Tourism - Poland

Another planeload of Polish holidaymakers is back from Spain’s Costa Del Sol, one of the popular destination among the country’s growing middle class. Warsaw airport and Poland’s eight other international airports, are just as busy handling charter flights to Spain, Crete, Morocco and Thailand as they were before the financial tremors hit Europe. In fact, the Polish middle class keeps spending like nobody’s business, and foreign travel is high on its list. Before 1989 there was no way that Poles could afford to visit a place like Egypt. Now it probably costs not more than a summer holiday at the Polish seaside, where the weather is quite unpredictable.

A TV commercial for one of the tour operators shows a Tunisian market seller singing a popular Polish tune in Polish. Two million travellers out of Poland’s population of thirty eight million regularly spend their holidays abroad, so it probably makes sense to learn the language to handle the trade. Until 2008 the Polish outbound tourist market grew by forty per cent each year, and this year’s results promise to be better than the European average. According to statistics from Eurostat, the number of customers choosing foreign holidays is growing. Organised outgoing travel in Poland has great potential for growth. The reason is the growing purchasing power of Poles since EU accession, Poles choosing better hotels, more expensive destinations and spending more money abroad.

But how do Polish operators manage to keep their heads above water with competing large German travel companies treating Poland as a lucrative market? Having to build up businesses from scratch and steer them through tough market transformations, Polish entrepreneurs have learnt to take risks and to adapt quickly. In the times of crisis, two segments least affected are the luxurious and the least expensive one. The segments which we have been targeted in Poland are the ones that should be least hit.

Tourism Spain

The tourism sector accounts for about 11 percent of Spain's GDP. However the number of tourists visiting Spain in the first-half of 2009 fell 11.4 percent to 23.6 million from a year ago, according to data released by the government. Britain's economic difficulties and the depreciation of the pound are the main reason behind the slump in tourist arrivals to Spain. The drop in tourist arrivals in 2009 should not exceed 10% as the government approved a new stimulus package for the tourism sector worth 1 billion euros ($1.42 billion). The drop in foreign tourists will be partly offset however by a rise in domestic tourism, which the government is forecasting at 4 percent in 2009.

The Spanish high-speed rail network AVE, has changed the tourist market share and caused profound changes in the way Spaniards travel throughout the country. The changes are certain to remain in place as the rail network will continue expanding to reach Valencia, Galicia and the Basque Country in the coming years, and will soon link Spain with Lisbon as well as the French high-speed rail network. It is expected that by 2020 high-speed trains will reach every one of the 49 region capitals, with a 10,000km high-speed network and 90% of the Spanish population living within 50km of a high-speed train station.

Air travel has been the most affected as the hike in jet fuel prices and the decline in tourist trips put companies under pressure. IBERIA and British Airways started negotiations to create what will become the third leading European carrier. Vueling and Clickair, the two Spanish low-cost carriers, also decided to merge into one single company. The SAS Group also started negotiations to sell its stake in Spanair, the third leading Spanish carrier. In other sectors, such as travel retail, companies also looked into possibilities to merge or acquire competitor’s divisions. However, these operations were hindered by the credit crunch. Access to funds closed or dried up amid the global financial turmoil, while the private equity sector, which had financed many of these operations in the past, began divesting from the Spanish tourism market.

The penetration of the internet in the Spanish travel industry has been historically lower than in other European countries. However, it is increasingly gaining ground to the detriment of traditional travel agents. The boom of low-cost carriers has helped to develop the usage of the internet among Spaniards. The expansion of the new high-speed rail network also contributed, as online fares can be 60% cheaper than regular fares. As Spanish tourists become more used to internet transactions, internet penetration is set to increase as tourists surf for the cheapest available holiday breaks. The development of mobile internet technologies is also expected to boost the usage of the net in the travel industry.

The Spanish tourism industry is expected to diminish further in 2010, with only sluggish recovery thereafter over the forecast period. Many sectors will actually stagnate over the forecast period, while others will only resume positive growth rates from 2011. Price competition is expected to be the key driver of value sales. The economic downturn will boost the number of last minute bookings, shorter stays and falling travel expenditure; but will also bring further market consolidation. Some of the changes boosted by the current economic recession will have a longstanding impact on the Spanish travel industry.