Outside Turmoil May Boost Spain’s Tourism : Europe: Officials hope the troubles on two sides of the Mediterranean will benefit them.

Spain, shaken by a sharp drop in its tourist trade, hopes the turmoil on the eastern and southern shores of the Mediterranean will send vacationers flocking back.

The Gulf War and Muslim fundamentalist violence in Algeria have scared tourists away from Spain’s competitors in the sun and sand holiday market--North Africa, Greece and Turkey. Now, internal strife has sent them packing from Yugoslavia.

Fernando Panizo, secretary general of tourism, predicts the decline in Spanish tourism that began in 1989 will end this year.

“External circumstances could help Spanish tourism improve this year,” agreed Luis Callejon, president of the powerful hoteliers’ federation Zontur.

He said North Africa and Yugoslavia are “disappearing” as tourist destinations.

A slightly weaker peseta and worries about security in other Mediterranean countries also mean more Spaniards have chosen to spend their holidays in their own country this year.

Spaniards spend twice as much on vacations as foreign tourists.

The importance of tourism to Spain is underlined by the fact that the industry employs one in seven workers and accounts for 10% of gross domestic product.

Last year the number of tourists entering Spain dropped nearly 4%, to 52 million, while income from tourism in pesetas shrank 2.4%.

But May saw a rise of nearly 9% percent in arrivals and a 0.5% increase in income. The German market grew 30%, although the flow of Britons continued to diminish.

Hoteliers are still in the dark about what the peak season--which began in mid-July--holds in store, as tour operators are delaying confirming reservations until the last moment.

They say operators are using scare tactics to push for even lower prices for 1992 contracts to be signed in a month’s time, but desperate hoteliers have already chopped prices to rock-bottom levels to beat the recession.

Middle-range hotels are charging as little as 1,000 pesetas ($8.70) a night with breakfast.

“So when tourists see dinner costs them more than their hotel room, they think the dinner is expensive,” Panizo said.

This dive in prices is bad for hoteliers and for Spain’s image. It attracts the “tattooed tourists,” who drink heavily, spend lightly and scare away big spenders, Callejon said.

“We have been a special offer for five years. No product can stay on the supermarket shelf on offer that long,” he said.

The Spanish tourism industry knows the boom years from the 1960s to 1988 have gone for good.

So Spain must improve quality and tempt tourists to spend more.

The government is rapidly cleaning up the beaches and has sent 4,000 extra police officers to the coasts to combat crime. Tourists also complain about nighttime din.

“Some Spanish resorts are very noisy, but a lot of tourists want to go to noisy places with lots of discos and bars,” Panizo said. “If they want peace, there are plenty of quiet spots.”

The hoteliers’ federation wants to increase hotel prices to keep out the hooligan element, but without going too upscale.

The government hopes to diversify the traditional cheap fare of sun and sand to include higher spending holidays in the interior with lashings of monuments and culture on the menu.

It has launched a three-year campaign in the United States with state airline Iberia and American Express to promote holidays in the interior, taking in cities like Seville, Granada, Salamanca and Toledo. There are plans for a similar campaign in Japan.

The Gulf War hit the flow of tourists from the United States.

“The American tourist is highly cautious, and when something happens in or near Europe their numbers drop off,” Panizo said. “After the bombing of Libya (by U.S. planes in 1986) they fell off 50%, and it took us four years to win them back.”

Despite the beauty and remarkable diversity of Spain’s interior, its main commodities will always be sun and sand.

“Half the tourists who come here don’t know the interior,” Panizo said. “They come here looking for a little sunshine, and we can’t change that.”