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Feb 10, 2017
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From stained glass to stylists, Spain bids to be global shopping hub

Reuters API
Feb 10, 2017

Alongside revamps of tired beach resorts and restoration of stained glass, Spain is attempting to lure tourists with shopping city breaks to widen its appeal to the biggest spenders -- and not coincidently to keep its economic recovery on track.

Regional governments, construction and travel firms as well as shops are working hand-in-hand to recast Spain - and Madrid in particular - as a retail hub to rival Milan or Paris, at the epicentre of a wide movement to propel Madrid into the big league of global shopping destinations.

These efforts include simplifying Spain's value-added tax refund system from foreigners and promoting Madrid's shopping credentials with Chinese bloggers, many of whom were invited to tour the sights last year.

The sprawling Canalejas shopping complex is at the centre of the capital's luxury makeover. It is a private initiative - due for completion in 2018 - which involves refurbishing seven buildings and which will house Spain's first Four Seasons hotel.

With a price tag of 500 million euros (426 million pounds), the work includes renovating the ornate pillars, crumbling marble and mahogany wood interiors in the 19th century buildings, which were once used as head offices by Spanish banks.

"We are failing to attract the tourists we want," said Maria Jesus Escobar, public sector officer at Ernst & Young, at a recent tourism summit in Madrid. "We want to target those with the most purchasing power."

Tourist arrivals in Spain have reached record highs for four years in a row, growing to 75.6 million in 2016.

But some 20 percent of those were potentially "borrowed" from other Mediterranean destinations that have suffered from recent violence, such as Turkey or Egypt, according to industry lobby group Exceltur.

Retaining these visitors is key: tourism generates one in eight jobs in Spain and has underpinned its recovery from recession. But that alone is not enough.

The number of foreign visitors has risen around 30 percent since 2006, but their spending per head has actually decreased slightly. One reason for this is that Spain draws a fraction of the world's most profitable tourists - Chinese and Russians - and has cornered only 4 percent of Europe's luxury shopping market.


Playing catch-up will not be easy - nor unchallenged. France has gone all out in cutting visa turnaround times for Chinese tourists to 48 hours at most, for instance.

Singapore and Tokyo are also vying for attention from Asian shoppers while London's allure will get a fresh boost from a fall in the value of the pound following Britain's decision to leave the European Union.

But Spanish industry players are rising to the challenge, with airlines increasing the number of flights between Spain and Asia. Spanish carrier Iberia touched down in China for the first time in 2016.

Outlet centres in Madrid and northeastern Barcelona - a port city famed for its Gaudi architecture and a popular stopover for cruise ships - recently added chauffeurs, stylists and a hands-free service allowing shoppers to avoid carrying their own bags.

As for what is on offer, few Spanish brands attract the same recognition as Paris or Milan-based fashion houses.

But firms like luxury leather label Loewe or designers Adolfo Dominguez and Agatha Ruiz de la Prada may stand to benefit, and Madrid also boasts flagship outlets of Inditex , owner of high-street brands Zara and Massimo Dutti.

Like department stores in Paris or Moscow, Spain's El Corte Ingles chain has staffed up with Mandarin-speakers.

Fine jeweller Suarez, which already derives 60 percent of its sales from foreign tourists, has done the same and also hired Russian-speaking sales staff for its store in the high-end resort town of Marbella. "We need to create a cosmopolitan experience: one that is unique and that means promoting international brands alongside Spanish ones," said Carlos Delso, director of the 70-year-old family business which designed Queen Letizia's engagement ring.

Ernst & Young calculates that turning Spain into a shopping hub could more than triple spending by non-Europeans on tax free purchases to 5 billion euros ($5.4 billion) by 2019 - and create 50,000 jobs.

(Editing by Sarah White/Jeremy Gaunt)

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