SPAIN. Authorities fear the Madrid bomb attacks of last Thursday that have killed over 200 people will hurt Spanish tourism.
Tourism sources say they expect the biggest economic impact to come from non-Spaniards postponing travel or tourism in Spain, as well as from foreign investors generally. Tourism is one of Spain’s key industries. About 12 million Britons, for example, spend £3 billion (€4.42 billion) on holidays in Spain each year. The country is also one of the favoured destinations of German tourists. But initial reports suggested airlines, tourism agencies and hotels have not yet experienced increased cancellations in the wake of the bomb attacks.
The subsequent change in government following the national elections may also help restore traveller confidence quickly. The new regime’s anti-war stance, reflected in its criticism of the US-led invasion and the decision to withdraw Spanish troops from Iraq, has made the country a far less likely target for future attacks.
Spain’s stock market has fallen more than -4% as investors, reeling from the terror attacks, digest the recent election result. The Ibex-35 index of most traded stocks dropped as low as 7,681 points, from 8,032 on Friday. Leading travel retailer Aldeasa’s stock price has fallen by more than -7% at the latest count.
Globally the shock was also felt in the luxury goods sector. Richemont , the world’s second biggest luxury goods group, fell -2.5% on the stock markets, while the Swatch Group fell -3.0% and LVMH fell -2.0%. Gucci avoided the worst of the impact with its shares down -0.7% initially. Within the Euro-zone, travel businesses were already seeing recovery held back by a strong currency.
“[Luxury goods] is the sector expected to suffer from the attack in Madrid,” Bank Leu analyst Ronald Wildmann said in a Reuters interview. “The feel good factor is hurt. Tourism is very important for the sector.”
Meanwhile, reports from Spanish business website Invertia quoted one analyst from a Spanish bank as predicting bigger changes at Aldeasa, where the arrival of the Spanish Socialist Party in government – led by Prime Minister Jose Luis Rodriguez Zapatero – might precipitate the changeover of Aldeasa’s present president, José Fernández Olano. No reasons were given other than that Olano is close to the outgoing Minister of Economy, Rodrigo Rato. The analyst claimed that some concessions in Spanish airports may have to be renegotiated with the new executive.
