Price wars hinder tourism revenues

THE Costa Blanca’s tourism sector achieved a turnover of €290m in the first quarter of the year, 3.3 per cent less than in the same period of 2014 according to the Bank of Spain.
Price wars to fill the weakest period of the year and the Imserso tourist programme, offering cheap hotel stays for pensioners, is believed to explain why, whilst occupancy figures have been strong, profitability has been low.
According to the Bank of Spain, although foreign demand remains dynamic with the volume of arrivals, this increase is not reflected in economic impact as real income per foreign tourist has been reduced.
The good levels of international tourist entries into Spain have benefited from the economic improvement, the depreciation of the Euro and political instability in competing destinations such as Egypt.
The data shows more visitors to the region, but they are not spending and the Costa Blanca is still trying to shake off the title of being the most expensive Spanish resort in 2014, following a survey by the Ministry of Tourism, behind destinations such as the Costa del Sol, Balearic Islands and Canary Islands.
Jose Maria Caballe, president of Servigroup hotel chain said the problem is that the Costa Blanca and Benidorm have become, especially during the winter, very cheap destinations but spending once here is minimal. He warned that “pricing off season, influenced by the Imserso, is not sustainable for hotels to be profitable.”