World Review of Entrepreneurship, Management and Sust. Development, Vol. 1, No. 1, 2005 45 Rural tourism in Spain: natural resources as sources of competitive advantage Patricia Ordoñez Faculty of Economics, Department of Business Administration and Accountability, University of Oviedo, Avd. del Cristo, s/n, 33 071 Oviedo Asturias, Spain Fax: 34 985 10 37 08 E-mail: patriop@uniovi.es *Corresponding author Jose Parreño and Raul Pino Faculty of Engineering, Department of Business Administration and Accountability, University of Oviedo, Campus de Viesques, edificio energia 33204 Gijon Asturias, Spain Fax: +34 985 18 20 10 E-mail: parreno@epsig.uniovi.es E-mail: pino@epsig.uniovi.es Abstract: The aim of this paper is to analyse the state of the art of the Spanish rural tourism sector, as well as performing forecasts for this strategically important sector of Spanish economy. Section 1 of the paper describes rural tourism in Spain, while in Section 2 three time series belonging to this sector are analysed, and then forecasts are calculated by applying Box-Jenkins and Artificial Neural Nets methodologies. Finally, the paper summarises major conclusions and implications for policy makers and managers involved in rural tourism in Spain. Keywords: competitive advantage; rural tourism; Spain. Reference to this paper should be made as follows: Ordoñez, P., Parreño, J. and Pino, R. (2005) Rural tourism in Spain: natural resources as sources of competitive advantage, World Review of Entrepreneurship, Management and Sust. Development, Vol. 1, No. 1, pp.45 56. Biographical notes: Dr. Patricia Ordoñez works for the Department of Business Administration and Accountability, at the Faculty of Economics of the University of Oviedo, Spain. Her doctoral thesis was entitled Intellectual Capital, Knowledge Management and Human Resource Management: Influence on Organisational Performance. Her teaching and research initiatives focus on the areas of strategic management, knowledge management, intellectual capital measuring and reporting, organisational learning and human resources management. Dr. Jose Parreño works for the Department of Business Administration and Accountability, at the Faculty of Industrial Engineering of the University of Oviedo, Spain. His doctoral thesis was entitled Univariate and Multivariate Box-Jenkins Methodology: Application to the Electricity Market, Tourism and Copyright 2005 Inderscience Enterprises Ltd.
46 P. Ordoñez, J. Parreño and R. Pino Construction Sectors in Spain. His teaching and research initiatives focus on the areas of technology transfer, production management, and forecasting and applied artificial intelligence. Dr. Raul Pino works for the Department of Business Administration and Accountability, at the Faculty of Industrial Engineering of the University of Oviedo, Spain. His doctoral thesis was entitled Time Series Forecasting with Artificial Neural Nets. An application to the Spanish Electricity Market. His teaching and research initiatives focus on the areas of forecasting, applied artificial intelligence and simulation. 1 Introduction Rural tourism offers 9,000 accommodations in Spain, which means an average growth of 24.5% during last ten years, according to the report published by the real state consulting company IREA. If we analyse rural tourism in Spain by regions, the region of Castilla-Leon is the most important market for rural tourism in Spain, both in terms of offer and demand, due to its geographical localisation and extension. Catalonia, Cantabria and Asturias occupy a second position, all of them with occupation levels above national average. Its offer includes both interior and coastal tourism. Additionally, IREA report highlights that Murcia and Balearic Islands attract more rural tourists than the actual capacity of accommodation these regions offer. Basque Country, Madrid, and Catalonia exhibit high levels of occupation due to the fact that these regions are simultaneously the basic issuing markets of rural tourism users. The study highlights that the basic driver of this kind of tourism is the appearance of a new demand, built by people who look for open spaces where they can enjoy recreational sport and cultural activities, and are highly interested in the historical and natural heritage. IREA also points out that the delay of the Spanish rural tourism sector is rooted in the strong roots of the sol y playa (sun and sand) model that Spain historically experimented. This fact helps to explain why the first initiatives in this area were developed in the northern regions of the country (Asturias, Navarra, and Basque Country), which were relatively marginalised from dominant tourism. Regarding the future, the consulting company recognises that Spanish rural tourism must cope with a number of challenges to achieve a sustainable development, to increase the quality and facilities of the accommodations, get the professionalisation of the sector, create an associate group, standardise the regulating norms, solve the problem of normalised supply, as well as increase the promotion and commercialisation in the external market, basically in Europe. The rural tourism demand has undergone a huge increase in Spain (from 3.5 millions in 1990 to 8.5 millions in 1998). This spectacular increase is related to the process of changes that tourism demand is experimenting at international level, where the motivational changes play a key role. The tourist travels as a result of a need to know the environment and participate in it. This implies a higher valuation of the rural issues, as well as a higher interest in the necessity to preserve the environment. This paper provides an in-depth analysis of rural tourism in Spain.
