UK visitor numbers to Spain were down 17.7% in the first quarter of 2009 - and tourism officials and tour operators believe the fall of the pound against the euro is to blame.
Speaking at the Love Andalucia British Tourist Trade Forum in Malaga, Spanish Tourist Board director Ignacio Vasallo said the decline in numbers - which has seen UK visitors to the Andalucia region fall 18% - was down to a perception that the country is 'too expensive'.
At the same event, Monarch Group overseas director and head of purchasing Hugh Morgan urged Spanish hoteliers not to increase prices, arguing that exchange rate changes could already see operators facing rises of up to 23%.
But On Holiday Group Steve Endacott believes the 2009 lates market could see Spain and other eurozone countries bounce back.
Writing for the website of TW sister magazine Travolution, Endacott said Spanish and Portuguese hoteliers are pushing out low price deals to stimulate demand:
Brochure sales have been focused on non eurozone destinations such as Turkey and Egypt, with eurozone destinations having sold badly, for example, Menorca and Majorca.
But in the lates market the majority of charter flight seats left to sell will be eurozone destinations at low prices.
Spain has also been hit by a major economic downturn, which has impacted domestic bookings. With occupancy levels 50% lower than last year many Spanish hoteliers are dropping rates much more aggressively than Greek or Turkish hotels, who do not need to or cannot go much lower.
The bed bank sector is geared up to bring “distressed hotels” to the market quickly. Combining these with cheap charter or low cost carrier seats will create very aggressive lead prices - 15% of a £1,000 dynamically packaged booking is more profitable than 12% on cheap late deals from tour operators.
The key battle ground this year will be fought on who can bring distressed hotel stock to the market quickest. It will be an interesting battle between the major bed banks with traditional operators not even considered contenders.
Forum: Is Endacott right?
Will we see a swing back to the eurozone? Discuss what you're expecting from the lates market...
My Tenerife website (using both bedbanks and tour ops) has been getting a lot more searches for "cheap" than at the start of the year but conversions are still lower than last year.
With the cost of certain no frills airline tickets over the school holidays already, traditional tour operators could be on a winner. Question is will they hold their nerve or will we see silly pricing?
Nick, Broadland Travel
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