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Do countries that promote tourism fare better than those that do not ?

German PORRAS - General Director of Turespana, Madrid, Spain

 

 

I - INTRODUCTION

When confronted with the subject of this presentation, there were two ways to face it: to compare the performance of several destinations, or just to explain the Spanish case and let the audience to draw the conclusions. I thought this one would be more useful.

Spain has always had a tourism policy. Not always the same, but from the beginning of tourism activity has been some degree of intervention of the Public Administration. I will try to explain this policy, specially the one implemented the last decades, its guidelines and its results.

Spanish Tourist Policy : Traits

1	This policy covers supply (the product) as well as demand (promotion in the markets).
2	This policy comes under the framework of a market economy, and therefore, it is characterised by three fundamental features: The leading agents in tourist activity are private companies. The majority of policy measures are voluntary. However there are some of a compulsory nature based on the grounds of consumer protection (Official Hotel Grading System, Directive on packages, Regional by-laws about hotel modernisation) Co-ordinated. Spain is a decentralised country with 19 Regional Governments and responsibilities in tourism transferred to them. So co-ordination is instrumental to devise and implement a tourist policy.
3	Spanish tourism policy has gone through different phases : Planning 1963 - 1973 Decentralisation 1974 -1982 Neoliberal 1982 - 1992 Indicative 1992 - 2000
4	I will only refer to the latter stage where tourism policy is based in two principles : It's indicative Co-ordination between the different Public Administrations

II - INDICATIVE TOURISM POLICY 1992-2000

1	The starting point is the deep crisis that hit Spanish tourism at the end of the 80s and early 90s.

2	The diagnosis at this moment of Spanish tourism was pessimistic :  The tourist product was obsolete. Imbalance between public infrastructure and the volume of tourist offer: supply and treatment of water, inadequacy of airports and roads, etc. The image of Spanish destinations was negative.
3	As a result, the common opinion in the trade was that Spain couldn't compete with the new tourist destinations that had a more modern offer and products more suitable for the new tendencies of demand.

4	In conclusion the Spanish tourism model based on the Sand & Sea product and in quantitative growth, was out of date, obsolete.

5	The Spanish Tourist Industry faced up to this crisis, not the first, although the deepest.

Both, the private sector and the Public Administrations realised that the tourist industry had something to do if we wanted Spain to remain as a leading tourist destination.

 

III - STAGES OF THE NEW TOURISM POLICY  

1	The first stage was of diagnosis and analysis of the situation. "The Spanish Tourism's White Paper" was produced in 1990.

2	In 1992 the Competition Framework Plan (PLAN FUTURES), was launched. It included 8 areas of action : co-ordination, quality, technical development, destinations, and international co-operation, training, new products and statistical and economical analysis of tourism.

3	Restrictions on urban and tourist development adopted by Regional Governments (Balearics and subsequently by the Canary Islands) and compulsory hotel modernisation plans (Balearics).

4

Investment effort in public infrastructure: airports, roads, high-speed trains, supply and treatment of water, recovery of the coastline. Environment investment for 1999 has been of the figure of 28 billions Euro and for the year 2000 an estimated 36 billions. Near 19 billions Euro on airports. 379 billions Euro on roads. 237 billions Euro on high-speed trains.

5

Co-ordination among the Public Administrations the following co-ordination bodies were created : The Inter-ministerial Commission for Tourism (14-1-1994) that integrates the Departments with responsibilities or investments affecting tourism. Amongst the proposed measures by the Commission the following could be mentioned : a reduced application of VAT to the tourist industry, the inclusion of tourism studies at the University, the priority for investments in infrastructures directly related with tourism. The Council for Tourism Promotion (1995), which integrates members of the Public Administrations (National, Regional and the Municipalities) and the private sector to produce and carry out promotion plans for tourist products and marketing. The Tourist Sector Conference, which is integrated by Ministers of the Regional Governments and is presided by the Minister responsible for Tourism for the National Government. As the majority of responsibilities are transferred to the Regional Governments, the Tourist Sector Conference is the basic form to define strategies in tourist policy. On the 5th of October 1999 the Tourist Sector Conference agreed by unanimity the Integral Quality Plan for Spanish Tourism 2000 - 2006 that was approved by the Spanish Government on the 3rd of December.

