By many measures, 2009 was the worst performing year on record for the Spanish travel and tourism industry. The number of incoming tourists plummeted, driven by the sharp deterioration of the European economy. With unemployment hitting 19% of the Spanish working population, nearly 40% of Spaniards did not enjoy a holiday. Those who did travel stayed for fewer days on average, and often avoided staying in hotels. Companies also reduced their travel budgets. Nonetheless, Spaniards continued to travel abroad in increasing numbers.

 

The ongoing crisis proved the need for the Spanish travel and tourism industry to diversify its source markets if it expects to weather future crises in better shape than it did the current recession. The top three European core markets alone accounted for nearly six out of every 10 visitors Spain received in 2009, which makes the Spanish tourism industry over-reliant on just three source markets. The UK alone accounted for more than a quarter of all incoming visitors, making the Spanish tourism industry captive not only to the state of the British economy, but also to sudden fluctuations in the currency exchange rate of the Euro.

 

Spain is suffering one of its deepest recessions in history, but this did not deter an increasing number of Spaniards from travelling abroad in 2009. Escaping from the gloom at home, many young Spaniards packed their bags and fled abroad. The slump in arrivals increased the availability of cheap seats on aeroplanes. No-frills carriers expanded their presence even further in Spain, allowing many young Spaniards to jump on board planes at very cheap prices. High unemployment amongst youngsters also pushed many to travel overseas and look for job opportunities abroad, or simply to take a break and enjoy their unemployment.

 

The recent expansion of the Spanish high-speed network, called AVE, is radically changing the way in which Spaniards travel throughout the country. In just one year, the AVE train overtook air carriers flying the Madrid-Barcelona corridor. The route was one of the busiest air corridors in Europe. However, less than 10 months was enough to wipe out one of the most profitable flights for air carriers. The AVE train is changing travel patterns, allowing business travellers to travel within a day and boosting the number of city breaks at weekends. The network will soon reach the Basque Country, Galicia and Valencia. By 2020 high-speed trains will reach every one of the 49 regional capitals, with a 10,000km high-speed network and 90% of the Spanish population living within 50km of a high-speed train station. Lisbon and Paris will also both be connected to Spain by high-speed trains by that time.

 

The travel and tourism industry in Spain is only expected to recover some dynamism by 2012, but the situation will be very fragile. In the meantime, the industry will need to streamline and revamp its travel accommodation supply to adjust to the current scenario, as some of the recent changes in tourism patterns are here to stay. Room capacity needs to be reduced in tourist areas, as fewer tourists are expected in the peak season. Meanwhile, the supply of travel accommodation in urban areas will have to increase to allow Spanish cities to become more competitive compared with other European city destinations.