The war will barely impact travel but it will impact the profitability of tourism
The president of the Spanish Confederation of Hotels and Tourist Accommodation (Cehat), Jorge Marichal, has agreed that the war has slowed down reservations
Russia's invasion of Ukraine
penalties will have an impact of 7% on tourist reservations for Easter, which could be lower due to last-minute purchases, but it will affect the profitability of the sector due to the rise in costs, which can only be
impact customers by 24%.
It is the perception of the Exceltur tourism alliance, which warns that, after two years of the pandemic in which the income of the sector has fallen by an average of 54%, absorbing a
76% of the increase in the cost of energy and other products as a result of the war it can jeopardize new investment and job creation.
For his part, the president of the Spanish Confederation of Hotels and Tourist Accommodation (Cehat), Jorge Marichal, has agreed that the war has slowed down reservations although the intention to travel to Spain has not decreased, which in most issuing markets is exceeding the figures for 2019.
From demand crisis to profitability crisis
The executive vice president of Exceltur, José Luis Zoreda, explained this Thursday that the crisis in demand that the sector suffered during the pandemic has now been transformed, with the war, into a crisis of profitability in a sector already badly hit by the crisis.
The "momentum" of demand and the desire to travel is compensating and surpassing the withdrawal of sales due to the war, which has accelerated the "last minute" effect on reservations detected already during the pandemic.
The invasion has made the prices of energy and other products even more expensive, but businessmen, consulted by Exceltur in its quarterly survey, point out that only
will be able to pass on an average of 26% of the cost increases.
Zoreda has warned about the rise in salary costs in a
7.8% as an effect of second-round inflation, for which reason it has appealed for collective bargaining agreements that limit salary growth.
The effects of the war could mean that Spain as a tourist destination benefits from the relative remoteness of the conflict, although doubts abound in the sector about how Turkey will act, a strong competitor of Spain in international markets, which could
"pull" prices to try to sustain demand.
The war itself may have a greater impact on German tourism arrivals in Spain, due to geographical proximity, and on travelers from the United States, who consider Europe a "pack", according to the alliance.
Exceltur has improved its forecasts for the whole of 2022, when it calculates that the tourism gross domestic product (GDP) will reach 141,681 million euros91.6% of pre-pandemic levels, but conditional on it not intensifying, not spreading geographically and not prolonging the war crisis, in addition to continuing to control the pandemic.
More cancellations than in 2019
Concern about the situation in Ukraine and a possible new wave of covid "maintains some instability in the sector, with a percentage of cancellations higher than 2019, although well below last year's values," explained Marichal, for whom the spring prospects are 'hopeful'.
The intention to travel to Spain exceeds the levels of 2019, especially in the Nordic countries and the Netherlands, and the British market is also recovering, with reserves above those of 2019.
The improvement is generalized in all the autonomous communities, except in Catalonia, where the recovery of the 2019 levels is being more moderate, according to Cehat. At this point, Exceltur considers that Barcelona, in particular, is greatly affected by the drop in congress tourism.
Purchasing power falls
The partner responsible for tourism at PwC, Cayetano Soler, has warned that the war has aggravated the loss of purchasing power of tourists, has moderated the growth of European countries and has worsened unemployment forecasts,
that could exceed 2021 levels.
Luis Buzzi, partner responsible for Tourism and Leisure at KPMG in Spain, told Efe that the war will affect some issuing countries, especially
Germany, where, given their proximity to the conflict zone, they live in greater uncertainty when moving and traveling.
This is not the case with the United Kingdom, the traditional first issuing market for Spain (18 million tourists in 2019), so the war will not have as much impact in Spain, he explains.
