Late deals: Spain pays millions

The second tranche will be spent in the autumn to promote the individual destinations.
The total flight capacity to Spain for this summer is 22.5 million seats, and all operators report a trend for later bookings. Low Cost Travel Group chief executive Paul Evans said 55 percent of sales on June 1 were for departures in June.

Spanish Tourist Office director, Ignacio Vasallo said: “This has been a difficult year for everyone. Some say they have seen green shoots, others just dry roots. I can't say which is realistic, but things are not as bad now as they were a few months ago. This investment will pull people to the late deals.” In an attempt to remain competitive despite the strong euro, Spanish hoteliers are dropping prices. Monarch overseas purchasing and operations director Hugh Morgan said: “Some hoteliers dropped prices by 25 percent year on year. Those who didn't have suffered.” The hotel industry in Spain will be in total invoicing around 10'000 million euros this year, a 12 percent drop in comparison with 2008, said market researchers DBK yesterday. A spokesman pointed out that in spite of the 1.3 percent upturn in income to 11'400 million euros last year, holiday business in Spain in 2009 has been badly affected by the credit crunch, as have its key client countries. He said that Spain is confronting its competition and low occupancy rates with a major campaign, backed by all major hotel chains. Intense marketing activity, last minute offers, and special discounts - including in the Balearics a free day for every week spent at a regional hotel - are a strategy to enable the “high season” to recover its strength.