Rural tourism in Spain 47 2 Rural tourism in Spain Table 1 shows that in 2004, Spanish rural tourism offered its accommodations to a total number of 1,758,596 tourists. Of this outstanding figure, 1,592,168 tourists were residents of Spain and the rest came from abroad. The average number of days spent in rural accommodations in Spain was 3.13 days. The autonomous region that received the highest number of travellers was Castilla-Leon (368,664 travellers in total) and the region that received the smallest number of travellers was La Rioja (16,899 travellers in total). The region in which travellers spent more days on average was Canary Islands (8.49 days) and the region in which travellers spent least days was Galicia (2.10 days). Table 1 Number of tourists, days and average days in rural tourist sector in 2004 Autonomous regions Total Number of travellers Residents in Spain Residents in abroad Total Number of nights Residents in Spain Residents in abroad Average days Total 1,758,596 1,592,168 166,428 5,506,223 4,553,571 952,652 3.13 Andalucía 90,141 71,259 18,880 309,457 217,126 92,331 3.43 Aragón 96,678 88,799 7,881 355,803 315,285 40,519 3.68 Asturias (Principado) 92,207 89,153 3,050 398,169 382,050 16,119 4.32 Balearic Islands 43,469 8,810 34,661 341,090 47,730 293,361 7.85 Canary Islands 31,753 12,141 19,610 269,735 69,183 200,553 8.49 Cantabria 143,683 131,998 11,685 397,543 361,458 36,084 2.77 Castilla León 368,664 353,661 15,003 897,404 855,887 41,520 2.43 Castilla-La Mancha 87,108 85,472 1,636 231,450 225,168 6,279 2.66 Catalonia 207,722 192,639 15,087 678,973 585,279 93,694 3.27 Comunidad Valenciana 114,823 108,403 6,419 373,247 339,233 34,015 3.25 Extremadura 58,538 54,205 4,330 129,949 118,443 11,504 2.22 Galicia 164,024 150,900 13,125 344,839 318,043 26,796 2.10 Madrid 57,794 55,810 1,983 127,818 121,563 6,256 2.21 Murcia 30,521 29,943 578 110,102 105,348 4,756 3.61 Navarra 66,691 64,229 2,463 253,002 240,898 12,104 3.79 Basque Country 87,890 78,702 9,187 244,214 209,884 34,331 2.78 Rioja 16,899 16,042 857 43,429 40,996 2,433 2.57 Ceuta and Melilla Inter-annual rate 19.60 20.17 14.47 22.66 21.93 26.28 2.55 Source: Spain s National Statistics Institute (2005)
48 P. Ordoñez, J. Parreño and R. Pino If we have a look at Table 2, we observe that, according to estimations, there were 8,236 operating accommodations and 71,508 beds in rural tourist sector in Spain in 2004. On average, the level of occupation was 20.80% and this increased to 33.06 during weekends. The estimated number of employees working in the rural tourist sector was 13,506. The autonomous region with the biggest number of operating rural accommodations was Castilla-Leon (1,445), followed by Catalonia (1,204), and Asturias (724). Table 2 Rural accommodations in Spain by autonomous regions Autonomous regions No. of operating rural accommodations (estimation) No. of beds (estimation) Level of occupation Level of occupation during weekends Level of occupation by bedrooms No. of employees Total 8,236 71,508 20.80 33.06 23.52 13,506 Andalucía 481 4,034 20.66 31.08 24.16 936 Aragón 641 4,825 19.82 30.21 22.22 733 Asturias (Principado) 724 4,939 21.59 28.50 22.58 969 Balearic Islands 136 2,265 40.80 43.84 43.55 765 Canary Islands 630 3,058 23.99 25.68 36.80 978 Cantabria 272 4,602 23.04 35.01 24.41 495 Castilla León 1,445 12,683 19.19 35.87 21.04 2,391 Castilla-La Mancha 569 4,357 14.39 28.79 16.21 845 Catalonia 1,024 8,242 22.32 38.06 25.23 1,524 Comunidad Valenciana 606 6,148 16.47 24.61 20.81 954 Extremadura 184 2,153 16.39 29.29 17.45 321 Galicia 430 4,976 18.59 28.12 19.97 747 Madrid 103 1,576 22.12 43.79 28.32 324 Murcia 286 2,080 14.36 25.36 16.02 557 Navarra 413 2,711 25.15 45.03 26.89 545 Basque Country 227 2,280 28.92 43.71 31.30 342 Rioja 66 579 20.23 36.92 20.68 80 Ceuta and Melilla Inter-annual rate 17.75 19.19 2.70 3.70 2.84 20.25 Source: Spain s National Statistics Institute (2005) Table 3 exhibits the distribution (in percentages) of Spanish travellers according to the autonomous region from which the travellers come from.
