Monday, June 27, 2005

Government to approve measures to boost tourism Industry

Ministry to grant ? 107 million credit for modernization

Madrid


The Cabinet is due to approve today a series of measures to modernize and drive forward Spain's tourism industry, which accounts for 11 percent of total economic activity and is a source of much-needed foreign income for the country.
The measures include a ?107-million credit line for operators in the sector. Older hotels and resorts will been given access to soft loans to update their facilities as Spain seeks to hold onto its global market share amid growing competition from other Mediterranean countries such as Croatia and Turkey.

The measures were announced Thursday by Industry, Tourism and Trade Minister José Montilla in an appearance before the Senate. The government also plans to complete the regulatory framework for setting up the Spanish Tourist Board to promote the industry.
Foreign tourist arrivals last year hit a record 53.6 million, a rise of 3.4 percent over the previous year. There was also a record number of foreign visitors in the first four months of this year: 13.6 million.

However, tourist receipts, which traditionally help offset Spain's trade deficit on the current account, have been slowing. According to figures released Wednesday by the Bank of Spain, foreigners spent ?4.087 billion in Spain in the first quarter of this year, down 13.2 percent from the same period a year earlier. This along with a ballooning trade deficit was responsible for the current account deficit more than doubling in the first quarter to ?14.768 billion.

Part of the problem lies in the strength of the euro. But as Montilla pointed out yesterday, a growing number of foreigners have bought second homes in Spanish coastal areas. As a result, recent figures on overnight stays in Spanish hotels are "perhaps not the best," Montilla said.
Tourism is also a vital source of employment in Spain. Some 2.3 million workers are directly employed in the tourist industry, equivalent to 12.2 percent of the total national workforce and 20 percent of total employment in the services sector.

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