EVALUATION OF THE PROFITABILITY AND ECONOMIC IMPACT GENERATED BY

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					   Evaluación




 EVALUATION OF THE
 PROFITABILITY AND
  ECONOMIC IMPACT
 GENERATED BY THE
   EUROPE SENIOR
TOURISM PROGRAMME

        - WORKING DOCUMENT-




                              May 2010



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            Evaluation of the Profitability and Economic impact generated by the Europe Senior Tourism Programme



                                                                     Index

1.            Introduction....................................................................................................................... 3
     1.1.       Presentation .................................................................................................................. 3
     1.2.       The problems of the seasonality of tourism .................................................................. 4
     1.3.       Implication of Europe..................................................................................................... 5
2.            Senior Tourism ................................................................................................................. 7
3.            Objective of the project................................................................................................... 11
4.            Description of the Programme........................................................................................ 12
     4.1.       General description ..................................................................................................... 12
     4.2.       Contracting Process .................................................................................................... 14
     4.3.       Contracting of the organisation, management and execution of the programme........... 14
     4.4.       Actions carried out to promote and help commercialisation........................................ 15
5.            Definition of the methodology model.............................................................................. 20
     5.1.       Introduction.................................................................................................................. 20
     5.2.       Economic impact and activity. ..................................................................................... 21
     5.3.       Generated jobs ............................................................................................................ 23
     5.4.       Return on investment for the Government .................................................................. 23
6.            Estimation of the distribution of the volume of users ..................................................... 24
     6.1.       Estimation of users ...................................................................................................... 24
     6.2.       Level of satisfaction with the experience..................................................................... 26
7.            Tourist package pricing .................................................................................................. 28
8.            Pricing of additional expenses at the destination ........................................................... 32
9.            Average value of the tourist package............................................................................. 33
10.           Economic impact of the Programme .............................................................................. 35
     10.1.      Direct impact of buying the package ........................................................................... 35
     10.2.      Direct impact per expense at the destination .............................................................. 36
     10.3.      Total impact at the destination .................................................................................... 38
11.           Direct employment generated ........................................................................................ 39
12.           Income, return on investment and assessment of profitability ....................................... 41
     12.1.      Estimation of income for the Spanish Government..................................................... 41
     12.2.      Return on investment for the Spanish Government .................................................... 46
13.           Impact of the Programme at the Origin - Rest of EU ..................................................... 47
14.           Estimation of income obtained by the European administrations .................................. 51
15.           Balance of Payments ..................................................................................................... 56
16.           Final evaluation of the Programme ................................................................................ 57




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       Evaluation of the Profitability and Economic impact generated by the Europe Senior Tourism Programme




1. Introduction
1.1.     Presentation

The seasonality of tourism in Spain, and in Europe in general, is one of the most relevant
limitations when trying to improve its competitiveness, and business and social-economic
profitability. In a time of recession and budget cuts in the public administrations, an opportunity
to strengthen the tourist activity in the mid and low seasons arises, by rekindling the labour
market with an active employment policy, strengthening the relations between the societies of
the EU member states, and extending citizens’ right to travel and go on holiday, through social
programmes that facilitate and motivate new influxes of tourists.

Turespaña has launched the “Europe Senior Tourism” pilot project, an internationally pioneering
project, with the aim of boosting senior tourism amongst European countries. Because Spain is
the internationally leading country in holiday tourism, and the country that offers the best
combination of good climate and quality tourist facilities, it is spearheading an initiative in
Europe in order to generate new influxes of tourists amongst member states.

The European Social Tourism Programme “Europe Senior Tourism” is included in the general
competences and objectives of the State Secretary for Tourism, marked by the Horizon 2020
Spanish Tourism Plan and especially in the fight against seasonality of tourism and promotion
of employment in the tourism sector.

Consequently, TURESPAÑA, commissioned by SEGITTUR, has designed and managed the
Programme for the 2009-2010 season, with the aim of fulfilling the following objectives:

         To favour year-round tourist activity as a priority, and consequently assist in the creation
         and maintenance of employment throughout the low season in the tourist sector, and
         particularly in the hotel and catering industry, thereby contributing to alleviating
         seasonality in the sector

         To collaborate in improving the quality of life of senior citizens in Europe through
         participation in travel and tourist activities, by engaging in other environments and
         getting to know about the cultural and natural resources in European countries

         To contribute to building European Citizenship, because the Programme is transnational

It is known that the population in Europe is gradually growing older and this means that a larger
number of Europeans are retired and financially comfortable, and a large percentage of them
are fully capable of travelling and carrying out many activities.

On the other hand, because the accommodation capacity has increased in our country, thanks
to the constant economic growth in recent years, many Spanish destinations are at risk of losing
competitiveness. This foreseeable imbalance between the offer and demand may last over time
and therefore have negative consequences. For that reason, the Spanish tourism sector must
be creative when generating new demand segments.

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        Evaluation of the Profitability and Economic impact generated by the Europe Senior Tourism Programme



Spain has successful experience – the Senior Holiday Programme by the IMSERSO (Spanish
State Institute for Seniors and Social Services), which also appeared in a time of financial crisis,
at the beginning of the 1990s, with the aim of maintaining the level of economic activity in the
sector, and consequently, jobs in times of less demand.

This experience, which started over 20 years ago, has proved the important contributions that
the sector is making, although during its initial stages there were certain faults which were
solved over time. Several studies commissioned by the Mundo Social Joint Venture of the
Economic Impact of the Senior Holiday Programme have proved the high social and economic
impact generated by this programme, as well as its high profitability for the State.

In the tourist destinations, business owners and local institutions acknowledge the benefits
generated by this programme, and, therefore, given the existing volume of demand, they
understand that it is an opportunity to stop the economic activity falling abruptly.


1.2.      The problems of the seasonality of tourism

As we mentioned before, one of the worst problems that the traditional tourism sector must face
is “seasonality”. The sector is influenced by the concentration of travellers in a certain time of
the year, and this conditions the economy in many areas and causes considerable employment
fluctuations. For many years now, the administrations and the tourism sector are using many
resources to try to solve this situation.

The current society is changing the traditional leisure system for tourism that is less bound to
regulations and less categorised. The higher level of economic and cultural life of tourists has
changed current tourism habits. Tourism demands tourist destinations that allow more and more
freedom to act and a more diversified offer where tourists can freely choose what to spend their
time on.

This change of trend started some years ago now in Europe in general and also in Spain,
though slowly at first. Since the crisis of the beginning of the 1990s, when tourism suffered a
process of stagnation that lasted a few years, tourism policy has undergone an important
change and has started to consider a change in the tourism model, by promoting an alternative
offer (mainly for cultural and natural elements). In any case, this does not mean abandoning the
traditional tourism model, the mainstay of the economy of many destinations in the continent.

As the Horizon 2020 Spanish Tourism Plan says, some of the main guidelines to be followed in
the near future, and which are included in the document "Bases for the Development of the
Social and Regional Rebalance Plan", are:

    •      The new de-seasonalisation programmes must be based on catching the interest of a
           new demand segment, complementary and compatible with the existing ones, through
           the development of the tourist product required by the demand ”.

    •      “... it is necessary to intensify innovation, specialisation and differentiation at the
           destinations and of tourist products...”

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          Evaluation of the Profitability and Economic impact generated by the Europe Senior Tourism Programme



      •     “... it is necessary to adapt the portfolio of tourist products to the new demand
            trends, and this objective must be one of the main priorities in the following years.”

      •     “Innovation in the portfolio of tourist products must be based on the identification of
            opportunities and resources that have a high tourist potential.”

      •     “... the decision processes must be based on research for the potential demand of
            tourist destinations...”.

In this changing environment, a Programme like this one can prove to be a good opportunity to
re-launch the economic activity of the European tourism areas, by activating local economies
and generating jobs in seasons of low levels of occupancy.


1.3.        Implication of Europe

“The society in general faces increasingly greater changes and challenges. The appearance of
new family structures, single people with their own homes, the increase of life expectancy,
financial restrictions, employment factors and more free time, as well as the fact that the
population is growing older are all factors that are noticeably altering the tourism industry in
Europe. For many years now the trend has been moving towards the universalisation of the
meaning of holidays.”1

As a response to these trends, in December 2008, the European Parliament voted to adopt a
preparatory action for the development of social tourism in Europe. This action, called CALYPSO,
was launched in 2009 by the European Commission Tourism Unit. The project had a budget of a
million euros for 2009, another million for 2010 and the budget for 2011 is still pending. The initiative
was launched because nowadays many citizens are still excluded from tourism and travel. Calypso
aims to solve this social difference, ensuring universal access to holidays. The project is a real
opportunity to promote cooperation across the European Union and to promote local, regional and
international cooperation. Four objective groups have been defined.

            Adults and retired persons

            Young people

            Disabled adults with an accompanying person, if necessary.

            Families (children, parents and/or grandparents) who have a certificate from their
            country and the corresponding authority that proves their social difficulty (financial,
            personal and/or disability).

The aim of Calypso is to promote social tourism amongst EU member states in order to
“increase employment (more and better jobs), reduce seasonality of tourism, strengthen the
bonds between European citizens, generate economic activity and growth in Europe, and
activate regional/local economies with the development of social tourism”.

1
    Text taken from the Work Programme of the CALYPSO 2009 Preparatory Action, European Commission.



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      Evaluation of the Profitability and Economic impact generated by the Europe Senior Tourism Programme



In 2009 a study was commissioned and the results will be published in June. The aim of the
study is to:

        Catalogue the most representative good practices to boost tourist activity in the low season

        Identify existing measures nationally and in Europe which enable people in the four
        object groups to travel

        Examine the difficulties relating to this travel and suggest appropriate solutions

The implementation of the project's results could entail an important boost for the economic
activity and growth in Europe, with the reduction of seasonality of tourism, the creation of
employment in the tourism sector, and finally, the strengthening of the bonds between
European citizens.

In this sense, the “Europe Senior Tourism” programme is fully committed to the European ideal,
and seeks to encourage the integration and participation of other European Union countries in
future editions. This initiative by Spain is part of the Calypso preparatory action.




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      Evaluation of the Profitability and Economic impact generated by the Europe Senior Tourism Programme




2. Senior Tourism
Population distribution in the EU

Regarding the demographic situation of the EU, most of the people are adults, the population is
gradually growing older and the number of young people is decreasing. This situation could
prove to be worrying in some European countries, such as Germany, Austria, France, Spain,
Belgium, The Netherlands, Iceland, the Scandinavian countries, Denmark, Greece and the
United Kingdom, where the population pyramid is inverted and there are not many young
people, especially children.

