Publications
REPORTS ON THE SECTORS IN THE ACBC
SUMMARY AND CONCLUSIONS
INTRODUCTION
The aim of this report is to overview the recent evolution, current situation and potential of the hotel and catering sector both nationally and internationally, and, in particular, in the Autonomous Community of the Basque Country (ACBC). This study is an update of the report produced in 1998 which focused on the catering sector (which included the branches of restaurants, bars, establishments providing catering services and communal canteens), and it completes it by including the activity of accommodation, so as to cover the hotel and catering sector in its entirety.
The report is divided into five chapters. By way of introduction, the first chapter defines the activity being studied. Chapter 2 examines the presence of the sector in the EU-15 and in the countries comprising it. Chapter 3 focuses on the results obtained by this sector in Spain, paying special attention to the territorial distribution of the sector in the different autonomous communities. Chapters 4 and 5 centre around the hotel and catering sector in the ACBC; the first of these illustrates its importance in Basque economic activity and in the Basque territories, and the second explores the world presence of the activity, its regional importance and the recognition of the quality of the sector present in each of them. Finally, chapter 6 gathers the conclusions regarding the main challenges and possibilities of the sector in the ACBC.
In terms of methodology, it is worth mentioning that in order to produce the report, statistical and economic information provided by official public institutions has been gathered and analysed (Eurostat, INE, Eustat, etc.), as these guarantee data homogeneity, continuity and comparability.
That said, however, one of the additional difficulties when analysing hotel and restaurant activity is precisely the quality of the information available. On one hand, this is updated for the number of establishments and is collected fairly reliably in the information relating to national accounts operations (in particular, the GVA generated by the sector as a whole and linked to total economic activity. Specific statistical operations, however, have different problems: in the case of Spain, there is an important difference between the annual services survey (INE) and other information produced by the same institution (National Accounts), and in the comparison between this and that obtained for the ACBC. On the other hand, the Hotel and Catering Survey for the ACBC is produced by Eustat every five years. As the latest one was produced in 1999, certain relevant magnitudes must therefore be estimated. Consequently, it is necessary to bear in mind that this group of methodological aspects jeopardize the comparability between both territories, and what is merely a methodological difference could be considered to be a difference.
THE SECTOR IN THE EUROPEAN UNION
In 2001, the EU-15 hotel and catering sector comprised 1,257,870 companies, employing almost 7 million people, with a turnover of 327,092 million euros, and a gross value added of 141,384 million euros. The importance of the sector is obvious since it represents 6% of the companies, 4% of employment, and 2% of the GVA generated by all EU-15 economic activity; in addition, it represents 6.6% of employment and 2.5% of the GVA generated by the service sector.
Corporate dimension is of a small company, employing on average 5.5 workers, which is even lower than that of the majority of tertiary activities. Productivity per employee is 20 thousand euros, a figure slightly lower than that of other service sectors, in keeping with its condition of a labour-intensive sector and in which technological advances have made little improvement to productivity. This means that the activity is determined by service to people and effective presence.
An analysis of each of the subsectors included in hotel and catering activity confirms that catering is clearly more important than accommodation: it is responsible for 84% of the companies and 75% of sector employment. However, its contribution in economic terms is slightly lower, concentrating 70% of turnover and 64% of GVA. Similarly, the subsector of hotels and other accommodation represents 16% of the total number of companies, 30% of turnover, and 36% of GVA.
The countries which play a determining role in the EU-15 hotel and catering sector are Germany, France, Spain, Italy and the United Kingdom. More specifically, Spain stands out for its greater contribution in terms of the number of establishments, with the United Kingdom for its contribution to employment and GVA of the hotel and catering sector in Europe. On the other hand, a greater average size of the sector has been detected in northern rather than southern countries. Finally, the component “nearby-resident population”, the spending power, and the flow of travellers have contributed to sector development.
THE SECTOR IN SPAIN
According to the INE National Accounts, in 2002, the hotel and catering sector in Spain generated 7.7% of GDP and 12% of GVA for the service sector. In addition, it represented 6.1% of total employment and 9.5% of that of the service sector. The corporate fabric which comprises the sector represents 10.4% of the total number of companies in Spain.
