Thread: Is the credit crunch going to affect the Tourist Trade?

I have read all sorts of articles on this subject and it seems to be that most of us will take a holiday this year despite the credit squeeze. The Spanish Tourist board seem cnfident that the 16% deficit last year will be overcome in 2009.
I seem to agree in one respect as everyone is talking about non euro countries like Spain and Egypt, where costs are low, but for how long?
These non euro countries are soon going to cotton on that they are under estimating themselves and will in the course of time, increase costs in accordance with the amount of tourists.
Living in the Costa de Sol, I find that every summer food prices are increased to fleece the tourist but we as residents also have to bare the brunt of these price increases.
What are your views on this?????

Hey keddyboy great topic. If you have read my book you will know my personal thoughts on this...

Here is something I came across the other day, take a look at this:

Spanish Economy Facing Systemic Economic Meltdown

Spain may be following Iceland as the next country facing systemic economic collapse due to the global financial and economic crisis. Recently released macroeconomic data is illustrative of a national economy in free fall. Not even the United Kingdom, with its insolvent banks and a collapsing currency, is in as decrepit economic shape as is Spain.

Economic data suggest some very tough times ahead...

There exists another parallel with the United States. As the Global Economic Crisis evolved, the Socialist government in Madrid led by Prime Minister Zapatero, as with the Bush administration in the U.S., at first denied the nation was in the throes of a virulent economic recession. Only when the dire facts overwhelmed political spin did both governments begin to face reality. By then, in both Washington and Madrid, it was too late. As with many other panic-stricken leaders across the globe, Zapatero will seek massive deficit spending as a means to stimulate the failing economy. Being a member of the eurozone with its own central bank, monetary policy falls outside the immediate purview of options available to the Spanish government. So fiscal stimulus, inevitably hampered by an inability for a left-leaning government to talk soberly to labor unions, will be the feeble response to the worsening disaster.

Typical... Official statements have constantly been trying to highlight positive predictions. Only weeks later these predictions become complete lies.

I believe in April / May we will see what we can expect for summer in regards of tourism...

But just on a side note: Ibiza last year had a ridiculously low amount of tourists in August! And back then the credit crisis hadn't even began...

Also, don't underestimate the Euro/Pound exchange rate....

My taken is tourism will not bring in the revenue the government is predicting. People paid in GBP having seen such an erosion on spending power....

The other double wammy is that people like us are also cutting back for example up until this year we travelled back and forth on a monthly basis but we have tightened our belts......

There is absolutely no doubt in my mind that the Zapatero Government is sleepwalking into the mother of all financial meltdowns. They have no idea what to do and with the classic Spanish shrug are just ignoring it...watch this space!

LOL I love the emoticon country boy!!!

Well, I haven't seen any slowing down of bookings in the self catering market here - quite the opposite in fact, thank goodness. but we did keep our prices in stirling to help out a bit.
Bookings have been unusual, with Russians and Middle East potentials appearing for the first time.

And that goes for us to Anis ,still people booking holidays in Benalmadena,even last minute bookings ring us for vacancies one day fly the next had a few of them this month thank goodness as you say

I guess the proof of the pudding will be when the government count the actual taxes versus forecast taxes at the end of the year. Another indicator will be tourist numbers come October (mind you that might just show actual spend versus f/c spend per adult is down ;-))

I have read that Europe (and the Euro) are behind the curve re-bad news, that being the case ?, we may well see the Euro falling against the Dollar/Sterling as confidence starts to drift away.

Even in bad times your average Brit will always try & take a holiday & they will always choose the old favourite Spain (bye & large)
Price will be critical of course & those (most) establishments/hotels/bars who can cut a better deal will do OK (IMO), late bookings will be the name of the game I guess

Brian







Here is a little info that "may" be relevant that I have copied...............

CEP News) - With the euro zone falling into its deepest recession on record and leading indicators suggesting that the downturn will be prolonged, economists are looking for the European Central Bank to bring down its main refinancing rate to record lows in 2009.

According to advance estimates from Eurostat, the euro zone economy contracted by a record 1.5% in the fourth quarter of 2008 compared to the previous quarter. Economists had expected a more modest fall of 1.3% following Q3's 0.2% decline.

Germany led the way in declines, contracting 2.1% in the fourth quarter. Conversely, Slovakia was one of the few economies to show any gains over the period, rising 2.1%, according to preliminary estimates.

Year-over-year, overall output in the monetary union shrank by 1.2% -- its sharpest pace in series history -- lower than both the 1.1% contraction expected and Q3's annualized gain of 0.6%. Looking at 2008 as a whole, GDP growth slowed to 0.7%, down two percentage points from the rate in 2007.

Although details will not be made available until early in March, indicators released recently suggest that the decline was broad based, BNP Paribas economist Clemente De Lucia noted.

Consumer sentiment and retail figures point to weak consumption levels, while deteriorating business confidence and falling capacity utilization point to low investment," De Lucia said. "Lastly, the slowdown of global demand should have weighed on exporters."

Furthermore, while the record fall in overall output indicates that the recession will be a deep one, leading indicators such as the purchasing managers indexes and the EU Commission's economic sentiment figures, suggest that the recession will also be long lasting. .