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Record tourism earnings

Hotels need to take advantage of the boom years to invest in improving standards

Spain is one of the world’s leading tourism destinations, thanks to a sector that contributes more than 10% to GDP and provides 11% of jobs, while making a significant contribution toward reducing the country’s balance of payments deficit.

This year will mark another record year in arrivals and earnings. In the first seven months of 2016, the number of visitors to Spain rose by 11.1%, reaching 42.4 million. By the end of the year, 70 million people are expected to have visited the country from overseas.

But Spain remains largely a low-cost destination, dependent on visitors in search of sun rather than a quality hotel experience. It is worth pointing out that Spain has benefited from the decision of many holidaymakers to cancel vacations in France and the southern Mediterranean.

Spain’s hotel sector needs to take advantage of the recent boom years to strengthen its position internationally

If the industry is to continue to prosper when visitor numbers inevitably decline, then it must be able to attract higher-spending visitors. In short, income from the recent boom years – which have seen high occupancy rates, bringing in €14 billion this year – needs to be invested in improving standards. This should be relatively easy to accomplish given the many mergers and acquisitions underway in the sector, aided by low interest rates.

Ideally, hotels shouldn’t just be changing hands, but in many cases, a complete rethink about how they are managed is needed by their owners. Increased revenue should be the goal not just from the hotels themselves, but also from other services used by guests. The evidence shows that four- and five-star hotels, which are constantly looking to improve their services, are more profitable in the long term.

Spain needs more higher quality hotels that can provide an alternative to those located in traditional beach resorts and that do not always attract the right kind of visitor. Spain also needs hotels that reflect the country’s history and culture, including its gastronomy.

Despite security threats, global tourism will likely continue to outgrow global GDP, and Spain can hold on to its position as a leading destination, not just for Europeans, but for the all-important Asian market. Spain’s hotel sector, which already has considerable international experience, needs to take advantage of the recent boom years to strengthen its position internationally, while sector associations focus on better management and training.

The future for Spain’s tourism sector lies with consolidating its ability to generate revenue from visitors with interests beyond acquiring a sun tan, and who are prepared to pay for them.

English version by Nick Lyne.

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