What the struggling Euro means for tourism in Spain

CostaBravaTouristGuide.com — Few people realize it, but in the list of most-visited tourist destinations around the world Spain ranks in third place, behind France (1) and the USA (2), and ahead of China, Italy and the U.K. (4th, 5th and 6th place respectively)

In recent years the global economic downturn — combined with the rising popularity of cheaper vacation destinations like Turkey, Romania, Egypt and Morocco — resulted in a slight decline in Spain’s tourism sector.

Still, according to the World Tourism Organization Spain in 2009 maintained its position as the second biggest earner of income derived from tourism worldwide (with the USA in first place), and the first in Europe.



Tourism accounts for 11 per cent of Spain’s economy, and earlier this year the Spanish government has increased its tourism promotion budget by 6.4 per cent this year.

Tourism and the Euro

Britain has long been — and continues to be — Spain’s major source of tourists, with an annual 15-16 million British holiday makers crossing the country’s borders.

According to numbers provide by the World Tourism Organization (UNWTO), Germany ranks second with 10 million visitors, followed by France with 8-9 million tourists.

Italy is a distant fourth with 3.1 million vacationers, and the Netherlands is in fifth place — contributing 2.5 million visitors a year.

Visitors from Euro Zone countries will notice little difference in how far their money goes.

However, the weaker Euro makes vacationing in Spain (or any other Euro-bound country) attractive to those who earn their living in other currencies.

Thus while the value of the British Pound has fallen in relation to the Euro, Britons will continue to flock to Spain this year.

The stronger dollars may also contribute to a continued, steady increase in the number of Americans who visit Spain. From 2004 through 2008 their number rose from 8.9 million to 11.2 million tourists.

Quality of Life

Numerous studies show Spain is regarded as the country with the highest quality of life in Europe. But in recent years the real estate bust, combined with a high trade deficit and subsequent high inflation led to a severe economic downturn.

High levels of personal debt and a 20 percent unemployment rate continue to feed an extensive underground economy, with unreported sales and barters and unpaid taxes contributing to the ongoing crisis.

Financial experts are concerned that Spain’s central government has little control over the spending of the country’s regional governments.

Political power in Spain is divided by a central government and 17 Autonomous Communities.

These communities are self-governing, each through their own Generalitat — an autonomous political institution which has exclusive jurisdiction, both legislative and executive, over a wide range of subjects.

Since 1975 the central government in Madrid has handed back much responsibility for spending to the autonomous regions — but without also handing over the responsibility of raising the required taxes. As a result the central government now finds itself unable to gain support for unpopular spending cuts.

Tourism and the Debt Crisis

Tourists who visit Spain from a non-Euro country will marvel at how far their money goes in one of Europe’s top tourist destinations.

Even vacationers from within the Euro Zone will still find Spain a good bargain.

Returning visitors may notice that many of the smaller shops and restaurants have closed. In Blanes, for instance, many pricey fashion boutiques that targeted wealthy weekend visitors and vacation-home from Barcelona have not survived the downturn.

You may encounter slightly higher prices and/or smaller portions than you were used to. On the other hand, owners of restaurants, shops, hotels and others who rely on income from tourism are likely to go out of their way to offer competitive rates and service.

As always, spend your money wisely. Shop around, but don’t try and barter merchants into submission. Pay a fair price.

If you are used to staying in hotels now may be a good time to discover the many advantages of self-catering apartments.

Not only will you save a significant amount of money, but you’ll also gain a whole new set of experiences while living like a local.

 
Vacation at the Costa Brava, or anywhere else in Catalonia, Spain, or the entire rest of the world.
This post was last updated: Jan. 13, 2011    

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This post was last updated: Jan. 13, 2011    

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