This phenomenon has also started to appear in Eastern Europe in recent years, where the Fall
of Communism in the 1990s caused the birth rate to drop, which was already quite low in the
European Communist countries, and the death rate increased.

In recent years, the birth rate has stopped falling so abruptly in the former communist block and
the population is currently being stabilised (1.5 children per woman). In countries such as
Ireland, Italy, Portugal and Switzerland, the birth rate is more balanced and their demography
does not have an inverted pyramid.

The total population of the European Union (EU) in 2009 was approximately 499,747,211
people. Despite the EU population being the third largest demographic power in the world, after
China and India, it only contributed towards the increase of world population by 2%, which
increased by 75 million in total. In the past few years this growth trend has reversed as a direct
consequence of the effect that immigration is having on the entire EU.

Because of all this, in the EU there are currently more than 90 million people from 55 to 80
years old, accounting for 19% of the total population.

                          Adult population census in Europe (Eurostat 2010)


                                                                                           TOTAL
          Country             55-59           60-64          65-69           70-74
                                                                                         POPULATION
     Belgium                   564,272        504,830        503,025         467,622          2,039,749
     Bulgaria                  483,567        440,768        455,040         388,893          1,768,268
     Czech Republic            639,806        473,212        434,561         406,120          1,953,699
     Denmark                   356,621        267,062        219,974         193,071          1,036,728
     Germany                 4,993,800      6,009,200      4,449,400       3,791,300         19,243,700
     Estonia                    74,163         82,746         69,442          60,865            287,216
     Ireland                   194,302        150,821        129,949         109,028            584,100
     Greece                    560,215        640,074        623,245         545,018          2,368,552
     Spain                   2,202,650      1,838,452      2,071,821       1,823,131          7,936,054
     France                  2,723,642      2,728,569      2,726,206       2,440,468         10,618,885
     Italy                   3,324,773      3,464,947      3,079,948       2,803,512         12,673,180
     Cyprus                     34,554         30,747         25,445          20,965            111,711
     Latvia                    142,030        146,069        120,498         105,557            514,154
     Lithuania                 184,810        182,838        167,594         143,502            678,744
     Luxembourg                 22,434         20,441         18,548          17,502             78,925


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      Evaluation of the Profitability and Economic impact generated by the Europe Senior Tourism Programme



     Hungary                    609,276    535,309    490,297    437,347                      2,072,229
     Netherlands                875,099    742,531    643,820    558,521                      2,819,971
     Austria                    452,265    451,057    332,596    327,321                      1,563,239
     Poland                   1,768,483 1,630,834 1,587,809 1,423,374                         6,410,500
     Portugal                   571,452    550,916    538,165    453,962                      2,114,495
     Romania                  1,051,616 1,143,333 1,092,192      895,026                      4,182,167
     Slovenia                   105,161    103,609     95,550     83,473                        387,793
     Slovakia                   255,423    218,344    197,491    175,488                        846,746
     Finland                    310,083    256,916    225,524    211,265                      1,003,788
     Sweden                     591,181    442,477    378,259    362,075                      1,773,992
     United Kingdom           3,339,004 2,880,074 2,596,939 2,339,320                        11,155,337
     Iceland                     12,801      9,715      9,523      8,812                         40,851
     Liechtenstein                1,980      1,392      1,014        867                          5,253
     Norway                     269,320    190,808    163,197    161,097                        784,422
     Switzerland                444,040    351,294    314,099    274,959                      1,384,392
     Total Europe            27,158,823 26,489,385 23,761,171 21,029,461                     98,438,840


General ageing of the population in Europe

According to the study of the population and social conditions carried out by Eurostat in January
2010, forecasts say that the population in Europe is going to carry on ageing and the rate might
even get higher in the future. The combination of three factors – the current structure of the
population, the birth rate drop and the rise in number of people who live longer – will favour the
increase of the average age in the population of Europe.

In the following decades, the ageing of “baby boomers” will increase the number of elderly people.
Consequently, and according to forecasts, the population over 65 will grow from 2008 to 2030.

Currently, the population over 65 accounts for 17.4% of the total population in Europe and
forecasts say that in 2030 it will be 23.6%. The following table shows the percentage of
population over 65 from different European countries in the year 2010 and the forecast for 2030.

 Percentage of population over 65 out of the total population in each country in the year
                                      2010 and the forecast for 2030

                                                % of total population over 65
                            Country
                                                   2010                     2030
                    Austria                      17.60%                    23.70%
                    Belgium                      17.40%                    23.60%
                    Denmark                      16.40%                    22.80%
                    Slovakia                     12.30%                    21.30%
                    Slovenia                     16.60%                    25.30%
                    Spain                        16.70%                    22.10%
                    France                       16.70%                    23.20%
                    Greece                       18.90%                    24.20%
                    Hungary                       16.60%                   22.00%
                    Ireland                      11.30%                    16.00%
                    Italy                        20.30%                    26.20%


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      Evaluation of the Profitability and Economic impact generated by the Europe Senior Tourism Programme




                    Netherlands                  15.30%                     24.10%
                    Poland                       13.60%                     23.00%
                    Portugal                     17.80%                     23.30%
                    Czech Republic               15.40%                     22.90%
                    Romania                      14.90%                     20.30%
                        Source: Population and social conditions. Eurostat. January 2010

Opportunity for the tourism sector

Because life expectancy has risen in developed countries and because of the negative
demographic growth rates (except the effect of immigration), the senior segment has started to
become strategically important in recent years. In the West, it is becoming more common for
retired people to go on holiday and practise leisure activities. They have become a consumerist
segment that can generate business opportunities in itself.

Generally speaking, the following features define this segment:

        In some cases, only the population segments from 50 to 69 years old are considered:
        they are healthier and more active. In other studies, older population segments are also
        included (over 69 years old) who are more passive.

        The purchasing power of seniors is higher than the average. In countries such as
        Germany, Austria, Switzerland or the Scandinavian countries, it is considered the
        segment with the most money available for consumption per family unit.

        They are especially interested in sports like swimming, hiking, wellness, gymnastics,
        sailing and golf.

        “Eating well” is becoming more and more part of their lifestyle.

        Quality largely influences when deciding to spend their money on something.

        In Central European markets, it is the segment that is readier to pay a higher price
        for higher quality. This trend is especially important in the consumption of products
        relating to “holidays”, “eating well” and "health”. They are even more interested in
        anything luxury-related.

        They are readier to “enjoy life”.

        They use new technologies as means of information less than young people.
        Specialised magazines and mass media are more important for them in general.

To sum up, it is a profile of travellers with purchasing power who seek to enjoy quality
experiences relating to wellness, health, sport and culture.




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      Evaluation of the Profitability and Economic impact generated by the Europe Senior Tourism Programme



The report on tourism trends in Europe, prepared by the European Travel Commission in
September 2006, shows that the number of people in the senior segment will rapidly grow in the
medium term. People in this age group have better health and have more money than before.
Many of them also retire early. Older people improve their financial position and purchasing
power for several reasons, such as:

        Their children have emancipated – they no longer depend financially on their parents;

        They have no mortgages or they pay relatively low monthly amounts;

        They have savings or pension schemes, as well as their retirement payment.

In view of this evolution, the number of experienced senior tourists will grow faster than tourism
in general, although pensions are likely to go down progressively and the age of retirement is
likely to go up, so this may slow down the development of senior tourism in the long term.

However, the appearance in the past years of this group in the population as a new market
segment creates new and highly interesting business opportunities for the European tourism
sector. Because the demand for year-round quality products and services has increased, the
sector has a unique opportunity to offer solutions for the new needs of the market.

The main consequences, amongst others, for the tourism sector will be:

        Increased demand for quality, comfort and safety
        Increased demand for easy transport
        Increasing demand for more relaxing leisure facilities such as golf, wellness...
        Increased demand for products for one person
        Larger demand in the low season
        When commercialising, the focus should be less on age and more on comfort
        The ageing of the population and the increasing concern for health may lead to an
        increased demand for wellness and spa services tourism
        Increased interest towards cultural tourism and programmes specially designed for
        senior travellers

In this sense, experiences like the “Europe Senior Tourism” Pilot Project confirm the large
potential of this segment for the future, the need and will of the sector to adapt to its needs and
the convenience of having the relevant public institutions supporting initiatives that generate
economic activity and employment, like this one.




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      Evaluation of the Profitability and Economic impact generated by the Europe Senior Tourism Programme




3. Objective of the project
The aim of the project is to:



    Evaluate the economic and social impact that the Europe Senior Tourism Programme
     has generated and analyse the global profitability of the programme for the Spanish
   tourism sector and for the State, as well as to estimate the economic impact generated
          on the rest of the EU, in the pilot stage developed in the 2009/2010 season.




The specific objectives are to:

        Analyse the direct and indirect expenses generated by the project and estimate the
        distribution of the total expenses at the destination and origin, by items

        Evaluate the impact of the activity and employment generated by the project in the
        Europe tourism sector

        Evaluate the social-economic impact generated by the programme

        Evaluate the costs arising from inactivity in the sector if the project had not been launched

        Evaluate the global profitability of the programme for the different agents involved, both
        public and private

        Evaluate the effects on the Balance of Payments

        Learn lessons that enable the improvement of the programme’s profitability for future
        editions

Scope and hypotheses.

The programme was designed for a maximum of 80,000 travellers, 40,000 for each participating
autonomous region. Despite this, and given the condition of the pilot programme, it is estimated
that in the end 45,000 people booked to go to the different destinations in the regions of
Andalusia and the Balearic Islands.

This document defines the base structure of the calculation and evaluation of the impact of the
programme. For this, and based on data that are not definite yet, the cost of the programme and
the direct impact have been estimated, at the destination and at the origin, generated whilst the
programme lasted.

In order to get an approximate estimation, some calculations have been simplified by using
certain hypotheses that are explained in every calculation.




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         Evaluation of the Profitability and Economic impact generated by the Europe Senior Tourism Programme




4. Description of the Programme
4.1.        General description

The project consists of setting up a system of group travel to take place during the mid and low
season, which would be partially subsidised by the destination countries and aimed primarily at
European Union citizens over the age of 55. It is based on the experience of the Programme of
Social Tourism organised by the IMSERSO (Spanish State Institute for Seniors and Social
Services), but would have European transnationality as its main innovative characteristic.2

The first edition of the programme took place from October 2009 to April 2010, at the following
destinations: Majorca, Minorca, Ibiza (Balearic Islands), Costa de la Luz and Costa del Sol
(Andalusia).

