Spanish households continue to cut expenses on tourism
Spain is experiencing one of its biggest economic crises of recent decades. High unemployment, increasing taxation and falling salaries have drastically cut disposable incomes in Spanish households. Unwilling to completely give-up holidays, Spanish consumers have cut expenses on accommodation (staying with families and friends), shopping and food. Also, the rising popularity of last minute bookings is a sign of the current high level of financial uncertainty in Spain.
International tourists are more and more in love with Spain
While Spain is suffering from the crisis, international arrivals represent an important source of income for the whole country. Thanks to the government’s policy of tourist promotions and simplified visa procedures, arrivals from China, Russia, Brazil and Mexico are constantly increasing. Food, wine, shopping, beaches and high quality accommodation are the main attractions for these tourists. In addition, many consumers in northern European countries are still in love with Spain and continue to choose the country for their escapadas (short trips) or main holidays.
Revolution in Spanish transportation system
2012 was a year of important changes for Spanish transportation. The year commenced with the bankruptcy of Spanair and this was followed by severe financial problems for Iberia Airlines. Demand for low cost flights drove the flagship company to create a low cost subsidiary ‘Iberia Express’ to cover short flights and compete against low cost airlines. Other low cost operators such as Ryanair, easyJet and Vueling are recording outstanding results in terms of number of passengers carried. However, Ryanair and easyJet have reduced their presence in Spain following the decision of the Spanish government to increase airport charges in Barcelona and Madrid by around 100%. In addition, the inauguration of the high-speed rail line between Barcelona and Paris in early 2013 is also expected to negatively impact demand for short haul flights. While the Costa Concordia accident at the beginning of the year resulted in a drop in demand for cruises, recovery is expected over the coming years.
Crisis boosts demand for private accommodation
Travelling is a strong temptation, even when economic conditions are not the best. As a result, travellers are looking for cheap alternatives and are choosing low cost airlines or looking for private accommodation. Between 2011 and 2012, Spain became the second favourite destination in the world for Airbnb users, both in terms of demand and offer. According to Airbnb, since 2010 there has been a 700% increase in the number of accommodations offered, with Barcelona and Madrid accounting for most of the demand. ByHours is another successful initiative which started operating in Spain in 2012 and allows clients to choose how many hours they will spend in a hotel – a system which helps to reduce prices and enhance occupancy rates.
Spaniards crazy for mobile devices
According to the Spanish Institute of Telecommunications, 12% of total online sales are accounted for by travel retailers and another 12% by flight bookings with other kinds of transportation accounting for 5%. Online bookings are set to grow rapidly over the coming years, especially thanks to the boom in mobile devices. In 2012, more than 55% of the Spanish population owned a Smartphone. However, only a minority of consumers currently use such devices to make purchases online. Tour operators, hotel chains and airlines are betting on this channel in order to improve their relationships with clients and to benefit from new technologies.
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The Travel and Tourism in Spain market research report includes:
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