City tourism: a successful product

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1 City tourism: a successful product Observation and analytical units. Tourist Destination Management (area 16) Inmaculada Gallego Galán and Ana Moniche Bermejo Department of Statistics and Market Research. Public company for the Management of Tourism and Sport in Andalusia. Department of Tourism, Commerce and Sport. Regional Government of Andalusia. C/Compañía Nº Málaga, Spain amoniche@andalucia.org; igallego@andalucia.org INTRODUCTION In recent years, against the backdrop of the challenging situation for the economy and tourism, city tourism has proved to be the most successful of all the tourist products. This article is based on the analysis contained in the report on the Assessment of Tourism in Andalusia for 2010, which identified the existence of four key areas: accessibility, specialisation, diversification and characterisation of demand, as the factors determining the success of an urban tourism destination. The second part of this article shows how the main Spanish cities are defined by these areas, and how far they affect their degree of tourism success. ANALYSIS OF THE SITUATION AND IDENTIFICATION OF DETERMINING VARIABLES City tourism is a product which has functioned well in the current climate of economic downturn. Its potential lies in the fact that these are trips involving very short stays, with destinations which in many cases can be reached by direct flights and at reasonable prices, due to the increasing importance of low cost carriers in airport traffic in large cities. These destinations therefore have the characteristic of being able to satisfy multiple tourist segments and to adapt to the growing trend for dividing the holidays, which encourages people to opt for short breaks over weekends and holiday periods. The main Spanish and Andalusian cities, which are characterised by developing this type of tourism, showed a more favourable evolution in 2009 and 2010 than the average for Spain and Andalusia respectively. Rates of variation of overnight hotel stays in the main Spanish cities and their comparison with the Spanish average Spain Barcelona Madrid Valencia Bilbao Andalusian Cities*

2 Source: EOH (INE) *Andalusian cities: Cordoba, Granada, Malaga and Seville. Rates of variation of overnight hotel stays in the main Andalusian cities and their comparison with the average for Andalusia Source: EOH (INE) In Spain as a whole, it is particularly worth noting the evolution of the city of Barcelona, which despite the climate of economic recession posted positive rates and even saw growth of +23% in In Andalusia, Malaga deserves a special mention as it recorded no negative rates in the period analysed and also reached its maximum value in 2010 with growth of +12.7% brought an upturn in the figures for the cities analysed, primarily influenced by growth in the foreign market, which showed a two digit increase in all the cities, with the exception of Granada, which had a figure of +9.4%. Rates of variation of overnight hotel stays in the main cities. Spanish nationals and foreigners Source: EOH (INE)

3 This excellent evolution of the foreign market has had a varying effect on the cities depending on the importance of this market to the destination. It is specifically worth mentioning the case of Barcelona, where 8 out of every 10 overnight hotel stays are by foreign tourists, whereas at the other extreme this proportion falls to 4 out of 10 in cities such as Bilbao and Cordoba. Market share by origin in the main Spanish cities for overnight hotel stays Source: EOH (INE) One characteristic of this type of tourism is that it involves short stays: in all cases the average stays were shorter than those recorded for total tourism. With the exception of Barcelona and Valencia, all the cities show average stays of less than two days, whereas for hotel movements as a whole in Spain and Andalusia the average number of days is almost three. Average stay in hotels in the main Spanish cities Source: EOH (INE) It should be mentioned that these cities are exceptional for having a wide range of tourist products, including not only cultural tourism but also links with the meetings and conference sector, language teaching, and also in the case of the coastal cities, cruise tourism.

4 Hotel establishments in Spanish urban destinations also recorded higher profits in Specifically this greater profitability can be seen in the RevPAR and Rate of Occupation variables which are above the average for the main Spanish and Andalusian cities. Average Daily Rate, Rate of Occupation and Revenue per Available Room in the main Spanish cities. Source: EOH (INE) It is worth noting that 2010 was also an exceptional year for the cruise tourism product, with Barcelona ranked in first place among the Mediterranean ports. A total of 850 cruise ships with 2.3 million passengers docked in 2010, representing a 33% share of the total cruise ship passengers in Spain. This growing segment represented an increase in Barcelona of +9%, whereas the ports of Malaga and Valencia had growth rates of over 35%, occupying the fourth and seventh position in the cruise tourism ranking in Spain according to number of passengers.