The initial budget for the project was 10 million euros: 5 million provided by Turespaña and the
rest by the two participating autonomous regions, equally.

The packages were for stays of: 8 days (7 nights), 15 days (14 nights), 22 days (21 nights), and
29 days (28 nights).

Packages include: return trip, transfer from the departure airport to the destination hotel, and
from the hotel to the airport of origin (the same one as at the beginning of the trip),
accommodation in 4-star hotels, full-board, drinks included (water and wine), daily
entertainment programme, two excursions in the area and travel insurance.

A winter holiday in Spain:

            Coming from Slovakia, Hungary, Czech Republic or Poland. (Final price after applying
            the subsidy.)

                      - 343 € (8 days)

                      - 488 € (15 days)

                      - 668 € (22 days)

                      - 829 € (29 days)

            Coming from France, Italy, Denmark, Belgium, Netherlands, Greece, Austria, Portugal,
            Slovenia, Bulgaria, Romania or Ireland. (Final price after applying the subsidy.)

                      - 365 € (8 days)

                      - 524 € (15 days)

                      - 700 € (22 days)

                      - 855 € (29 days)



2
    Text taken from the Segittur website.



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      Evaluation of the Profitability and Economic impact generated by the Europe Senior Tourism Programme



The Spanish Government and the Balearic Islands and Andalusia regional governments have
laid down some maximum prices to be paid by the beneficiaries in order to enable as many
people as possible to travel to Spain during the winter.

With this objective in mind, they pay a fixed sum of 150 euros to beneficiaries residing in Poland,
Hungary, Czech Republic and Slovakia; and 100 euros to residents in the rest of the EU countries,
except Spain, Germany, United Kingdom, Finland, Sweden, Estonia, Latvia and Lithuania.

The entertainment programme is based on active ageing and the activities are aimed at
achieving this goal. The main activities are divided into two groups:

             -   Cultural activities

             -   Sports activities

Hotels in the programme

The hotels included initially in the Pilot Project, and therefore, in this pioneering initiative in
Europe, are the following:

                    Hotels in Andalucía                        Hotels in the Balearic Islands

         Aparthotel Tartessus                               Hotel Comodoro (Majorca)
         Hotel Barceló Costa Ballena                        Hotel Bella Playa (Majorca)
         Hotel Colón Costa Ballena                          Hotel Playa Calamayor (Majorca)
         Hotel Barceló Isla Canela                          Hotel Las Arenas (Majorca)
         Hotel Barceló Isla Cristina                        Hotel Tucan (Majorca)
         Hotel Solvasa Mazagón                              Hotel Barceló Cala Viñas (Majorca)
         Hotel Barceló Punta Umbría                         Hotel Castell de Mar (Majorca)
         Hotel Barceló Punta Umbría Beach                   Hotel Playa Golf (Majorca)
         Hotel Best Benalmádena                             Hotel Flamboyan Caribe (Majorca)
         Hotel Tritón                                       Hotel Barceló Pueblo Park (Majorca)
         Hotel Paraíso                                      Hotel Sunna Park (Majorca)
         Hotel Torreblanca                                  Hotel Delfín Playa
         Hotel El Rincón Andaluz                            Hotel Roc Illetas Playa
         Hotel TRH Mijas                                    Hotel Nàutic
         Hotel Proamar                                      Hotel Delfín Mar
         Hotel Las Palomas                                  Hotel El Cid
         Hotel Pez Espada                                   Hotel El Corso (Ibiza)
         Hotel Patos                                        Hotel Los Molinos (Ibiza)
         Hotel Pierre & Vacances Estepona                   Hotel Argos (Ibiza)
         Hotel El Pinar                                     Aparthotel Floramar (Minorca)
         Hotel Playa Bonita                                 Hotel San Luís (Minorca)
         Hotel Vistamar                                     Hotel Barceló Puebla Menorca



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       Evaluation of the Profitability and Economic impact generated by the Europe Senior Tourism Programme




          Hotel Marbella Playa
          Hotel Playa Bella
          Hotel Marismas Club
          Hotel Puente Real
          Hotel Las Palmeras


         All the hotels in the programme are four stars.

4.2.     Contracting Process

A public tender was published in the official Journal of the European Union on 27 February 2009, to
select the company or companies to organise this Programme. It was not awarded in the end
because no bids were put forward. The companies that were initially interested in getting involved
decided not to take risks because of the uncertainty caused by the economic situation.

Nevertheless, a simplified procedure was launched because we were convinced of the need to
fight the increasing unemployment and seasonality of tourism, and of the possibilities that the
Europe Senior Tourism pilot project offered.

Eight companies were invited to take part in the simplified procedure: Viajes El Corte Inglés, NT
Incoming, Grupo Serhs, Viajes Zoetrope, TUI España, Mundosenior, Iberoservice and
Travelmar, which had declared their interest in taking part in the initiative. The following
companies put forward a bid: Viajes Serhs, Viajes Zoetrope, Eurosenior (Mundosenior) and
Viajes Ekoalfa (Travelmar).

The project was finally awarded to Viajes Zoetrope after a technical assessment. Viajes
Zoetrope and SEGITTUR signed the contract on 3 July 2009.



4.3.     Contracting of the organisation, management and execution of the
         programme

As we described in the previous section, the contracting of the organisation, management and
execution of the Europe Senior Tourism Programme was made by public tender. The corresponding
technical documents establish the structure of the service to be provided. In this sense, the
economic analysis will be based on this structure, with the aim of associating in detail the different
economic impacts according to the subsector benefiting from it. According this, the structure of the
items to be analysed in the calculation of the pricing of the programme is as follows:

         Commercialisation: based on the commercialisation plan carried out

         Air transport

         Transfer at the destination




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        Evaluation of the Profitability and Economic impact generated by the Europe Senior Tourism Programme



          Accommodation

          Activities included

          Travel insurance: the price of the insurance policy taken out




4.4.      Actions carried out to promote and help commercialisation

The public entities Segittur and Turespaña have managing the start-up and establishment of the
project, as well as the actions that have been deemed necessary in order to promote and help
commercialisation.

Some of the most relevant actions are:

    IMAGE AND WEBSITE

Development of the logo and image of the project.

Launch        of    the      institutional       website       with      information       on     the      project
(www.europeseniortourism.eu) in May 2009, translated into 5 languages. Maintenance and
extension of the information and functionalities of the website, commercialising it and translating
the contents into a further 11 languages.

Three databases have been created through the website with the people who have answered
the survey, those who signed up and those who want to receive the newsletter.

    SOCIAL NETWORKS

The Europe Senior Tourism pilot project was promoted on the social networks Facebook and
Twitter. The company in charge of launching this initiative is Sr. Burns.

The aim of this campaign is to get people to sign up to the programme and to get users to
connect with the brand as if it were just another friend in their lists of contacts. This action
complements others because it only enables us to get to part of the target. It does, however,
promote the project and make it known, at a reduced cost.

The Facebook action has two product pages:

    -     Andalusia Senior Class http://www.facebook.com/travelandalusia

    -     Balearic Senior Class http://www.facebook.com/balearicislands

Users can become fans of these two pages and tell others about their experiences, comment on
photos that are uploaded and have access to the app created ad-hoc.




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        Evaluation of the Profitability and Economic impact generated by the Europe Senior Tourism Programme



The campaign has two parts. For the first one, an app, The Best Parents, has been created,
where the seniors' children can take part. They have to upload a photo of their parents and
explain why they think they are the best and why they deserve one of the two free trips that are
going to be given out. The users will vote and the two couples most voted by the users will win a
trip to the Balearic Islands and another to Andalusia. At the end of the trip, their experiences will
be transferred in video format to the other net users through the Facebook pages and the
blogosphere. This first part of the campaign will last about a month (November 2009).

The second part of the campaign aims to procure the direct participation of Europeans over 55 who
can benefit from the features of the programme. They have to say if they have been in Spain or not,
and tell about their experience and the reasons why they want to come, if they do not know the
country yet. Like before, two couples will be able to enjoy a free trip to Spain (December 2009).

    MATERIAL

The following materials have been created to promote the Senior Tourism Europe pilot project:

    ‐     Institutional website: www.europeseniortourism.eu

    ‐     Interactive brochure: http://cde.bluevista.es/1C4a5db98ade965012.cde translated
          into 5 languages

    ‐     Paper brochure (32,500) translated into 11 languages

    ‐     Roll ups for fairs (10)

    ‐     Merchandising: fans (4,000)

    ‐     Posters for agencies (800 in 7 languages)

    ‐     Videos:

          1. Fitur 2009, with two actors and a virtual background.

          2. Group recording: two days of recording and photos of one of the Greek groups
          (October 2009). The material has been used for different MK actions.

          3. Fitur 2010, recording in the two destinations and with groups of tourists (December 2009).

          4. In progress – institutional video on the end of the first edition of the programme.

    COMMUNICATION.

Two channels have been created with the video and photos of the Greek tourists staying in
Punta Umbría, one on Flickr and one on YouTube. The videos have been made using 47 short
clips that show what their visit was like.

With these clips and interviews recorded during the European forum and social tourism in
Malaga, a module has been hired in the Visit Spain section on the international platform News
Market (url: www.thenewsmarket.com/visitspain).




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        Evaluation of the Profitability and Economic impact generated by the Europe Senior Tourism Programme



This platform, which VNEWS distributes in Spain, is a world leader in online multimedia
distribution. It has more than 25,000 TV, internet and printed media subscribed to its contents. It
has been operational since 2002 and it issues reports on hosted multimedia downloading, by
media and by countries. This enables them to get feedback from the scopes they achieve.

For the 1 October – 31 December period, a space equivalent to 5 minutes of video on this
platform has been hired to promote Europe Senior Tourism. The platform issues alerts to the
subscribed media every time a new multimedia set is available. Two alerts have been issued
before 31 December. The aim of all this is to have an impact on TV, internet and printed
magazines through the different distribution channels.

    MEDIA.

The following advertisements have been published in Bayard publications, a company
specialising in senior magazines:

    ‐     Plus in the Belgian edition, in September. More than 174,000 subscribers.

    ‐     Plus in the Dutch edition, in September. More than 310,000 subscribers.

