HOTELS CUT THEIR PRICES IN BID TO SAVE THE SUMMER

SPANISH hotel owners are cutting prices for the peak summer season in a bid to attract late bookings from Britons and Spaniards and compensate for a slump in German tourists, industry spokesmen said yesterday. Britain and Germany are the staple markets for Spain's foreign tourist industry, which makes up around six per cent of gross domestic product.
Spaniards holidaying at home account for a further six per cent. “People are booking much later this year so it's hard to forecast, but for the year as a whole we're expecting at best a rise of about two percent in the number of foreign tourists,” said Valentin Ugalde, secretary general of the Spanish Hotels Federation which represents largely urban hotels. “There's still a lot of uncertainty. We're hoping the home market will save the season in many areas, which is what happened at Easter,” he told Reuters.

Hotels in the Balearics and the Canary Islands, Spain's most popular tourist regions, are already cutting prices to fill rooms in July, he said. “In the rest of the country we're looking at price rises this year of two to three per cent, below the Spanish inflation rate (four per cent at the end of 2002).” Majorca, Minorca, Ibiza and Formentera depend heavily on German tourism and are looking at their second dismal summer in a row. “We're already working with price cuts of 15 to 18 per cent for the first half of July,” said the Majorca Hotels Federation spokesman Juan Antonio Fuster.

Initial prices for this year compared with last were anyway unchanged or up by at most two per cent, he added.
German tourists, as well as suffering the effect of a sluggish home economy and growing unemployment, had been put off by an environmental tax on tourists imposed in the Balearics last year and a stream of comments from the outgoing left-wing government about the detrimental impact of tourism, Fuster said. “In the end, the impression was that Majorca doesn't want Germans,” he added.
The hotel industry, which naturally does want Germans, now has a huge task ahead of it to reverse that, he added.
Of the 52 million foreign tourists who came to Spain last year, 15 million were British and 10 million German.
Britons dominate in Andalucia and the Canary Islands and while the British and the Germans enjoy a pretty equal 40 per cent share of the Balearics, the number of Britons is increasing and Germans fallng.