We wake up today with the increase of the VAT from 8% to 10%.
Even when expected it is not a good news due to the current situation. Some years ago, when IVA increased from 7% to 8% most of companies decided to keep prices and take on the added point as minus profit. Crisis started but it was not so serious as nowadays.
Tourism is one of the best-positioned industries in Spain to growth and create wealth but some measures are damaging the possibilities. It is not an only question of IVA but about airport taxes and touristic taxes as well. What should touristic companies do? take the two points IVA difference on and lose more profitability or increase rates? It is not a simple answer.
One of the industry fears is to lose competitivity over other destinations like Italy, Turkey or even France. It is not been a good year and summer season seems to be difficult as well. Just a few lucky cities/areas, like Barcelona, can feel a little bit better than the other ones.
This is not an optimistic scene. Perhaps we were optimistic in the past years easier than we should be. But at the end, last measures seem to arrive to kill the growth.