5 Ranking of cities according to cruise passengers No. of Position Port passengers Share % var. 10/09 1 Barcelona ,90% 9,00% 2 Balearic Islands ,60% 24,30% 3 S.C. Tenerife ,40% 27,30% 4 Malaga ,20% 35,10% 5 Las Palmas ,70% 1,20% 6 B. Cadiz ,70% 42,00% 7 Valencia ,60% 37,20% 8 Vigo ,30% 4,80% 9 Cartagena ,50% 53,60% 10 Alicante ,10% 21,40% Source: Puertos del Estado Source: Puertos del Estado With regard to cultural tourism it is worth noting that Andalusia has a particularly exceptional offer of monuments and museums, which places it at the head of the Spanish tourist regions. In this type of tourism it is once again worth noting the excellent year end result posted by the main monuments in the Andalusian cities analysed, with growth rates of over +4.5%. Visits to the main sightseeing points in Andalusian cities City Sightseeing point Visits 2010 % var. 10/09 Cordoba Mosque cathedral ,30% Granada The Alhambra and Generalife monumental site ,80% Malaga Roman theatre ,80% Malaga Picasso Museum ,40% Seville Cathedral ,60% Seville Real Alcázar palace ,90% Source: Tourist observatories of the cities of Cordoba, Malaga, Seville and the Department of Culture In relation to city tourism, it is worth studying the issue of language tourism in Spanish cities. The link between both of these segments can be seen in the table from the fact that seven Spanish cities contain practically 50% of the centres for teaching Spanish to foreigners, either accredited by the Cervantes Institute or not. According to this source, 180,000 students visit Spain every year in order to practice the language.

6 Ranking of cities according to the centres for teaching Spanish to foreigners. March 2011 Position Town/City Accredited centres Non accredited centres TOTAL Share (%) 1 Madrid ,70% 2 Barcelona ,40% 3 Salamanca ,30% 4 Valencia ,70% 5 Malaga ,50% 6 Seville ,30% 7 Granada ,30% Total for Spain % Source: Cervantes Institute (data collected in March 2011) City tourism requires the destination to be easily accessible, which is why the cities which benefit most from developing this kind of tourism product are large cities which have a wide range of means of access, primarily a port and a high speed train link. This feature is further accentuated by the fact that this type of tourism is characterised by short stay visits where minimum time wasted in transfers is a factor which is highly valued by the tourist. It can be seen that the cities analysed, with the exception of Cordoba and Granada, generate a higher volume of airport movements, and as a whole these cities represent 54.3% of the total passengers in Spanish airports in Moreover they all have growth rates of over +3.5% due to the passenger increase enjoyed by low cost carriers, which are gaining weight in the airports analysed, and particularly in the Andalusian cities of Malaga and Seville, which have the highest share. Airport movements in the main Spanish airports Airports Total Low cost Traditional No. of passengers % var. 0/09 Share % var. 0/09 Share % var. 0/09 Malaga ,1 0,74 6,9 0,26 3,2 Seville/San Pablo ,3 0,67 8,8 0,33 3,8 Valencia/ Manises ,9 0,54 18,2 0,46 8,9 Barcelona ,45 13,7 0,55 2,2 Madrid/ Barajas ,7 0,21 24,4 0,79 0,6 Bilbao/ Sondica ,6 0,33 22,1 0,67 0,4 Total for Spain ,1 0,47 8,5 0,53 1,2 Source: AENA The analysis carried out to date highlighted that the key to success for an urban destination is to have infrastructures for access and for tourism, and to manage them appropriately. It also identified relevant variables such as the fact that the destination must be accessible by various means of transport (international air connections, top quality rail links AVE lines etc.); that it should have enough tourist attractions to generate a very diverse demand (cultural, business and meetings, cruise ship, languages etc.); and finally that it must have an accommodations infrastructure mainly hotel based with sufficient capacity to meet demand. Once the structural aspects of the urban destinations have been determined, the next step is to verify how far the demand for this tourist product is characterised by variables. For this purpose a specific project

7 was conducted by the Survey for the Situation of Tourism in Andalusia by the Institute of Statistics and Cartography of Andalusia, which obtained the results for 2010 as shown below. The city tourist in Andalusia is characterised by: Greater use of trains and planes, with particular emphasis on the increase of the train option. High rate of accommodation in hotels

8 Greater independence in making travel arrangements Close links with cultural tourism Higher average daily expenditure at the destination

9 Low degree of loyalty to the destination, an inherent characteristic due to the link with cultural activities Greater use of the Internet for consulting, booking and purchasing Better valuation of the destination

10 Greater presence of tourists travelling alone Greater presence of youth tourism (under 30) The conclusions of this analysis of the demand show that this tourist can be characterised by the variables of lower seasonality, increased profitability, higher diversity of source markets and a good evolution of the tourism results. The following section identifies the variables to be analysed. MODEL OF COMPARATIVE RANKING FOR SPANISH URBAN DESTINATIONS After this analysis of the city tourism product, the proposed next step in the research is to synthesise the most appropriate variables for the configuration of the urban destinations. For this purpose the 13 cities with the highest number of hotel places were selected, identifying the characteristics which describe the overall situation of the city destination. The destinations chosen for the study are Madrid, Barcelona, Valencia, Seville, Granada, Zaragoza, Malaga, Alicante, Santiago de Compostela, Bilbao, Cordoba, Las Palmas and Salamanca. The objective of the methodology applied to these destinations is to present in a manner which is highly intuitive and easy to interpret a global image of the situation of the various tourist points selected. The methodology combines different variables presented in the form of a comparative ranking of the different concepts which define the urban destinations. The figure shows four areas and the variables studied in each one.

