Sun, sea but no visitors: Spain's hot spots lose their appeal for Britons

Spanish tourism industry fears for its future as strikes, street crime and taxes drive away holidaymakers from Britain and Germany

Fancy a cheap getaway to the Costas? There may never be a better moment to escape rainy Britain and head for sunny Spanish beaches.

Spain is confronting the frightening reality that Germans and Britons – who between them make up almost two thirds of its overseas visitors – are staying away in droves, causing the mighty tourist industry, the roaring powerhouse of the Spanish economy, to flag seriously for first time since the 1960s.

Alarmed by a drop in visitor numbers of up to 20 per cent, Spain has launched a frenzy of last-minute discounts – some prices slashed by 50 per cent – to tempt once-loyal visitors back to the delights of sun, sand and sangria. But a host of unrelated factors, some mere passing blips, others deep-seated and long term, have come together to make northern Europeans think twice about returning to their Spanish haunts, and to seek their holidays elsewhere.

Of the nearly 50 million holidaymakers visiting Spain every year, Britons make up 34.5 per cent and Germans 28 per cent. In some areas such as the Canaries and the Balearics the dependence is far greater. No wonder British breakfasts and German bratwursts abound.

In the first five months of this year, the number of German and British visitors to the Balearic islands dropped by 15 per cent, and elsewhere by 20 per cent. Tenerife in the Canary Islands reported 15 per cent fewer visitors. Hotel reservations for July and August are down 12.7 per cent. Figures such as these at peak season in an industry on the scale of Spanish tourism reveal a black hole that is causing alarm throughout the sector.

One tour operator in the Canary Islands says: "The majority of those who have come have been attracted by special cut-price offers with very narrow profit margins. And I don't think this is just a momentary problem. I think next year we should start to drop our prices in January when the brochures first come out, so our prices are closer to those of our competitors."

Others prefer to compete on quality rather than price, convinced that further cost-cutting will simply produce losses. "It's obvious that we must offer something more than sun and sand," says Alvaro Pacheco, spokesman for the Spanish travel giant Barcelo. "Those days are over."

Spanish experts do not yet know whether the slump, perceptible even before 11 September, is just a passing phase or a reflection of a fundamental change in holiday habits. They cite a number of causes for the downturn, including the growing strength of the euro, the fear of street crime, the slackening German economy, competition from cheaper and more exotic resorts in Turkey, Tunisia, Morocco, Bulgaria and Croatia, a saturation of Spain's cheap package market and even fallout from the World Cup.

Operators first spotted declining interest at British trade fairs early this year, and predicted that the number of Britons visiting the country would fall by 16 per cent throughout Spain and 20 per cent in the Balearics.

The so-called "ecotax" imposed by the socialist regional government of the Balearics to clean up damage caused by decades of wildcat development on the islands has gone down badly with Germans, according to Ramon Estalella, head of the Hotel Group of Spanish Tourist Zones. The reason is not so much the average extra euro a day that guests must pay, but the image that the tax conveys, he says. "The ecotax suggests that we need the money because this is a filthy, concrete jungle ... That's not going to encourage anyone to come."

German newspapers have campaigned furiously against the tax, which Germans nickname limonadensteuer, or lemonade tax, in reference to the soft-drinks vouchers handed out in exchange by hotels. Spanish tourist officials in Germany now call it the kurtax – meaning something like "care" or "cure" tax, redolent of health spas and ecological awareness. They insist that visitors are in favour of the tax if its revenues really improve the islands' environment.

Even resorts offering more than sun and sand, such as Salou, near Barcelona, boosted by the successful Port Aventura theme park, feel the pressure. "It's not a catastrophic year, because the park is very popular among Spaniards," says Benet Presas, the Catalan regional tourism minister, "but we have noticed a drop in visiting Germans and Britons."

The problem is that the supply of tourist beds continues to increase unchecked, while demand is falling, Mr Presas says. Britons are put off by the weakening pound against the euro, Germans by the uncertainty of job prospects in their flagging economy.

And both nations are dismayed at the prospect of Spanish bus strikes that threaten to strand them far from their airport. Balearics bus operators meet drivers today to resolve a dispute that threatens strike action on 26 and 27 July and on 5, 6, 7, 16, 17 and 18 August.

Petty street crime is also a turn-off. Losing your passport to beachside bag-snatchers can ruin a holiday, as Costa consulates recount ad nauseam.

Spain's police are vigilant but less ubiquitous than police in Tunisia or Morocco, though the most popular resorts are renowned for their safety.

Basque terrorism on the Costas is another fear, though a series of bomb attacks does not seem to have frightened tourists away so far.

Operators eagerly awaited the end of the World Cup, believing that customers were delaying their holidays to watch their national teams at home on television. But the defeats of both Germany and England seem to have dampened both spirits and wanderlust.

At root, however, is the truth acknowledged by all in the industry, that the classic cheap and cheerful beach package formula pioneered by Spain is saturated to the point of exhaustion.

All resorts that have built their fortunes on low-cost tourism are now striving to move upmarket. Benidorm, for example, is trying to court a more prosperous family tourism with the nearby Terra Mitica theme park, and to develop the business and conference trade, with its gigantic Bali hotel – the tallest in Europe.

Benidorm's tourism chief says: "Germans and Britons have been visiting us faithfully since the 1970s. The strong point of our tourism has not only been the volume of visitors, but the extent to which the same people come back year after year. But just now many of our regulars have stopped coming. We have to rediscover them, make the effort to woo them back."

Spain may have to concentrate on those areas where it has come to exert a new cultural and economic force in Europe. That force may be summed up as the "Guggenheim effect", but rests on classical attractions such as Velazquez, Goya, Picasso, Gaudi, olive oil, rioja wine and Europe's finest seafood.

But this will be of little comfort to the thousands of hoteliers on the Costas with tens of thousands rooms to fill.

Spain by numbers

* More than 11 million Britons travelled to Spain last year, joining more than 9 million Germans.

* Of the 11 million Britons, 4.5 million of those were on package holidays, which is the highest figure for any tourist destination.

* German, British and Spanish holidaymakers account for eight in 10 of nearly 20 million people who fly to Majorca's Palma airport every year.

* During an average summer, five Britons arrive every five minutes in Majorca, the largest of the islands.

* The number of British visitors to Majorca fell last year for the first time in 20 years.

* The average tourist spends £34 a day while on holiday in Spain and a total of £4bn was spent there by Britons last year.

* The average length of stay is 11 nights.

* The top three resorts are all in the Balearic islands. Majorca is the leader followed by Ibiza, then Minorca. Costa Blanca, on the Spanish mainland, and Tenerife make up the top five.

* Malaga airport handles more than 10 million passengers a year ­ 1.3 million of them British. At the busiest times 32 flights can arrive from Britain within 90 minutes.

* The Foreign Office travel advice suggests that "visitors should be alert to continuing terrorist activity". It says the chances of being caught in an attack remain "extremely low".