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Old February 6th, 2007, 04:43 AM   #1
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Spanish Tourism Threatened by Building Frenzy

INTERVIEW-Spanish tourism threatened by building frenzy
By Ben Harding

MADRID, Feb 5 (Reuters) - Spain's thriving tourist industry is under threat if builders don't stop concreting up its Mediterranean coastline, the head of the sector's main trade body warned.

Last year Spain welcomed a record 58.4 million tourists and hotel groups are predicting another bonanza year for the world's second most-popular holiday destination, helped by security threats in rival markets such as Turkey.

But Jose Luis Zoreda, head of industry organisation Exceltur, said Spain's dominance of Europe's "sun and beach" market could be challenged by the likes of Croatia if nothing is done to slow the building of second homes for tourists.

"We may be converting idyllic coastal destinations into new urban cities. Is that the type of product the new consumer of the 21st century is looking for?," Zoreda told Reuters in an interview.

"In the short term Spain is definitely getting an important economic benefit from construction, but mid-term the destination may suffer. In the last 10 years, the number of properties being dumped all over the Spanish coast is incredible."

Last year Spain built more than 300,000 new housing units on the shores of the Mediterranean and Canary Islands, according to figures from Spain's housing ministry -- almost half the national total, which itself was the highest in Europe.

For hoteliers the breakneck pace of construction is having a doubly negative impact: not only destroying the coast's beauty, but also taking clientele -- both buyers of second homes and those to whom they rent illegally.

Spain's main hotel federation estimates 40 percent of all tourists in Spain organise holidays directly with the supplier who did not register the booking or pay taxes on it -- oversupplying the market and driving down prices.

The cumulative effect, says Zoreda, is a rise in visitor numbers but a sixth straight year of falling average tourist spending in real terms.

The tourism sector accounts for 11 percent of Spain's GDP and directly and indirectly employs 4 million Spaniards.


Torrevieja, south of Alicante, is a classic example of what can happen when a resort has too high a proportion of second homes for tourists, says Zoreda.

"It's like a ghost town for seven months of the year ... There's little income during those quiet months, and no small businesses, so ironically the cost of keeping things running forces the municipality to give more construction licences in order to cover the budget".

By contrast cities such as Benidorm have revived themselves thanks to smart spending on new infrastructure and by maintaining a high proportion of hotels compared with private properties.

Young northern Europeans flock to its sky-scrapers during the summer, but thanks to clever marketing it is now one of Europe's most popular winter spots for retirees, says Zoreda.

The sun and beach market accounts for around 70 percent of the country's tourism, and while weekend city breaks and trips to inland destinations are the fastest growing segments, few see little danger of a serious drop in the mainstay offering.

Zoreda said Spain had to revamp its downmarket destinations and reposition others, such as the island of Ibiza, which is shedding its "clubbers paradise" image to attract more families.

Other regional tourist boards are already making the move.

At Madrid's international tourism fair last week, Andalucia's main stand was displaying images of olive groves, snow-capped peaks and cultural gems like Cordoba and Granada.
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