IV - INTEGRAL QUALITY PLAN FOR SPANISH TOURISM (2000 - 2006) - PICTE 2000

1	Characteristics :  It is a medium term Plan It is an integral Plan that covers destinations, products, training, innovation & research, marketing, statistics and economic analysis. Guideline - quality is the motivation for the ten programs of the plan
2	Objectives : Sustainability To even-out seasonality Products and markets diversification Profitability
3	Programs :  Quality of Tourist Destinations Quality in Tourist Products Quality in Tourist Services Training in Quality Technological Innovation and Development Globalisation of the Spanish Tourist Industry International Co-operation Statistical Information and Economic Analysis Promotion Support for Marketing

I will only refer to three of these programs :

1

Program Nº1 Quality of Tourist Destinations. Tourist Excellence Plans: directed towards the recovery and regeneration of mature destinations. Tourist Development Plans: orientated towards the economic activation of emerging destinations. With financing by the three Administrations (Local, Regional and Central) and also involving the business associations on the destinations. Between 1996 and 1999, 40 Tourist Excellence and Development Plans have been set up and running (with an investment of 6,3 billion Euro) and in the next four years a further 60 Plans will be set up with public funding of 18 billion Euro.

2

Program Nº2. Quality of Tourist Products.  Stressing the importance of the tourist products that contribute to the diversification and to even-out seasonality of Spanish tourism and that responds to the variations incurred by the demand (multiples holidays a year and with different motives) : Cultural Tourism, Golf, Nautical Sports, Adventure, Rural Tourism, etc. Regional incentives "Regional incentives" is one of the main tools of the Tourist Policy's to incentive new products using EU funding: in Spain the tourist sector represents 17% of approved projects and received 36% of the allocated funds. Over the last four years the Spanish tourist sector has received grants for the value of 330 million Euro and has induced an investment of over 3.041 million Euro. The criteria for granting these said aids are rigorous and only support high quality products with significant added value: 4/5 star hotels, spas, golf courses, congress and incentives facilities, etc

3

Program Nº3. Quality in Tourist Services The Central Tourist Administration has designed and implemented a quality system (the "Q" scheme) with specific standards for the different tourist services. It is a pioneering project in the world. The system is voluntary. The Institute of Quality of Spanish Tourism (ICTE), a private institution, is the governing body of the "Q" scheme. It grants the "Q" certifications trough a rigorous process. 2.700 companies from different sub-sectors (hotels, apartments, camping, ski resorts, travel agents, restaurants, rural houses and time-share establishments) are involved in the scheme. The State Secretariat for Tourism provides technical support to the ICTE and runs the promotion and advertising campaign to introduce the system and the quality label.

Investment to Fund The PICTE 2000
PICTE 2000 TOTAL BUDGET (in thousand of euro)

	2000	2001	2002	2003	2004	2005	2006	TOTAL
State secretarial of tourisme	85.039	89.519	92.198	95.005	98.279	101.128	102.664	663.832
Gouvernemental commission	4.933.876	6.108.214	6.243.795	6.233.495	6.420.031	6.612.484	6.810.095	43.361.980
Induces investments	60.875	66.153	73.115	80.265	87.245	96.121	105.424	569.198
	5.079.790	6.263.886	6.409.108	6.408.765	6.605.555	6.809.733	7.018.173	45.595.010

TOTAL BUDGET : 44.595.010 EURO

 

The budget to finance the PICTE 2000 - 2006 includes three lines :

• State Secretariat for Tourism budget
• Central Government Commission: Includes the budgets of Ministries directly related with tourism : airports, roads, railways, ports, environment,…
• Induced additional investments from Regional Governments and the industry.