11 . Accessibility area: Determined by the variables: International air connectivity AVE high speed train connectivity Accessibility is key factor for the favourable development of any tourist destination, and it is even more important in the case of urban destinations, as they are associated with tourism for getaways or weekend breaks (short stays) where the tourist particularly values not having to waste time on arrival at the destination. The cities of Madrid, Barcelona, Malaga and Valencia are the most accessible as they have multiple international connections in addition to high speed train lines (AVE). Out of all the cities, Madrid, for reason of its unique situation, is in first place with regard to the access routes analysed.. Specialisation area: This identifies the destination's capacity to adequately meet tourist demand with regard to the following: Density of hotel places per inhabitant Number of employees per hotel place Barcelona is in first place because, in spite of being a large city, it has an excellent tourist specialisation, a high density of hotel places, and a very high proportion of employees for each hotel place. It is worth noting that after Barcelona is Santiago de Compostela, which is highly committed to tourist activity as seen by its number one ranking in density, although in the second indicator it is in an intermediate position. The cities of Seville and Granada in Andalusia share the same position with regard to specialisation, although Seville has a more balanced position in both variables whereas Granada has better density. The cities of Madrid, Salamanca and Bilbao are a little below, with Bilbao worth mentioning for its top score in ratio of employees/hotel places, despite having a low density. The rest of the cities analysed are rather more distant from this last group.. Diversification area: meaning the capacity of the territory studied to satisfy the multiple motivations presented by the city tourism demand. Cultural attractions Offer of language tourism Cruise tourism Meetings and conference tourism This area was compiled taking into account the existence of emblematic cultural elements either museums or monuments at the different points, also valuing cities with the World Heritage designation. Other variables included were the presence of schools for teaching Spanish to foreigners, attraction for cruise tourism, and the city's potential as a destination for meetings and conferences.

12 Diversification ranking of Spanish urban destinations 1 As can be seen in the graph, the city of Barcelona scored highest due to its characteristics as a large city offering a range of tourist attractions, and also ahead of the rest due to its cruise activity, which distances it from the following city, Madrid. Valencia and Malaga present a good combination of the variables analysed. Malaga is in first place for cruises and conferences, whereas Valencia has a greater volume of visits generated by its main cultural attraction: the City of Arts and Sciences.. Area of characterisation of demand: The strength of the demand for an urban destination has been characterised by these four variables: Dynamism Diversification of markets Seasonality Profitability 1 The deeper the colour, the nearer the optimum situation, defined as coming top in all the established rankings (vertex of the graph).

13 Ranking of characterisation of demand for Spanish urban destinations In this area the cities of Barcelona and Madrid are in the top positions in all the variables, except for seasonality in the case of Barcelona and dynamism in the case of Madrid. The second group consists of Malaga, Seville and Valencia, which also share an aggregate score in the four variables, although with different characteristics. Malaga scores high in dynamism and diversification of markets, average in profitability, and has the lowest score in seasonality of demand. Seville is in the first five places in diversification of markets, seasonality and profitability, although it is among the lowest scores for dynamism. Valencia is in fifth place for dynamism, diversification and profitability, with lower scores for seasonality. Bilbao and Granada are in a third group; Bilbao scores highly in profitability and dynamism, whereas Granada's high scores are thanks to its lower seasonality. The rest of the cities analysed are rather more distant from this last group. Aggregate analysis of the four areas. Aggregating the scores obtained in the different areas makes it possible to compare the different destinations and to highlight their weaknesses and strengths.

14 Aggregate ranking of Spanish urban destinations In this aggregate score the cities of Madrid and Barcelona are at the top of the first group. Barcelona scores very highly in the four areas analysed and presents no weakness compared to the rest of the destinations. In general terms Madrid scores highly, although it has less diversification. A second group comprises Seville, Valencia and Malaga, all with similar scores in all areas except in specialisation, where Seville is ahead of the others. They are followed by Bilbao whose fundamental strength is its degree of specialisation, although it has greater weaknesses in the area of accessibility due to its lack of a high speed railway link. The next group includes the cities of Granada, Cordoba and Santiago de Compostela and has lower scores mainly due to lack of accessibility, and in the case of Cordoba also due to its low specialisation. The cities of Las Palmas de Gran Canaria and Alicante have low scores in all areas, and the characteristics of the demand in Alicante are also negatively affected by its lack of dynamism and high seasonality. Finally the lowest score corresponds to the cities of Salamanca and Zaragoza both of which appear in last place in the area of demand, as they have a high dependence on the Spanish market and lower profitability, whereas in the rest of the areas analysed, Salamanca scores lowest in accessibility, while Zaragoza does so in specialisation. The model of analysis developed must be considered as a preliminary approach based on prior conclusions, and always assuming the availability of homogeneous statistical information which allows the results to be compared. Independently of this, the study has highlighted the importance for any tourist destination of having urban centres which are accessible, diversified in order to satisfy a wide range of tourist motivations, and which are able to serve visitors with an adequate infrastructure of

15 accommodations and tourist offer. The demand for this tourist product is defined by various characteristics which help the destinations to achieve strategic objectives such as lower seasonality, tourists with a greater average daily expenditure, as well as the possibility of complementing and diversifying their tourism products. These characteristics are therefore instrumental in ensuring that in unfavourable times for the economy and for tourism, this type of tourism shows better results than other destinations which do not offer this tourist product.

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