    ‐     Notre Temp in France, in October. More than 900,000 subscribers.

The publication of infomercials, interviews or advertisements in other publications has been
planned together with the Spanish Tourist Offices. As well as sending a press release with
information on the project in the Tourist Office newsletter, amongst others, materials on the
project have been included when sending any kind of information from the Offices.

    DIRECT MARKETING

An e-mail marketing action has been carried in Italy, Netherlands, Ireland, Belgium, Portugal
and Austria. 738,430 e-mails were sent in total.

    FAIRS.

          Specialised fairs: Attendance with own stand to Utrecht in September, Lille in October,
          Brussels in November and Vienna in January.

          Tourism fairs: A special action is planned for FITUR 2010, as well as presence in
          tourism fairs in other countries within the programme, in collaboration with Turespaña.

    INSTITUTIONAL VISITS.

    Poland November 2009

    The Secretary of State for Tourism met with the Polish Under-secretary for Tourism and
    gave a presentation before the media and local tour operators and agencies.

    Italy/Austria January 2010

    The president of SEGITTUR travelled to Milan and Vienna to have an interview with the
    local tour operators that sell the product, and to speak to the press.



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  Evaluation of the Profitability and Economic impact generated by the Europe Senior Tourism Programme



Bergamo April 2010

The president of SEGITTUR gave a presentation of the Europe Senior Tourism project
before the representatives of the Italian tourism group GBT and the CISL trade union, an
organisation connected to the tourism group. Representatives from the Spanish trade
unions CCOO and UGT accompanied him, as well as the director of Zoetrope and part of
his team with the aim of signing an agreement to bring about 4,500 Italian tourists next
winter through this organisation.

FORUMS.

European Commission

Six forums took place during the development of the Calypso Preparatory Action on Social
Tourism of the European Commission. The first was organised by SEGITTUR, BITS
(Bureau International du Tourisme Social) and the EC took place in Malaga, from 15 to 17
October 2009.

Segittur participated in Warsaw (November), Toulouse (November), Rome (March),
Brussels (March) and it plans to attend the one in Romania (May 2010).

In June the main Calypso event will take place in Palma de Mallorca with the presentation
of the study results that the EC conducts on social tourism. It is scheduled to take place on
10 and 11 June.

Calypso

SEGITTUR also participates in the Calypso work group which is made up of representatives
of social tourism entities.

BITS

SEGITTUR also collaborated with BITS, a company that brings together international
associations and institutions that work in social tourism, and which are promoting the
Europe Senior Tourism project pilot.

Best Britain & Ireland (London, March 2010)

Presentation of the project in the Best Britain & Ireland fair invited by the social tourism
association Family Holiday Association.

An informative meeting was also held with Gordon Marsden, a British Member of
Parliament.




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  Evaluation of the Profitability and Economic impact generated by the Europe Senior Tourism Programme



ONETE Forum (Madrid, March 2010)

The Europe Senior Tourism project was presented in the 12th Onete Forum, the
Association of the Foreign National Office in Spain, dedicated to Social Tourism.

Assigned budget.

According to information provided by Segittur, one million euros have been budgeted for the
financing of a group of actions to support commercialisation, as well as for costs arising
from the initial management of the programme, and Turespaña has taken charge of it.




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        Evaluation of the Profitability and Economic impact generated by the Europe Senior Tourism Programme




5. Definition of the methodology model
5.1.      Introduction

The estimation of the economic impact of the Europe Senior Tourism pilot programme is based
on the calculation methodology proposal normally used in the Economic Impact of the Senior
Holiday Programme of IMSERSO report (carried out by PWC), because it is an accepted
methodology accepted after the Programme's wide experience. The aim is to define and
quantify, mainly, the economic activity generated in the tourism sector at the destination and
origin, and associated with tourist expenses generated directly by the programme.

This methodology alternative does not initially consider the macroeconomic effects that can be
generated, taking into account the possible effects or impacts on secondary sectors associated with
larger tourist activity operation, as well as on income and the jobs that arise from the Programme.

Although alternative estimation economic models have been studied, taking into account the
indirect and induced impacts on local economies, with the aim of better defining the possible
real impact of the Programme, the final decision is not to include them in this study in order to
avoid over-estimations and wrong calculations.

In any case, the model initially taken as reference has been enriched, with the aim of adapting
to the requirements of the present project, based on the knowledge of the reality of the sector of
the InnovaManagement team and the conclusions drawn from the study of different statistical
bases and sector studies.

The main methodological characteristics for the following analysis items are described below:

    -     Economic impact: it is fundamentally considered to be the economic activity generated
          by the direct impact of the amount spent by the tourists. Their expenses include two
          items: price of the tourist package (including the planned subsidy for the programme)
          and expenses of the tourist at the destination.

    -     Generated jobs: the direct jobs generated in the different subsectors are evaluated, as a
          consequence of the economic activity estimated in the previous section.

    -     Return on investment: relation between the payments made by the Spanish
          Administration and the income obtained from direct and indirect economic activity
          generated by the programme.




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       Evaluation of the Profitability and Economic impact generated by the Europe Senior Tourism Programme




5.2.     Economic impact and activity.

The direct economic impact or economic activity generated by the programme is calculated
fundamentally from two items:

         Expenses arising from purchasing the tourist package

         Direct expenses of the tourist at the destination

Then, a definition and detailed analysis of each of these items is made:

         The estimation of the direct economic impact generated by the purchase of the package
         includes the following suppositions:

         o    The total value of the programme is obtained as the result from the volume and the
              users of the programme (45,000 users estimated) and the average price of the
              package. The average value of the programme is obtained by adding to the price
              paid by the user the subsidy for the programme, which is 100 or 150 euros,
              according to the country of origin.

         o    The value of the package is distributed amongst the different branches of activity,
              based on the estimated pricing of the package.

              In order to carry out an analysis that is rigorous enough of the economic impact, it is
              necessary to estimate the distribution of the different expenses items, depending on
              whether the impact is on the origin or the destination. We are working assuming
              that the items that impact on the origin are:

                  100% of the charges/commercialisation expenses are paid by travel agencies at
                   the origin

                  It is estimated that 80% of the air transport costs are for non Spanish airlines

              The impact of the other items is on the destination.

         The estimation of the direct economic impact generated by tourists' expenses at the
         destination is based on the following suppositions:

         o    Taking the criteria applied in the study of the economic impact of the IMSERSO
              Programme as a reference, and because of its similarities to this programme, the
              expenses at the destination of an average tourist, including complementary
              activities and shopping, accounts for 80-100% of the price of a tourist package paid
              at the origin (price per user).

              Nevertheless, if we are conservative and in order not to over-estimate this impact of
              the Programme, we have assumed that the expenses at the destination account for
              75% of the total price of the tourist package paid by the travellers.

         o    The total price of the expenses at the destination is distributed, based on the pricing
              that is defined, amongst the items mentioned above.

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Evaluation of the Profitability and Economic impact generated by the Europe Senior Tourism Programme



  o    The items considered in the expenses items at the destination are:

                              Purchased personal equipment

                              Purchases that are directly related to the trip

                              Telephone calls, postcards and letters

                              Drinks at hotels, bars, restaurants and cafés

                              Traditional produce and gifts

                              Cultural and leisure activities

  The calculation that is inferred from the description above is presented in the following table:

                 Evaluation of average expenses at the destination

          Average price per user (VAT included)                             374.01
          % of expenses at the destination of the net
          price                                                                75%
          Average expenses at the destination per stay                      280.51
          Average expenses at the destination per
          overnight stay                                                      34.02


  The average price of 34 euros per stay is the same as the value obtained from the
  analysis of the surveys on expenses at the destination conducted with the programme
  users. Although the survey methodology does not guarantee a minimal sampling error,
  the size of the sample is enough to contrast the hypothesis we are working on.




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       Evaluation of the Profitability and Economic impact generated by the Europe Senior Tourism Programme




5.3.     Generated jobs

The generation of employment is one of the core priorities of the programme and a key variable
when evaluating whether the objectives of the programme have been fulfilled. The jobs
generated are the consequence of the economic activity of the jobs.

This analysis only mentions the calculation of the direct employment that the seven months of
the Programme generated at the destination, and does not consider the employment induced as
a consequence of the economic activity: The employment generated has been estimated
according to the following:

         Use of the “stays per day/new job” ratio to estimate the employment generated in the
         hotel and catering sector. A ratio of 6 stays per job has been applied. This ratio is
         considered conservative taking into account the 6.1 ratio used in the Economic Impact
         of the IMSERSO Programme study. The adjustment has been made because the hotels
         in the programme are 4 stars.

         Based on the estimation of the volume of hotel and catering employment, the
         employment generated in the rest of tourist sectors is extrapolated, using the Spanish
         Tourism Satellite Account.

         Based on the specific characteristics of the Programme and with the aim of not over-
         calculating the generated employment, several items have been calculated under their
         real value.

         Based on the estimation of direct employment generated by the Programme, the labour
         cost of these positions is calculated. This cost can be interpreted as the value added by
         the production of the different tourist services.




5.4.     Return on investment for the Government

In order to assess amount obtained from taxes and, therefore, to estimate the profitability of the
Programme, the following elements have been considered:

         Social Security (SS) payments based on the jobs estimated

         Income from saving on unemployment based on the volume of estimated jobs

         Income from income tax, based on the volume of estimated jobs

         Income from VAT, based on the Added Value of the Programme (production – labour costs)

         Income from company tax (IS)

         The investment means the subsidies for users (average amount x volume of users), as
         well as the investment in the payment of insurance




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       Evaluation of the Profitability and Economic impact generated by the Europe Senior Tourism Programme




6. Estimation of the distribution of the volume of users
6.1.     Estimation of users

This section presents the total volume of users, as well as the distribution of this volume
according to the origin, destination and duration of the stay. In order to estimate the distribution
of the users, the following suppositions have been considered:

         The estimation of the total volume of users of the Programme was about 45,000 users
         during the 7 months of the Programme. This volume has been confirmed based on the
         forecasts made by Viajes Zoetrope, S.A.

         Initially, the plan was to reach 50,000 users by the end of April. However, because of
         the air traffic problems in Europe due to the eruption of the volcano in Iceland that
         month, there was a high volume of cancellations: about 6,100 users, according to the
         data from Zoetrope.

         The calculations are based on the Forecast of Users on the date of the end of the
         Programme, supplied by Segittur. These forecasts are for the distribution of users per
         origin and destination.

