THE “price war” that many Spanish businesses have embarked on during the last few years within the Spanish tourism industry, is putting their profit and future “in serious danger” . This concern was voiced by José Manuel Maciñeiras, the President of the Spanish Travel Agency Business Association (AEDAVE).
The Spanish tourist industry understands the consequences of this price war and has vowed to “stop competing with price policies,” he said.
According to the AEDAVE statistics, the profit from the operations managed by Spanish tour operators fell between 5 and 10 percent last year.
In addition, Spanish hotels have noticed a fall in profits between 15 and 30 percent during the last three years. These statistics are from the Spanish Hotel and Tourist Accommodation Confederation (CEHAT). “The tourist sector has to make a margin of profit if they want to maintain their businesses, they can not simply lower their prices”, said José Manuel Maciñeiras. Therefore, business people in the tourist industry have vowed to stop this price war and “reposition” themselves in the market in order to develop new sectors which are of a high quality and improve profit. “To lower the quality and remove the value of the product, so that they can lower prices, is bread for today and hunger for tomorrow”, Maciñeiras warned yesterday. With regards to the hotel sector, the President of the Madrid Hotel Business Association, Jesús Gatell, said that it must offer “quality and innovation, and not compete on price”. The hotel sector must be “intransigent with their price policies”, said Simón Pedro Barceló, Copresident of the Barceló Hotel Chain.
Hotels must also avoid offering reduced prices for July and August, Barceló added.
The Barceló Hotel Chain has found that there are “good levels of occupation at the contracted prices”, which means that “you do not have to offer discounts which will give the product a bad image”, the Copresident said. “Spain must use all its resources to put a value to its products. It is not necessary to compete by price”, said Felipe González-Abad, Director General of Savia Amadeus. He highlighted that with “a mature tourism product like Spain” it only requires people to learn about “repositioning” their products.
This will make their product different from the rest and allow profits to be improved.