In view of more up-to-date data, the Spanish hotel and catering sector now consists of 283,674 companies, employing on average 3.9 people. The greatest values corresponds to hotels (17), followed by catering establishments and meal provision (8) and restaurants (6), followed by campsites and other accommodation (5), and finally, bars and other similar beverage-type establishments (2).
This average size and the distribution of the number of establishments may explain the weight of the catering branch. Consequently, 93% of Spanish hotel and catering establishments are involved in catering (and 65% are beverage establishments) responsible for 75% of sector employment, generating 68% of turnover, and making 31% of investment. 7% of the remaining hotel and catering establishments therefore correspond to the branch of accommodation, which contributes 25% of employment, 32% of turnover, and 69% of investment.
Turnover per job stands at 39.3 thousand euros but with an important dispersion according to the activity concerned: 51.5 thousand euros in the case of hotels, 46.9 in campsites and other types of accommodation; activities relating to catering stand at much lower figures: 38.9 thousand euros per job for restaurants, 33.4 for beverage establishments, and 30 thousand euros per job for other catering services. These figures must be treated cautiously in view of the important difference between economic data for the hotel and catering sector provided by the INE in this annual services survey and in the national accounts. This means that the figures produced from the annual services survey would be considerably undervalued to hotel and restaurant activity.
The spatial distribution of hotel and restaurant activity shows a clear concentration in a small number of autonomous communities: Andalucía, Catalonia, Valencian Community, Madrid, and the Canary and Balearic Isles. An examination of the number of hotel and catering establishments highlight Andalucía (17%) and Catalonia (15%). In the case of employment, the majority are concentrated in Catalonia (18%) and Madrid (16%). Finally, Catalonia represents practically a fifth of sector turnover and GVA (19.6% and 19.7%, respectively), Madrid occupies second place (16%, respectively) with Andalucía in third place (12% and 11.5%, respectively).
THE SECTOR IN ACBC
In 2003, the hotel and catering sector contributed almost 4% of the Basque GDP and 5% of total employment in the ACBC. In absolute terms, the sector generates a GVA of 1,514 million euros, with 46,995 people employed in 13,981 companies, which represent 9% of the Basque corporate fabric.
The Basque hotel and catering sector is characterised by the greater importance of restaurant activity in comparison with accommodation in terms of the GVA and employment, although these have become more important and have consolidated their position over the last four years: whereas in 1999, accommodation represented 15% and 10.1% of GVA and employment for the hotel and catering sector, in 2003, it represented 20% and 13%, respectively. In addition, the catering subsector comprises almost all Basque hotel and catering establishments (94.5%): this means that seven out of every ten are beverage establishments and one out of every four is a restaurant.
Turnover per job amounts to 64,512 euros per employee, exceeded in the hotel branch in particular with a figure of 136,483 euros and by meal provision, with 111,913. On the other hand, in restaurant activity, this amounted to 89,891 euros and in the case of beverage establishments, to 60,261 euros.
These figures are in keeping with the average size of hotel and catering establishments: they are small-sized companies employing on average 3 employees. Logically, the largest branches are those of hotels (8 people) and catering services (14 people). Similarly, the small average size of the hotel sector explains why 73.6% choose the legal form of “individual”, included in the general concept of “self-employed person”.
Given the territorial breakdown, the weight in both GVA and employment stands out in Bizkaia (50% and 51%, respectively), followed by Gipuzkoa (33% and 35%), and Álava (16.5% and 14.1%). The importance of the sector in each of the economic territories is similar, although it is worth mentioning that Gipuzkoa presents the highest values and its contribution is in keeping with its more traditional position as a tourist destination.
The quality is a recognisable value in the Basque network. Consequently, 19% of Basque hotels may be described as high-grade (three or more stars), a higher percentage than that of Madrid, but lower than that of Catalonia. On the other hand, the quality of Basque restaurants is clearly recognised in the Gourmetour and Michelin guides: this last one shows that 12% of restaurants recognised in the guide have been awarded two or three Michelin stars, while in the ACBC in particular this percentage rises to a third (33%).
