour operators' prices “could mean a significant fall in demand” although he was careful to point out that “we, the hoteliers, are not responsible for the rise”. Díaz Montañes said that Spanish hoteliers have witnessed their own operational costs rising in terms of salaries, production, energy, and now they are faced with the dilemma of having to drop their prices to attract the British “and if we do that, we won't make any profit”; or alternatively, lose the market quota from Great Britain “which isn't advisable”. “On the one had, we are trying to improve the quality of services on offer, and at the same time, we are having to contain costs to be able to continue being competitive” added the president of CEHAT. Nevertheless, he pointed out that the difficulty is not purely a structural problem “which, if that were the case, would be extremely worrying” but also because new developing destinations, especially those outside the Euro-zone, are under cutting Spain for prices. “In the past, Spain has devalued her currency in order to be competitive, but now we can't do that because we are in the European monetary system”. Devaluation was “a tool used by the Spanish government in order to continue being a competitive country, not only for tourism, but also in terms of exports”. With regard to the struggling German holiday market, Díaz Montañés said that the economic recession in Germany over the past three years has also forced hoteliers to keep their prices down.