Rural tourism in Spain 49 Table 3 Distribution of Spanish travellers according to the autonomous region from which they come
50 P. Ordoñez, J. Parreño and R. Pino Table 3 Distribution of Spanish travellers according to the autonomous region from which they come (continued)
Rural tourism in Spain 51 Table 4 shows the number of travellers and days spent in rural accommodations in Spain. Germany and Great Britain are the countries from which more travellers come to Spain to spend their holidays in rural accommodations. As shown in Table 4, Luxembourg residents are not very interested in Spanish rural tourism as just 126 travellers arrived from this country last year. Table 4 Travellers and number of nights (by country of origin) Travellers Nights Countries Total % Total % Total 1,758,596 100.00 5,506,223 100.00 Residents in Spain 1,592,168 90.54 4,553,571 82.70 Residents abroad 166,428 9.46 952,652 17.30 Total residents abroad 166,429 100.00 952,652 100.00 Total residents in EU (excluding Spain) 146,390 87.96 862,769 90.56 Germany 42,872 25.76 386,803 40.60 Austria 1,091 0.66 5,134 0.54 Belgium 6,695 4.02 34,697 3.64 Denmark 960 0.58 4,395 0.46 Finland 693 0.42 2,309 0.24 France 27,864 16.74 112,414 11.80 Greece 441 0.26 1,666 0.17 The Netherlands 11,742 7.06 58,678 6.16 Ireland 2,951 1.77 8,421 0.88 Italy 5,188 3.12 17,610 1.85 Luxembourg 126 0.08 607 0.06 Portugal 4,881 2.93 20,154 2.12 Great Britain 39,575 23.78 205,351 21.56 Sweden 1,309 0.79 4,533 0.48 Other European countries 6,246 3.75 35,801 3.76 Africa 420 0.25 3,265 0.34 USA 5,777 3.47 27,777 2.92 Rest of American continent 5,713 3.43 15,669 1.64 Asia 408 0.25 2,626 0.28 Other countries 1,475 0.89 4,744 0.50 Source: Spain s National Statistics Institute (2005) Finally, Table 5 shows the evolution of rural tourism in Spain. April, July, August, October and December are the five months of the year in which more travellers use rural accommodations in Spain.
52 P. Ordoñez, J. Parreño and R. Pino Table 5 Evolution of rural tourism in 2004 (travellers, nights and average days) Number of travellers Number of nights Total Residents in Spain Residents in abroad Total Residents in Spain Residents in abroad Average days Total 1,758,596 1,592,168 166,428 5,506,223 4,553,571 952,652 3.13 January 70,849 66,678 4,171 208,329 180,214 28,115 2.94 February 104,443 96,594 7,849 235,900 190,546 45,354 2.26 March 125,951 117,170 8,781 307,260 252,914 54,346 2.44 April 174,200 159,920 14,280 505,696 429,423 76,273 2.90 May 132,581 114,288 18,293 318,005 234,411 83,594 2.40 June 141,732 124,760 16,972 373,810 287,611 86,199 2.64 July 177,595 154,357 23,238 678,454 538,929 139,525 3.82 August 243,318 219,522 23,796 1,239,459 1,072,338 167,122 5.09 September 145,345 125,190 20,155 442,117 337,149 104,968 3.04 October 178,684 164,659 14,025 474,188 394,246 79,942 2.65 November 115,199 106,801 8,397 262,211 215,191 47,020 2.28 December 148,700 142,229 6,471 460,793 420,599 40,194 3.10 Source: Spain s National Statistics Institute (2005) 3 Forecasting rural tourism in Spain The time series analysed in this paper belong to the rural tourism sector in Spain, and have been obtained from the Tempus data base at the Spanish Statistical Institute (INE) website (www.ine.es): total number of Spanish tourists total number of foreign tourists total number of rural accommodations open. All the three time series are composed of 51 monthly observations, from January 2001 to March 2005 and the time plots are depicted in Figures 1 3. Figure 1 Total number of Spanish tourists
Rural tourism in Spain 53 Figure 2 Total number of foreign tourists Figure 3 Total number of rural accommodations open Figures 1 and 2 show that number of Spanish and foreign tourists time series exhibit a strongly seasonal pattern, as expected, given the fact that tourism is a seasonal sector. The order of this annual seasonality is twelve, as the series are composed of monthly observations. In Figures 1 and 2, it can also be appreciated that these series show a slightly increasing trend. Spanish tourists series reaches a global maximum value every year in August and three local maximum peaks in April, October, and December. Foreign tourists series reaches similar maximum values in July and August, and two local maximums in April and December. Figure 3 shows that the number of rural accommodations open series is not as strongly seasonal as the number of tourists ones; instead, it shows a stronger increasing trend. Each year, the number of rural accommodations open reaches a maximum peak in August, and minimum values in December and January, despite of the fact that Spanish tourists increase during December. With these data, forecasts are going to be calculated for the period April December 2005. To obtain these forecasts, two well-known forecasting methods are used: Box-Jenkins (1970) and Artificial Neural Nets. Many authors have approached the issue of forecasting tourism time series in Spain (Esteban, 1993, 1997; González and