THE HOTEL AND CATERING SECTOR IN THE BASQUE MUNICIPALITIES
The importance and composition of the hotel and catering sector in the ACBC and its distribution in the three historic territories and in the most important municipalities highlights two facts. Firstly, the distribution of average activity in terms of employment or establishments matches the usual distribution pattern determined by the population: Bizkaia contributes approximately slightly more than half (51%, in employment), Gipuzkoa slightly more than a third (35%) and Álava the remainder (14%). Secondly, the relative importance of the sector is fairly similar for the different territories.
However, the result of the importance and size of the hotel and catering sector is on a par with its degree of complexity. The development of the hotel and catering sector evidently matches the sum of the partial dynamisms which are not equal. It may therefore be said that
- The accommodation sector is projected outwards, with the central function of accommodating the visitor, the tourist.
- On the other hand, the branch of restaurant activity in the ACBC is half way between the proximity service and expert visitor care. The origin, development and possibly consolidation of the Basque catering/gastronomy duo is to be found in the society which it serves, to the purpose of this nearby demand and the environment. However, to the extent that quality is already an international and widespread acknowledgement, the Basque restaurant network has started to have a “brand image”.
- The so-called beverage establishments are one of the most heterogeneous branches within hotel and catering activity, especially since the original classification does not always reflect real supply.
For example, a tapas bar might appear as a beverage establishment, with a very different dynamics to that of the original bar. - And finally, the branch of activity of other meal provision services has emerged to cater for the needs of surrounding society. This shows the greater sector dynamism growing in companies, and the increase in employment and type of service offered. Each municipality’s hotel and catering sector has therefore developed according to the distribution of the different branches of activity present in the sector and the quality which has currently been attained. Therefore,
- The first group includes those municipalities where hotel activity represents at least 4% of the number of establishments, restaurants are responsible for more than 25%, and beverage establishments do not exceed 70%. This group includes municipalities which are renowned for tourism such as Donostia-San Sebastián and Hondarribia, in addition to Zarautz; and also municipalities which are either administrative centres (i.e. Tolosa or Irún), or very important in their Bermeo region.
- The second group includes those municipalities where hotels represent between 3% and 4% of the total number of establishments, restaurants between 15% and 25%, and beverage establishments between 70% and 80% of the total number of establishments. The main municipalities of this group are Bilbao and Vitoria-Gasteiz, in addition to Gernika-Lumo, as the municipal enclave of the region and Arrasate-Mondragón and Llodio, both with an important industrial stamp.
- Finally, the third of the groups is dominated by the presence of the component of beverage establishments which represent more than 80% of the sector. This group includes municipalities such as Ermua, Portugalete, Barakaldo and Santurtzi (within the group of traditionally industrial municipalities of Bizkaia), and also Pasaia (with an important port presence) and Lasarte-Oria (in the context of Gipuzkoa). Additionally, Eibar and Errenteria, as administrative centres, also have a more developed restaurant activity
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% Beverage establishments |
under 70% |
(1) Hernani *** |
(2) Hondarribia |
Over 4% |
% Hotels |
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70-80% |
(11)Arrasate-Mondragón ** |
(13)Bilbao |
4-3% |
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Under 80% |
(21)Ermua |
(27)Eibar |
Under 3 % |
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* Has more than 3% in hotels |
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COMPETITIVE POSITION OF THE BASQUE HOTEL AND CATERING SECTOR
The recent evolution of the hotel and catering sector is in keeping with the improvement in personal income, changing habits and the demand of travellers coming to the ACBC. This type of change has meant that the hotel and catering sector has had to respond to a panel of consumers with greater requirements and expertise. On the other hand, the activity of the hotel and catering sector may be considered to be mature due to its continuing presence in the structure of the Basque economy. In the last decade, however, there has been a progressive transformation which has involved the consolidation and even reduction in sector size (number of establishments) in favour of quality.
As for many other service activities, the challenges facing the sector are training, professionalization and social recognition of these activities. To this is added specialization (or the concretion of the goal client niche), which is the basis for success in this activity and may be applied to all corporate sizes.
The SWOT analysis presents the main factors which determine its scenario (Opportunities and Threats) against those with which the sector develops its competitive position (Strengths and Weaknesses).
| STRENGTHS | WEAKNESSES |
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| OPP0RTUNITIES | THREATS |
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