         In order to establish the distribution of the total volume of users according to the origin,
         destination and duration of the stay, the distribution at the end of the programme has
         been taken into account.

The following tables include information that identifies users of the programme according to:
their origin and therefore the subsidy they received, destination and duration of the stay:

                      Estimation of users per destination and typology of subsidy

                                                                Balearic
                                               Andalusia                           Total
                                                                Islands
                    150 Subsidy                   6,281          1,447             7,729

                    100 Subsidy                  31,281           5,990            37,271

                    Total                        37,563           7,437            45,000
          Source: Estimation based on data provided by the concessionaire company Viajes Zoetrope S.A.




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      Evaluation of the Profitability and Economic impact generated by the Europe Senior Tourism Programme



                  Estimation of the volume of users per nationality and destination

                                                                   Balearic
                      Users per origin        Andalusia                               TOTAL
                                                                   Islands
                   150 SUBSIDY
                   COUNTRIES                        6,281               1,447                7,729

                   Slovakia                             24                    22               47

                   Poland                           5,811               1,291                7,102

                   Czech Republic                     446                 134                 580

                   100 SUBSIDY
                   COUNTRIES                       31,281               5,990               37,271

                   Austria                            297                 230                 527

                   Belgium                            250                     37              287

                   Bulgaria                           794                 730                1,524

                   Denmark                            895                 425                1,320

                   France                                0                220                 220

                   Greece                          14,194               1,276               15,470

                   Netherlands                      1,861                 215                2,076

                   Ireland                          5,219                 435                5,655

                   Italy                            4,590                 946                5,536

                   Portugal                           524                 119                 643

                   Romania                          2,657               1,355                4,012

                   TOTAL                           37,563               7,437               45,000

         Source: Estimation based on data provided by the concessionaire company Viajes Zoetrope S.A.

              Estimation of users according to the duration of the stay and destination

                                                            Balearic
                                       Andalusia                                   Total
                                                            Islands
                                         31,771              6,885                 38,657
                           8 DAYS
                                          4,627               514                  5,140
                           15 DAYS
                                           712                38                    750
                           22 DAYS
                                           453                 0                    453
                           29 DAYS
                                         37,563              7,437                 45,000
                           TOTAL
         Source: Estimation based on data provided by the concessionaire company Viajes Zoetrope S.A.




Although the data available do not currently enable us to use more than two variables, based on
the tables above, the amount of users has been estimated according to the subsidy, the
destination and the duration of the stay. This detail enables the adjustment of the calculations to
the maximum amount.




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       Evaluation of the Profitability and Economic impact generated by the Europe Senior Tourism Programme



     Estimation of users according to the destination, type of subsidy and duration of the stay

                                       Andalusia                                     Balearic Islands
     Duration of
    the package                                                                                           150
                         Total       100 Subsidy       150 Subsidy      Total         100 Subsidy
                                                                                                        Subsidy
   8 DAYS                 31,771            26,459              5,313     6,885             5,545           1,340

   15 DAYS                  4,627             3,853              774         514               414           100

   22 DAYS                    712               593              119          38                31             7

   29 DAYS                    453               377               76             0               0             0

   Total                  37,563            31,281              6,281     7,437             5,990           1,447
         Source: own estimation based on data provided by the concessionaire company Viajes Zoetrope S.A.

Based on the volume of users and the duration of the stay, the destinations (autonomous
regions) can be compared based on the overnight stays generated by the programme. In this
sense, as the following table shows, we get these results:

           85% of overnight stays were in Andalusia.

           The largest number of overnight stays is for stays of 8 days (7 overnight stays).

           The average is 8.25 overnight stays.

       Estimation of the volume of overnight stays per destination and the duration of the stay.


                                                                  Balearic
                            Duration            Andalusia                              Total
                                                                  Islands
                    8 days/7 nights                   222,400           48,197           270,597

                    15 days/14 nights                  64,772            7,190            71,962

                    22 days/21 nights                  14,947              799            15,746

                    29 days/28 nights                  12,683                0            12,683

                    Total                             314,803           56,186           370,988

            Source: Estimation based on data provided by the concessionaire company Viajes Zoetrope S.A.




6.2.       Level of satisfaction with the experience

In order to check the satisfaction of the users with their trips, a series of short surveys were
carried out at the destination. Amongst the main questions, the travellers were asked about the
quality/price ratio of the tourist package.

As the following table shows, on a scale of 1 (very dissatisfied) to 10 (extremely satisfied), the
average results per country of origin range from 8.2 to 9.8. The average opinion of the users who
answered the survey was 9 to 10, which shows that they were highly satisfied with the experience.




                                                         26
Evaluation of the Profitability and Economic impact generated by the Europe Senior Tourism Programme




                                                 Quality/price ratio
                                 Country
                                                     (1 to 10)
                         Czech Republic                    8.9
                         Denmark                           9.3
                         Bulgaria                          9.2
                         Portugal                          8.8
                         Ireland                           9.3
                         Belgium
                         Poland                            8.2
                         Romania                           9.8
                         Italy                             8.8
                         Austria                           9.8
                         France
                         Netherlands                       8.2
                         Greece                            8.9
                         Average total                     9.0




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      Evaluation of the Profitability and Economic impact generated by the Europe Senior Tourism Programme




7. Tourist package pricing
The data provided by the service provider Zoetrope have been used to estimate the pricing of
the tourist packages in the Programme. However, and because these data do not represent the
average of the different types of packages commercialised, the initial pricing provided by travel
agencies has been adjusted following these criteria:

        The pricing provided by Zoetrope is for the 8-day tourist package and it offers a 100
        euro subsidy. This pricing did not include the "other costs" item (which includes items
        such as: promotion, programme administration, computer applications, etc.).

        Based on the information available, adjustments have been made in order to:

             o   Include the "other costs" item in the pricing.

             o   Establish the average pricing of different tourist package typologies.

        The resulting pricing establishes a difference between the percentage of expenses with
        impact on the origin and the destination, for each one of the items included in the package.

Based on the aforementioned, the table below shows the average distribution of the value of the
tourist package in connection with the different services offered:

                                Pricing estimation for the tourist package

                                                   % of the total
                         Item                      Programme               Origin        Destination
                                                       Cost
         Accommodation                                45.3%                                 45.3%

         Total hotel and catering                       45.3%                               45.3%

         Road transport                                  2.1%                                2.1%

         Air transport                                  35.0%               28.2%            6.8%

         Total transport                                37.1%               28.2%            8.9%

         Commercialisation                               6.3%               6.3%             0.0%

         Organised excursions                            2.1%                                2.1%

         Entertainment and assistance                    1.3%                                1.3%

         Other costs (1)                                 5.9%               0.5%             5.4%

         Other services                                  9.3%                                8.8%

         Insurance policy                                2.0%                                2.0%

         TOTAL PROGRAMME COST                          100.0%               35.0%           65.0%
         (1) Includes promotion costs, Programme administration, financial costs, development and
         maintenance of computer applications costs, etc.
                                  Source: own table based on different sources.




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      Evaluation of the Profitability and Economic impact generated by the Europe Senior Tourism Programme



        Accommodation and air transport costs are the main items.
        65% of the cost of the tourist package takes place at the destination.
        The items with an impact on the origin are commercialisation, air transport (most airlines
        used are not Spanish) and the promotion actions carried out at the origin and included
        in the "other costs" item.

Based on the structure of the services established in the contracting proposal by Segittur, the
details and characteristics of each one of the items included in the pricing of the tourist package
are detailed below. The services that have been offered in the Programme in the end have been
considered for this pricing (this section will be extended with a larger description of the
characteristics of each item when the concessionaire company provides us with the
corresponding full information):

        Commercialisation: based on the commercialisation plan carried out.

        Air transport: international companies (i.e. not Spanish) have been used mainly,
        because there are not many flights to or from the destinations and the main international
        airports in some of the countries of origin. According to Zoetrope sources, the
        programme has been based mainly on European airlines, as well as charter companies.
        Some of these airlines have been Air Berlin and its group (a German company), Aer
        Lingus and Ryanair (Irish), Vueling (Spanish), Blue Air (Romanian) and LOT (Polish).

        Although the price of the tickets varies from one country of origin to another, the
        calculation of the cost in the Programme reflects an average price per user.

        Transfer at the destination: the transfer from the airport to the hotel on the day of arrival,
        at the destination, and later on from the hotel to the airport on the day of departure.
        According to information provided by Zoetrope, the vehicles used have ranged from for
        1-4 people cars to coaches, for groups in all destinations. Several companies have
        been hired at each destination.

        Accommodation (full board): four-star hotels. The price is the same in all destinations.

        Activities included: the price of the stay includes two excursions. This price is for
        transport costs by road plus assistance (guide) who is in charge of dealing with any
        problems that may arise.

        Travel insurance: the price of the insurance policy taken out. This policy must cover the
        following:

              o Cancellation of trip

              o Transfers to hospitals

              o Transfer for health reasons

              o Return and stay of person accompanying in case of illness or accident

              o Transport to the hotel for the accompanying person.

                                                       29
      Evaluation of the Profitability and Economic impact generated by the Europe Senior Tourism Programme



              o Transport and stay of a family member to accompany the policyholder in hospital

              o Medical expenses

              o Extension of stay in a hotel in case of illness or accident

              o Transportation of body in the event of death

              o Transport for the accompanying person in the event of death of the policyholder

              o Reimbursement of holiday not taken

              o Accident insurance whilst travelling

              o Compensations

              o Etc.

         According to the concessionaire company, the cost of the policy has reached 400,000
         euros for the full coverage of the Programme, regardless of the number of users. It has
         been paid in advance.



Finally, the following items are considered costs of the programme and are included in the
"other costs" item:

                 Programme promotion expenses: estimation of the promotion costs separating
                 expenses (promotions) at the destination from those at the origin.
                 Costs of development or adaptation of the computer platform: description of the
                 programme        required     to   commercialise       and    manage       the   programme.
                 Development and maintenance costs.
                 Financial costs.
                 Administration costs: estimation of the costs arising from carrying out the
                 administration of the Programme.




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      Evaluation of the Profitability and Economic impact generated by the Europe Senior Tourism Programme



Based on the information provided by Zoetrope, this item includes the following:

                          Other Costs Items                        Sub-item

                                                     Publications at the origin
                                                     Travel expenses at the origin
                     Promotion
                                                     Travel expenses at the
                                                     destination
                                                     B2B and B2C management
                                                     programme
                     Development of computer
                     platform                        Web site in 6 languages
                                                     Maintenance
                                                     Bank charges
                     Financial expenses              Credit card charges
                                                     Financial interest
                                                     Centre staff costs
                     Administration costs
                                                     Destination staff costs


        It is estimated that the impact at the origin accounts for 10% of the item, because of the
        promotion efforts carried out.