  

V - TOURIST POLICY RESULTS

Arrivals & Receipts

•  Spain’s ranking in 1999: 2^nd in number of tourists and receipts

	1990	1995	1999
Number of Tourists	N/A	35 million	47 million
Receipts in currency	1.1 billion Euro	1.9 billion Euro	3 billion Euro

• To even out seasonality: The campaigns to fight against seasonality have got significant results lengthening of the tourist season and the reduction from 40 % to 38 % the concentration of tourist activity in the summer months. This year 2000 we have witnessed in the month of September an increase of 10.5 % in the number of tourists in comparison to the previous year, and of 3,5 % in October, while July and August have moderated their growth figures.
    
• Regional incentives : During the last four years, 450 projects have been funded. Almost 50 % of them correspond to 5 and 4 stars hotels in resorts, 24,7 % to cities' 5 and 4 hotels with convention facilities, 17,7 % to rural accommodation and the rest to incentive high quality new products, such as golf courses, spas, theme parks, etc.
    
• Diversification of products : In recent years the Tourist Administration have orientated its marketing activities in promoting alternative products to "Sun & Sea" that attracts 75 % of our tourists. Important inroads have been achieved, for example the increase in the number of tourists to the so called "Green Spain" by 30 % in 1998 and by 22.4 % in 1999. Regarding the motivation of the trip, there is a greater recognition of our historical artistic heritage. Spain is the preferred country for Europeans for the practice of Golf and the number of tourist players has gone up by 50 % over the last 15 years. In regards to Business Tourism, in 1999, 51.48 % more meetings were held than in the previous year, placing Spain as the third country in world in number of meetings held.
    
• Globalisation: The Spanish hotel companies have 473 establishments outside of Spain, of which 309 were opened over the last 5 years. Thus 32% of the hotel capacity of the Spanish hotel chains is situated abroad.  

Promotion & Marketing

To conclude, some examples of direct cost-effectiveness of public investment in Tourist Policy in the area of promotion : 

• Advertising campaign: Tourist promotion as an instrument for creating a country's image and as a basic component of a Marketing Plan. A budget of 155 million Euro has been allocated. This budget is increase with funds of Regional Governments, Institutions and private companies, on a voluntary basis. Co-funding in the current year is of 25 % and in four years will rise to 33 %.
  To measure the degree of penetration by the campaign a research through quantitative and qualitative analysis has been commissioned in France, Germany and the United Kingdom. With this study it has come to light that one of the principal assets that Spain has as it's trademark in the tourist market is the Miró logo. This is recognised and identified by 75% of Europeans. To create image of the country is a reason for spending public funds in tourism.
    
• Study of profitability of the information to the public carried out by the Spanish Tourist Offices. The increase in tourist spending has been studied, generated by the Office's information services. The survey applied to 10 of our Offices has shown that the induced expenditure generated by the information service is situated within a profit margin which varies between 74.2 % and 76.1 % of the budget dedicated to promotion and distribution.
    
• Publicity. The Tourist Administration carries out a function of liasing with the media with the goal of promoting an image of quality of Spain. Press Familiarisation Trips: annually 1.300 journalists are invited to visit Spain, organising the trips with the co-operation of the Regional Governments as well as with the private sector. Around 1000 articles and features published annually as a direct consequence of these familiarisation trips. The publicity value of these articles amounts to around 35 million Euro. The communicational value of these articles is thought to be five times greater than the power of influence of an advertisement.

 

CONCLUSION

Even though it is obvious that the leading role in tourist activity belongs to the private sector, the public sector has an important role to play in the development of the tourist sector: 

• The investments in public infrastructures support the quality of the offer
• The definition of objectives, such as the quality of tourism, to even-out seasonality, diversification, sustainability, and the creation of instruments and the assignment of resources, serve as a guide and facilitate the actions of the private sector
  • Tourist promotion as instrumental in creating and consolidating the image of the country