"A hard Brexit would be catastrophic for tourism" | Economy

"A hard Brexit would be catastrophic for tourism" | Economy

This Mallorcan man of 48 years whose father has already transferred all the powers in the largest Spanish hotel chain It has the busiest agenda every day. Recently appointed president of the Alliance for Tourism Excellence (Exceltur), the lobby of the large companies in the sector, Gabriel Escarrer expects a year of stabilization of tourism and better results for Meliá than those of 2018. Next week will attend the Fitur fair to present "the first smart room", where the customer will have a voice assistant to satisfy any request, an interactive television connected to the Internet and an intelligent panel with all the hotel services.

Question. The tourism market slows down in Spain due to the awakening of cheaper competitors. How will the industry respond to these worst prospects?

Answer. More than worse prospects, I would say it is to return to a situation of stability. What we have lived in the last five years, from 60 to 82 million visitors, was not sustainable. And if it continues, it would have generated a bubble in the sector. In 2018 foreign tourists have increased by 0.9%, and the expense per visitor, 3%, which is what matters most. Are we heading in the right direction. We have been the most competitive country in the world for three years. And now we should aim for growth of very limited visitors, up to 1%, and bet on raising the expense.

"If the big growths of the last five years had continued, a bubble would have been generated"

P. But before an economy that gets worse it seems difficult to raise that 3%.

R. It will cost more to raise the expense because the deceleration will make the client more sensitive to the price. But it is the only way. The sector has made very large investments to improve the quality of the offer. I do not know if 3%, but that improvement gives us a competitive advantage.

P. How do you think the Brexit will affect the business considering that the British are the main customers?

R. I hope the scenario is not a hard Brexit. Of the 82 million tourists who visit us, 18 million are British. They are the number one customers for 60 years. It would be very difficult to supply them. We have a contingency plan with two scenarios, hard and soft.

P. And what would happen to the hard one?

R. If the entrance of British falls 20%, 3.6 million, the country could not face it. A possible devaluation of the pound would be catastrophic. But I'm optimistic and I do not think this situation will come. But we are looking at alternative markets such as Germany, France, Italy, Central Europe and Eastern Europe, Russia, Poland … And also the domestic market, which behaves well despite signs of slowdown.

P. How do you think 2019 will be, what forecasts do you have?

R. Our impressions are positive. There is greater optimism with the urban segment than in the holiday. Madrid is going to have a very good year in congresses and with the Champions League final. And in Catalonia we do not intend to reach the income per room (Revpar) of 2017 because it would be unreal. The Revpar has fallen 20% in 2018, it has been a tsunami for tourism. Now there is a certain political stability and the forecasts point to no further falls. But whoever ventures to give numerical estimates, knowing the political and economic uncertainty that there is, will probably not succeed. We expect a slight growth because the homework has been done and the tourist offer has been greatly improved since 2013.

P. Hurricanes, impact of the dollar, of Catalonia, Venezuela… Analysts say that the results of Meliá in 2018 are decaffeinated.

R. I do not know if decaffeinated, but we have had the perfect storm. In the first nine months of the year we go above 2017, but far from what we expected before those events. [En 2017 la empresa ganó 128,7 millones tras unos ingresos de 1.885 millones de euros].

P. And do you think that is only due to the great punishment that they are suffering in the stock market?

"When things come badly given, toto the world looks at the goose that lays the golden eggs to impose taxes"

R. This week I have seen 27 investors and the consensus is that the company is extremely penalized. Our fundamentals are very good and they do not understand what happened. Our weight of Americans in the free float was the highest in the Ibex, and the US investor, when he sees clouds, is the first to fold candles. It can be an explanation because Meliá is the value of the Ibex with more purchase recommendations.

P. The hotel sector does not stop concentrating. HNN, Accor, Hyatt, Minor, InterContinental … What will Meliá do?

R. Faced with a movement to consolidate the sector, which is positive, Spain should play a more active role. The sector represents more than 12% of GDP and only has two companies in the Stock Exchange. There must be more players to gain competitiveness and notoriety. Meliá will continue to specialize more in vacations and in urban hotels with a leisure component. We can not compete in business with Marriott, Hyatt or Accor. Our formula is to specialize. We add 27 or 28 hotels to the portfolio every year, which means opening a hotel every two weeks; We could not digest an increase in this rate. If there was any opportunity in the holiday segment, we would look at it.

P. How about your bet on Asia?

R. It is one of my obsessions. Where we can extrapolate the success of Meliá, which is due to the middle class that emerged in Europe in the sixties and then in the US. We can replicate the model in Asia, where each year there are more than 50 million incorporations to the middle class. And where we have gone from 5 to 56 establishments in six years. To be a leader in the holiday business you have to be in the Mediterranean, where we already are in many countries; in the Caribbean, where we are in the Spanish-speaking and Anglo-Saxon markets, and in Asia, where in three or four years we will be leaders. 92% of the world's population spends their vacations in these three areas.

P. And how do they face the growing turismophobia?

R. We are all guilty of it and the chaos that has occurred because of the lack of regulation of tourist rental. Between 2014 and 2017 the regulated offer has barely grown by 3% and the increase in tourists has been 25%; We have created more illegal accommodation than regulated. And this has to be limited and regulated. The Law of Urban Leases has been modified, but in the Balearic Islands 90% of the offer of many portals is illegal.

P. Is not it exaggerated to blame only tourist accommodation?

R. In 2014 there was no turism phobia and the only new phenomena in the sector are tourist accommodation and cruises, which have distorted it, we have not been able to control them on time and now we are paying for it. The Government should take measures.

P. Will it be one of the objectives in front of Exceltur?

R. I set myself six objectives: to improve the promotion, the reconversion of pioneer destinations, the digitization of the sector, labor improvements, also in public-private collaboration, and to minimize tax rates and pressure.

P. Bad moment when a tax increase is approaching.

R. Yes, because when things go wrong, everyone looks at the goose that lays the golden eggs and imposes taxes that make the sector less competitive.


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