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      Evaluation of the Profitability and Economic impact generated by the Europe Senior Tourism Programme




8. Pricing of additional expenses at the destination
The pricing of the additional average expenses at the destination has been estimated based on
surveys conducted for that purpose, as well as on data retrieved from case studies similar to
this Programme.

The distribution of additional expenses at the destination can be seen on the following table:

                                                                              % of total
                                                                             additional
                                         Item
                                                                           expenses at the
                                                                             destination
                Drinks at hotels, bars and cafés                                    30.5%
                Hotel and catering                                                  30.5%
                Excursions by the service provider                                    0.2%
                Free excursions at the destination                                    2.1%
                Excursions                                                            2.3%
                Purchased personal equipment                                        17.9%
                Traditional produce and gifts                                       33.8%
                Shops                                                               51.7%
                Telephone calls, postcards and letters                                3.5%
                Cultural and leisure activities                                       9.5%
                Other                                                                 2.5%
                Other expenses                                                      15.5%
                TOTAL EXPENSES AT THE DESTINATION                                  100.0%
                                  Source: own table based on different sources.




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                 Evaluation of the Profitability and Economic impact generated by the Europe Senior Tourism Programme




          9. Average value of the tourist package
          Finally, before starting the calculation of the impact of the Programme, the estimation of some
          of the reference parameters in this calculation is included:

                   Net price per user: the price paid by the end user excluding the VAT paid in the country
                   of origin.

                   Net value of the Package: the corresponding government subsidy must be added to the
                   net price per user, based on the user's origin.

                   The net value of the package, based on the different typologies of existing packages
                   and on the effective users of each of them, enables the calculation of the average value
                   of the package, which is the starting point for the following calculations.

                                                           Price per                                                Net value
                                 Balearic                               VAT origin       Net price                               Gross
 Subsidy 150      Andalusia                    TOTAL          user                                      Subsidy      of the
                                 Islands                                   (1)           per user                                value
                                                            (gross)                                                 package
TOTAL                   6,281         1,447        7,729

8 DAYS                  5,313         1,340        6,653         343          20.0%             274           150         424      493

15 DAYS                   774           100          874         488          20.0%              390          150         540      638

22 DAYS                   119              7         126         668          20.0%              534          150         684      818

29 DAYS                     76             0          76         829          20.0%              663          150         813      979

                                                           Price per                                                Net value
                                 Balearic                               VAT origin       Net price                               Gross
 Subsidy 100      Andalusia                    TOTAL          user                                      Subsidy      of the
                                 Islands                                   (1)           per user                                value
                                                            (gross)                                                 package
TOTAL                  31,281         5,990      37,271

8 DAYS                 26,459         5,545      32,004          365          20.0%             292           100         392      465

15 DAYS                 3,853           414        4,267         524          20.0%             419           100         519      624

22 DAYS                   593            31          623         700          20.0%              560          100         660      800

29 DAYS                   377              0         377         855          20.0%              684          100         784      955

Total users            37,563         7,437      45,000 Average per user                         312      109           420       498
          (1) Normal average VAT rate according to the origin of the travellers. Own table based on different sources. See VAT
          table appendix 1.


          Based on the previous table and as a summary, the following table includes some of the initial
          parameters on which the calculation of the economic impact is based:

                                                           Base Details
                            Volume of Users                                                    45,000.00
                            Gross average value of the package (VAT
                            included):                                                             498.18
                            Average value of the package (VAT excluded):                           420.26
                            % of the average VAT applied                                             20.0%
                            Average user price (euros)                                             374.01
                            Average Stay (overnight)                                                   8.25
                            Volume of overnight stays                                         370,988.13


                                                                   33
Evaluation of the Profitability and Economic impact generated by the Europe Senior Tourism Programme



  Volume of users based on the forecasts made based on the effective data from Zoetrope
  Gross value of the package (price per user + subsidy)
  Average net value of the package, excluding the VAT paid at the origin
  % of average VAT applied (VAT paid at the origin)
  Average price per user
  Average stay (overnight)
  Stays overnight (volume of users x average stay)




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       Evaluation of the Profitability and Economic impact generated by the Europe Senior Tourism Programme




10. Economic impact of the Programme
10.1. Direct impact of buying the package

         In this section only the cost of the tourist package is considered.

         The price of the impact is estimated based on the volume of users and the average
         value of the package (VAT excluded).

         The direct impact of buying the package is almost 19 million euros.

                                                                                         Average package
                                                   Euros                  Users          value
  TOTAL INCOME
                                              18,911,569.26               45,000                    420.26
  TOURIST PACKAGE


         By applying the pricing of the defined tourist package, we obtain the distribution of the
         income from the tourist package for each branch of activity.

         The application of the pricing also enables to differentiate between the effect at the
         origin and at the destination.

                         Estimation of the direct impact of the package per activity

                                                   Income per
                  Item                                                          Origin                Destination
                                                   subsector
Accommodation                                       8,566,940.88                                      8,566,940.88
Total hotel and catering                            8,566,940.88                                      8,566,940.88
Road transport                                       397,142.95                                         397,142.95
Air transport                                       6,619,049.24             5,333,062.53             1,285,986.71
Total transport                                     7,016,192.20                                      1,683,129.66
Commercialisation                                   1,191,428.86             1,191,428.86                      -
Organised excursions                                 397,142.95                                         397,142.95
Entertainment and assistance                         245,850.40                                         245,850.40
Other costs (1)                                     1,115,782.59               102,122.47             1,013,660.11
Other services                                      1,758,775.94                                      1,656,653.47
Insurance policy (2)                                 378,231.39                                         378,231.39
TOTAL PROGRAMME COST                               18,911,569.26             6,626,613.87            12,284,955.39
(1) Includes promotion costs, Programme administration, financial costs, development and maintenance of computer
applications costs, etc.
(2) The insurance policy for which Zoetrope paid 400,000 euros in advance. Source: Zoetrope.
Note: there may be slight differences in the overall values due to the adjustment of decimals in the pricing.



                                     Source: own table based on different sources.




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           Evaluation of the Profitability and Economic impact generated by the Europe Senior Tourism Programme



              In order to obtain the direct impact at the destination we exclude the amounts equivalent
              to the payment of VAT at the destination.

                          Estimation of the net direct impact of the package at the destination


                                              Direct activity at                         Income from    Direct impact at
                  Item                                                 VAT rate
                                                                                             VAT        the destination
                                              the destination

Accommodation (tourist package)                  8,566,940.88             7%             560,454.08      8,006,486.80

Total hotel and catering                         8,566,940.88

Road transport                                    397,142.95              7%             25,981.31        371,161.64

Air transport                                    1,285,986.71             7%             84,129.97       1,201,856.74

Total transport                                  1,683,129.66

Commercialisation                                       -                16%                  -                    -

Package organised excursions                      397,142.95

Entertainment and assistance                      245,850.40

Other costs (1)                                  1,013,660.11

Other services                                   1,656,653.47            16%             228,503.93      1,428,149.54

Insurance policy (2)                              378,231.39                                  -           378,231.39

TOTAL PROGRAMME COST                            12,284,955.39                            899,069.29     11,385,886.10
(1) Includes promotion costs, Programme administration, financial costs, development and maintenance of computer
applications costs, etc.
(2) Not subject to VAT.
                                         Source: own table based on different sources.



              Based on the calculation, the net direct impact at the destination of buying the
              package is almost 11.4 million euros.


     10.2. Direct impact per expense at the destination

              The estimation is that the expenses account for 75% of the price paid by the end user at
              the origin.



                            Average price per user (VAT included)                    374.01

                            Volume of users                                          45,000

                            Total price per user at the origin                  16,830,210.06

                            75% of the price per user at the origin             12,622,657.54


    Taking into account the base data in the table above, as well as the pricing of the expenses at the
    destination defined in section 8, we obtain the distribution of the income for each branch of activity:




                                                              36
          Evaluation of the Profitability and Economic impact generated by the Europe Senior Tourism Programme



         Estimation of the additional expenses at the destination for each activity (gross amount)

                                                                                          Distribution of
                                                                         Distribution of
                                                      Income per each the expenses at    the expenses at
                      Item                            item of expenses                    the destination
                                                                         the destination
                                                      at the destination                 per activity and
                                                                           per activity
                                                                                                day
                                                          3,849,910.55                85.55                 10.38
Drinks at hotels, bars and cafés
                                                          3,849,910.55                85.55                 10.38
Hotel and catering
                                                            21,458.52                  0.48                 0.06
Excursions by the service provider
                                                           265,075.81                  5.89                 0.71
Free excursions at the destination
                                                           286,534.33                  6.37                 0.77
Excursions
                                                          2,259,455.70                50.21                 6.09
Purchased personal equipment
                                                          4,266,458.25                94.81                 11.51
Traditional produce and gifts
                                                          6,525,913.95                145.02                17.60
Shops
                                                           441,793.01                  9.82                 1.19
Telephone calls, postcards and letters
                                                          1,199,152.47                26.65                 3.23
Cultural and leisure activities
                                                           315,566.44                  7.01                 0.85
Other
                                                          1,956,511.92                43.48                 5.28
Other expenses
TOTAL EXPENSES AT THE                                    12,622,657.54                280.51                34.02
DESTINATION
                                      Source: own table based on different sources.



   From these data we obtain:
            Average expenses per overnight stay: 34.02 euros.
            Average expenses per traveller: 280.51 euros.




                                                           37
                 Evaluation of the Profitability and Economic impact generated by the Europe Senior Tourism Programme




          10.3. Total impact at the destination

                   By adding up the direct impact at the destination and the induced impact (both of them
                   gross), and classifying every amount according to the branch of activity to which it
                   belongs, we obtain:

                              Estimation of the net economic direct impact at the destination.