54 P. Ordoñez, J. Parreño and R. Pino Moral, 1995; Espasa, 1996; García-Ferrer and Queralt, 1997), as well as in other countries (Martin and Witt, 1989; Witt and Witt, 1995; Kulendran and King, 1997; Kulendran and Witt, 2001; Song et al., 2003). 3.1 Forecasts Figures 4 6 show the forecasts calculated with Box-Jenkins (BJ) and Neural Nets (NN) methods for the period April December 2005. Figure 4 Forecasts for Spanish tourists Figure 5 Forecasts for foreign tourists Figure 6 Forecasts for rural accommodations open
Rural tourism in Spain 55 Figures 4 and 5 show that both methods perform similar forecasts for both Spanish and foreign tourists series, predicting the three peaks in August, October and December for Spanish tourists, and the July-August similar values for the foreign tourists series. However, the two forecasting methods do not perform such similar forecasts for rural accommodations open, as can be seen in Figure 6: The shape of these curves is similar, and so does forecasting values for April, May, and June; but there is a gap between the forecasting curves during the period July November. 4 Conclusions Section 1 of the paper analyses the current situation of rural tourism in Spain. In particular, the paper describes the situation of this sector in terms of number of travellers (Spanish and non-spanish residents), Spanish regions from which resident tourists come and countries from which non-resident tourists come, average number of days tourists spend in Spanish rural accommodations and more. The results obtained from forecasting three key time series from the rural tourism sector are important, not only for tourism companies when they come to decision-taking, but also for local and central administrations when they come to establish their policies in the field. References Box, G.E.P. and Jenkins, G.M. (1970) Time Series Analysis: Forecasting and Control, Holden Day, San Francisco. Espasa, A. (1996) Características de la demanda en los estudios econométricos sobre el turismo e implicaciones de política económica y de estrategia empresarial, Información Comercial Española, Vol. 749, pp.77 88. Esteban, A. (1993) Previsiones de la demanda turística, Información Comercial Española, Vol. 749, pp.89 97. Esteban, A. (1997) La demanda turística internacional, La actividad turística española en 1996, AECIT, Vol. 1997, pp.39 47. García-Ferrer, A. and Queralt, R.A. (1997) A note on forecasting international tourism demand in Spain, International Journal of Forecasting, Vol. 13, pp.539 549. González, P. and Moral, P. (1995) An analysis of the international tourism demand in Spain, International Journal of Forecasting, Vol. 11, pp.233 251. Kulendran, N. and King, M.L. (1997) Forecasting international quarterly tourist flows using error-correction and time series models, International Journal of Forecasting, Vol. 13, pp.319 327. Kulendran, N. and Witt, S.F. (2001) Cointegration vs. least squares regression, Annals of Tourism Research, Vol. 28, pp.291 311. Martin, A. and Witt, F. (1989) Forecasting tourism demand: a comparison of the accuracy of several quantitative methods, International Journal of Forecasting, Vol. 5, pp.1 13. Song, H., Witt, S.F. and Jensen, T.C. (2003) Tourism forecasting: accuracy of alternative econometric models, International Journal of Forecasting, Vol. 19, pp.123 141.
56 P. Ordoñez, J. Parreño and R. Pino Spain s National Statistics Institute (INE) (2005) Encuesta de Ocupación en Alojamientos Turísticos, Alojamientos de turismo rural, www.ine.es Witt, S.F. and Witt, C.A. (1995) Forecasting tourism demand: a review of empirical research, International Journal of Forecasting, Vol. 11, pp.447 475. Website IREA (2005) IREA s report on rural tourism. www.irea.es.