Tourism firms “worked more for less gain”

DURING 2003, profitability has been one of the major concerns of businesses in the Spanish tourist industry.
Ignacio de Quesada, president of the Nexo group, confirmed yesterday that although the industry had acknowledged some recovery in comparison to 2002, such businesses claim they are still having to “work more for less return”. Quesada was speaking at the presentation of a report on Spanish tourism between January and October this year, given by Juan Andrés Melián, the chairman of the Tourist commission. Fifty-three percent of the firms included in the report declared that they had to bear increased production costs, whereas 39 percent said they managed to keep costs steady and only 8 percent said they were able to reduce them. Nevertheless, 2003 has been “fairly satisfactory”. The repercussions of the Iraq war and the SARS (severe acute respiratory syndrome) virus, which affected tourism during Easter week, were compensated by the summer season resulting in a positive balance of 20'291 million euros, some 5.3 percent more than the same period in 2002. Quesada claimed that the sector had suffered from the consequences of a fall in business from key client markets, namely Germany and Great Britain, although the said fall was compensated to a degree by the internal travel market within Spain. He said that tourism has “an extraordinary capacity” to cope in crisis. Juan Andrés Melián pointed to the fact that some companies had taken a series of economic measures that “had undermined the profitability of hotel establishments in spite of the fact that occupancy levels had been good”. He made specific reference to the “all inclusive” package deal, which in his view, is a “misguided trend”. Imported from the Caribbean, the “all inclusive” deal is appropriate to isolated touristic complexes where it might well be necessary to have all services within the hotel complex because of lack of alternatives in the immediate area. Clearly, this is not the case with Spanish resorts as there are ample complementary services of bars, cafés and restaurants.
The president added that Spain has always presented itself as one of the “cheaper” holiday destinations for mass tourism, but that now prices don't have the same attraction that they did years ago. This means that the country must present itself as a quality holiday destination as much in the field of “sun and sand” as in alternative packages of cultural, gastronomic, inland and sporting tourism.