                                                     Economic activity                        Income from         Total net impact at
                       Item                                            VAT rate
                                                                                                  VAT              the destination
                                                        generated

Accommodation (tourist package)                          8,566,940.88             7%           560,454.08            8,006,486.80

Drinks at hotels, bars and cafés                         3,849,910.55             7%           251,863.31            3,598,047.24

Total hotel and catering                                12,416,851.43                                               11,604,534.04

Road transport                                            397,142.95              7%            25,981.31             371,161.64

Air transport                                            1,285,986.71             7%            84,129.97            1,201,856.74

Total transport                                          1,683,129.66                                                1,573,018.38

Commercialisation at the destination                             -                16%                -                       -

Package organised excursions                              397,142.95              16%           54,778.34             342,364.62

Additional excursions                                     286,534.33              16%           39,521.98             247,012.35

Total excursions                                          683,677.28              16%           94,300.31             589,376.97

Entertainment and assistance                              245,850.40              16%           33,910.40             211,940.00

Other costs (1)                                          1,013,660.11             16%          139,815.19             873,844.92

Shops                                                    6,525,913.95             16%          900,126.06            5,625,787.89

Other expenses at the destination                        1,956,511.92             16%          269,863.71            1,686,648.21

Other services                                           9,741,936.38             16%         1,558,709.82           8,398,221.02

Insurance policies                                        378,231.39                                 -                378,231.39

TOTAL IMPACT AT THE DESTINATION                         24,903,826.14                         1,653,010.14          22,543,381.79
(1) The costs of promotion, Programme administration, financial costs, development and maintenance of computer applications costs, etc.
                                            Source: own table based on different sources.




                                                                     38
                   Evaluation of the Profitability and Economic impact generated by the Europe Senior Tourism Programme




           11. Direct employment generated
           As we mentioned in the previous section, the calculation of the direct employment that the
           seven months of the Programme generated at the destination is based on:

                     Use of the “stays/new job” ratio to estimate the employment generated in the hotel and
                      catering sector.

                     A ratio of 6 stays per day per employee has been applied.

                   Volume of overnight stays                                                                 370,988.13

                   Duration of the Programme in days (7 months):                                                         210

                   Total stays per day (overnight stays/210 days)                                                1,766.61

                   Day/employee stays ratio:                                                                          6.00

                   Jobs generated in the hotel and catering sector                                                         294



                     Based on the estimation of the volume of hotel and catering employment, the
                      employment generated in the rest of tourist sectors is extrapolated, using the Spanish
                      Tourism Satellite Account.

                     Because of the specific characteristics of the Programme and with the aim of not over-
                      calculating the generated employment, several items have been calculated under their
                      real value.

                                                                        Number of jobs                          Adjusted         Estimation of
                       Branch of activity                               (thousands of           Index          index (see         direct jobs
                                                                         positions) (3)                           note)           generated
Hotels and similar                                                           324.0              100.0              100                294

Restaurants and similar                                                    1,120.2              346.0               53               156

Transport of travellers by road                                              182.2               56.0               12                35

Train transport                                                              18.4                6.0                 -                 -

Sea transport                                                                 2.9                1.0                 -                 -

Air transport                                                                39.0                12.0                5                15

Travel agencies                                                              57.9                18.0               15                44

Vehicle rental                                                               25.5                8.0                 5                15

Cultural, leisure and sports activities                                      377.8              117.0               17                50

TOTAL typical tourist branches of activity                                 2,709.9              836.0             207.0              609

NOTE:
(1) Restaurants and similar: Items that are services – accommodation and catering – which are included in the price of the tourist package
have been adjusted under their real value. It is considered a residual item of 25% of the volume of jobs associated with these branches of
activity.
(2) Train and sea transport: eliminated items because these types of transport are not included.
(3)   Data taken from the 2007 Spanish Tourism Satellite Account.
(4)   Air transport: Items adjusted under their real value because the impact of this item mainly happens at the origin.
(5) Cultural activities: item adjusted under their real value.
                        Source: own table based on different sources.


                                                                        39
    Evaluation of the Profitability and Economic impact generated by the Europe Senior Tourism Programme



       Finally, based on the estimation of direct employment generated by the Programme, the
       work cost of these positions is calculated. This cost can be interpreted as the value
       added by the production of the different tourist services.

         Estimation of the work cost of direct employment generated by the Programme

                                                      Employee cost 1
        Activity             Generated jobs                                       New staff cost   Cost/income
                                                        month(1)
Hotels and restaurants               450                  1,750                     5,519,315.6      44.5%

Land transport                        35                      1,940                  479,794.8       80.5%

Air transport                         15                      4,128                  425,450.0       33.1%

Travel agencies (2)                   44                      1,832                  566,254.1       55.9%

Other (3)                             65                      1,782                  807,838.1       41.3%

TOTAL                                609                                            7,798,652.7      31.3%
(1) Data taken from the PWC report, updated by RPI (Retail Price Index).
(2) It considers the "other costs" item, which includes: administration costs, promotion of the programme and
development and maintenance of computer applications, as well as staff costs of the travel agencies at the
destination.
(3) Items associated with commerce (shopping at the destination) and administration costs, promotion of the
programme and development and maintenance of computer applications are excluded.
It takes into account the jobs generated in cultural and leisure activities, and vehicle rental.
                                    Source: own table based on different sources.




                                                           40
         Evaluation of the Profitability and Economic impact generated by the Europe Senior Tourism Programme




 12. Income, return on investment and assessment of
     profitability
 12.1. Estimation of income for the Spanish Government

 In order to assess the income obtained by the Spanish Government from taxes and, based on
 this, to estimate the profitability of the Programme, the following items have been considered:

 Income per item

            Social security

 Based on the volume of direct jobs generated, as well as the contributions per branch of activity
 (which are included in the following table), we calculate the income from Social Security:

                                          Estimation of Social Security income

                                  Generated            % SS           1 month salary           Company               Total income
         Activity
                                    jobs              payment              (1)                   cost                   from SS
Hotels and restaurants               450               29.7%             1,350.0                1,750.3               1,262,226.8

Land transport                         35              32.4%              1,465.8                1,939.9              117,275.1

Air transport                          15              32.8%              3,108.3                4,128.5              105,129.3

Travel agencies                        44              29.3%              1,416.7                1,831.6              128,282.0

Other (*)                              65              29.3%              1,378.0                1,781.6              183,011.7

TOTAL                                 609                                                                            1,795,924.9

(1) Data taken from the PWC report, updated by RPI (Retail Price Index).
(*) Includes cultural activities and vehicle rental. Contributions relating to administration activities are used.



                         Table of SS contributions according to each branch of activity

                                            Company SS                                Employee SS              Total SS
                  Activity                                          Accidents
                                             payment                                    payment                Payment
      Hotels and restaurants                        23.6%                1.35%                  4.7%            29.65%
      Hotel guides                                  23.6%                4.05%                  4.7%            32.35%
      Road transport                                23.6%                4.05%                  4.7%            32.35%
      Air transport                                 23.6%             4.52% (1)                 4.7%            32.82%
      Road guides                                   23.6%                4.05%                  4.7%            32.35%
      Travel agencies                               23.6%                0.99%                  4.7%            29.29%
      Doctors and nurses                            23.6%                3.60%                  4.7%            31.90%
      Operations and
      administrators                                23.6%                0.99%                  4.7%            29.29%
      Travel insurance                              23.6%                0.99%                  4.7%            29.29%
      (1) Average contribution obtained from ground and air staff.




                                                                 41
       Evaluation of the Profitability and Economic impact generated by the Europe Senior Tourism Programme



          Subsidies for saving on unemployment

It is based on the idea that the jobs generated or maintained by the Programme would
disappear if the Programme did not exist, so the Government would have to pay for the
unemployment contributions or subsidies of an equivalent number of workers.

Unemployment benefits

According to the regulations on unemployment benefits, the elements and variables that we use
to calculate the benefits and subsidies are:

Basis for calculation

The basis for calculation of each worker (average of the bases for Accidents at work and
Professional illnesses, for which they have contributed during 180 days before the legal
situation of unemployment) enables the calculation of the amount of the benefit.

Benefit amount

          During the first 180 days, 70% of the basis for calculation.

          From day 181 onwards, 60% of the basis for calculation.

For the current estimation, the amount of the first 180 days will be considered, because it is
assumed that most of the workers were employed during high season.

Maximum benefit amount

          With no children, it is 175% of the IPREM (Public Income Index)3, increased by 1/6 (part
          corresponding to thirteen month pays). In 2009 it was 615.11 euros.



The maximum benefit amount is:

                                        Maximum unemployment benefit

                  Maximum benefit with no children                                            1,076.00

                              Source: own table based on different sources.                




Duration of the benefit

3
   IPREM. The Public Income Index (IPREM) is the reference index in Spain to calculate the income threshold for
different purposes (subsidies for housing, grants, unemployment benefits...). It was introduced on 1 July 2004 to replace
the Minimum Wage (SMI in Spain), which is now used solely for work issues. By introducing the IPREM, the aim was to
make sure that if the SMI increased a lot, it would not affect the entire system of benefits and subsidies. Since it was
introduced, the IPREM has risen annually less than the SMI.

The IPREM is updated at the beginning of the year in the Budget Law.




                                                           42
            Evaluation of the Profitability and Economic impact generated by the Europe Senior Tourism Programme



  The duration of the benefit depends on the amount of time the person is employed and paying
  Social Security contributions.

                                Period of contributions             Benefits         Subsidy

                             6 months to 1 year                       N/A           6 months
                             1 year to 1 year and a half           4 months         2 months
                             More than 1 year and a half           6 months            N/A



  Unemployment subsidy

  The amount of the subsidy is 80% of the IPREM (527.24 euros in 2009 and 532.51 euros in 2010).

  Because the programme has been carried out in the last quarter in 2009 and the first 4 months
  in 2010, we calculate the average value:

  [(527.24*3) + (532.51*4)]/7 = 530.25

  This means that the subsidy would be 424.20 euros.

  Summary of the money saved on unemployment

  Depending on the amount of time the workers have been paying contributions they qualify for
  benefits, subsidy, a combination of both or nothing.

  In order to estimate this amount, and because of the lack of more accurate information, we
  assume the hypotheses made in the studies of the economic impact of the IMSERSO
  programme (PWC 2004 and 2008), which involves assigning the same amount to each one of
  the groups in the four situations mentioned. This hypothesis says that on average, 49.64% of
  the workers would get benefits, 41.53% would get a subsidy and the rest would get nothing.

  Therefore, the resulting calculations are:

                                 Maximum
                                                                                                          Amount saved
                                  monthly                            Saving on            Saving on
            Activity                        No. of jobs                                                       on
                               unemployment                          subsidies             benefits
                                                                                                          unemployment
                                  benefit
                                   1,076.00            450           555,536.63          1,684,313.70      2,239,850.34
Hotels and restaurants
                                   1,076.00             35            43,571.50           132,103.04       175,674.54
Land transport
                                   1,076.00             15            18,154.79           55,042.93         73,197.72
Air transport
                                   1,076.00             44            54,464.38           165,128.79       219,593.17
Travel agencies
                                   1,076.00             65            79,881.08           242,188.90       322,069.98
Other (*)
                                                       609           751,608.39          2,278,777.36      3,030,385.75
TOTAL INCOME
(*) Includes cultural activities and vehicle rental. Average unemployment benefits have been estimated.




                                                             43
          Evaluation of the Profitability and Economic impact generated by the Europe Senior Tourism Programme



            IRPF (Income Tax)
 Based on the volume of direct jobs generated, we calculate the amounts gained from income tax:

                                                                                    Total from        Total from 7
                                Generated        1 month         Estimated tax
           Activity                                                                  monthly            months'
                                  jobs           salary (1)       deduction
                                                                                    deductions        deductions
                                    450            1,350                   15%        91,223            638,563
 Hotels and restaurants
                                     35            1,646                   20%         11,628            81,395
 Land transport
                                     15            3,108                   25%         11,440            80,080
 Air transport
                                     44            1,417                   15%          9,385            65,696
 Travel agencies
                                     65            1,378                   15%         13,389            93,724
 Others
                                    609                                               137,065            959,458
 TOTAL INCOME
 (1) Average salaries for each subsector, taken from the PWC report.



            VAT

      -     The amount of VAT associated with every branch of activity includes the VAT of the
            items that companies deduct through operations and consumptions.
      -     Based on this, the income of the Government only comes from the amount associated
            with the Added Value of the service.
      -     In order to estimate this amount, we apply the cost ratio of staff/gross income of the activity
            (it has been calculated in the direct employment section), to the total VAT amount.

                                                                                  Staff/production     Income from
                        Item                                  VAT amount
                                                                                     cost ratio            VAT

Accommodation (tourist package)                                 560,454.08              44.5%            249,122.97

Drinks at hotels, bars and cafés                                251,863.31              44.5%            111,953.75

Total hotel and catering                                               -

Road transport                                                  25,981.31               80.5%            20,925.63

Air transport                                                   84,129.97               33.1%            27,833.18

Total transport                                                        -

Commercialisation                                                      -                55.9%                    -

Package organised excursions                                    54,778.34

Additional excursions                                           39,521.98

Total excursions                                                94,300.31               41.3%            38,936.33

Entertainment and assistance                                    33,910.40

Other costs (1)                                                 139,815.19

Shops                                                           900,126.06

Other expenses at the destination                               269,863.71

Other services                                                1,558,709.82              41.3%            643,586.78

Insurance policies                                                     -

TOTAL VAT INCOME FROM EXPENSES                                1,653,010.14                              1,092,358.64
AT THE DESTINATION




                                                           44
         Evaluation of the Profitability and Economic impact generated by the Europe Senior Tourism Programme



           Company tax

  The estimation is based on the net activity carried out by the companies at the destination
  (direct impact at the destination):

                                                                                 Average tax
                                                      Net income from
                       Item                                                     from turnover           Accrued
                                                        the activity                  (1)
Accommodation (tourist package)                           8,006,486.80              0.40%              32,025.95

Drinks at hotels, bars and cafés                          3,598,047.24               0.46%             16,551.02

Total hotel and catering                                 11,604,534.04

Road transport                                             371,161.64                  1%               3,711.62

Air transport                                             1,201,856.74                0.2%              2,403.71

Total transport                                           1,573,018.38

Commercialisation                                                -                   0.48%                  -

Package organised excursions                               342,364.62

Additional excursions                                      247,012.35

Total excursions                                           589,376.97                 0.6%              3,536.26

Entertainment and assistance                               211,940.00

Other costs (1)                                            873,844.92

Shops                                                     5,625,787.89

Other expenses at the destination                         1,686,648.21

Other services                                            8,398,221.02                0.6%             50,389.33

Insurance policies                                         378,231.39                 0.5%              1,891.16

TOTAL INCOME FROM COMPANY TAX                            22,543,381.79                                 110,509.04

(1) data taken from the PWC report 2004.



           Total income

  The total income of the Spanish Government gained from tax collecting is the following:

                                                                        Amount in
                                            Item
                                                                         euros
                                       Social Security                   1,795,925

                                     Amount saved on                     3,030,386
                                      unemployment
                                    IRPF (Income Tax)                    959,458

                                            VAT                          1,092,359

                                     IS (Company tax)                    110,509

                                  TOTAL COLLECTION                       6,988,636




                                                          45
      Evaluation of the Profitability and Economic impact generated by the Europe Senior Tourism Programme




12.2. Return on investment for the Spanish Government

        In order to calculate the investment made by the Spanish Government, in subsidies and
        the insurance policy, we use the following data:



                    Average subsidy amount                                108.58 €
                    Volume of users:                                   45,000.00


        The investment of the Government has been:



                                Investment item                      Amount in euros
                    Subsidies                                           4,886,394 €

                    Insurance policy                                     400,000 €

                    Total public investment                             5,286,394 €



Based on the volume of investment, and the income generated, we obtain the profitability of the
Programme for the Government:

                                          Item                         Amount in euros
                                    INVESTMENT                             5,286,394

                                    Social Security                        1,795,925

                          Amount saved on unemployment                     3,030,386

                                  IRPF (Income Tax)                         959,458

                                          VAT                              1,092,359

                                   IS (Company tax)                         110,509

                                       GAINED                              6,988,636

                                      Differential                         1,702,242



                      PROFITABILITY OF THE PROGRAMME                               1.32




                                                       46
        Evaluation of the Profitability and Economic impact generated by the Europe Senior Tourism Programme




13. Impact of the Programme at the Origin - Rest of EU
Because a programme like this one does not only have an economic impact on the destination
country, it is interesting to quantify the interrelation that exists between the different EU markets.
An analysis like this also enables the evaluation of the potential for introducing the Programme
internationally in the near future.

The calculation of the impact of the Programme at the origin considers three analysis branches,
like the impact at the destination. On one hand, the economic activity generated, and on the
other, the capacity of the activity to generate employment, and finally the income obtained by
European administrations via tax.

The items in the Programme that have an impact at the origin are:

    -      Commercialisation at the origin (travel agencies)

    -      Air transport (estimation: 80% of the total)

    -      Services hired (includes promotion expenses and business trips to commercialise the
           product)

Commercialisation at the origin

Economic activity

The estimation of the economic activity at the origin arising from the commercialisation of the
tourist packages has been adjusted per country based on the distribution of the total amount of
visitors received.

                                                                                              Activity
                                                     Balearic                  % of the
           Users per origin           Andalusia                    TOTAL                  generated at the
                                                     Islands                  total users
                                                                                               origin
   150 SUBSIDY                               6,281       1,447        7,729         17.2%            204,624.7

   Slovakia                                     24            22         47          0.1%               1,241.8

   Poland                                    5,811       1,291        7,102         15.8%            188,026.6

   Czech Republic                             446          134          580          1.3%              15,356.3

   100 SUBSIDY                             31,281        5,990       37,271         82.8%            986,804.2

   Austria                                    297          230          527          1.2%              13,956.9

   Belgium                                    250             37        287          0.6%               7,598.7

   Bulgaria                                   794          730        1,524          3.4%              40,358.9

   Denmark                                    895          425        1,320          2.9%              34,948.8

   France                                        0         220          220          0.5%               5,831.1

   Greece                                  14,194        1,276       15,470         34.4%            409,589.9

   Netherlands                               1,861         215        2,076          4.6%              54,963.7

   Ireland                                   5,219         435        5,655         12.6%            149,719.4

   Italy                                     4,590         946        5,536         12.3%            146,573.3




                                                         47
      Evaluation of the Profitability and Economic impact generated by the Europe Senior Tourism Programme




   Portugal                                    524         119            643            1.4%        17,034.4

   Romania                                  2,657        1,355          4,012            8.9%      106,228.9

   TOTAL                                  37,563         7,437        45,000         100.0%       1,191,428.9




        In total, the international impact on the economic activity arising from commercialising
        the packages at the origin has been 1.1 million euros.

Generated jobs
In order to estimate the number of jobs generated at the origin, the calculations have been
based on the following reasoning:

        We have based the calculations on the structure of costs of a Spanish travel agency, in
        order to estimate the importance of the labour cost in the sector.

                             Structure of costs of travel agencies in Spain
                         Office staff salary                                    48.0%
                         Centre staff costs                                      3.0%
                         Staff costs                                            51.0%
                         Source: study of the costs of managing air tickets for travel
                         agencies, Deloitte & Touche.


        Based on this estimation, the total approximate staff costs (added value) arising from the
        activity generated at the origin (51% has been applied to the different impacts at the origin).

        On the other hand, and based on data taken from the INE (they take Eurostat data as a
        reference), a comparison between the average salary in Spain and the average salaries
        in the EU countries has been established.

        Based on the data of the average labour cost of the company (includes SS) of the travel
        agencies in Spain (data taken from the study on the management costs for air tickets in
        travel agents, Deloitte & Touche), the amount equal to this cost per person using the
        comparison of salary levels mentioned before has been estimated. This equivalence
        has been adjusted to 7 months (duration of the programme).

        Finally, the average labour cost for the company during 7 months per country has been
        obtained. If we compare this cost with the estimation of total labour cost carried out
        before, we get the approximate number of jobs generated for each origin market.




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                   Evaluation of the Profitability and Economic impact generated by the Europe Senior Tourism Programme



                         Estimation of the employment generated by the commercialisation at the origin

                                                   Average
                                                                     Average salary
                                    Salary ratio    annual
    Activity                                                              cost             Estimation
                    Staff costs     Spain/salary labour cost                                                 Hours
generated at the                                                     equivalence for        of jobs                       Hours/People
                    estimation        in other   for company                                                 worked
     origin                                                           7 months per         generated
                                     countries   equivalence
                                                                         person
                                                  per person
   204,624.7         104,358.6
    1,241.8            633.3            0.53          11,554.0            6,739.8               0              105            2.2
   188,026.6          95,893.6          0.63          13,734.0            8,011.5              12             13,406          1.9
   15,356.3           7,831.7           0.66          14,388.0            8,393.0               1             1,045           1.8
   986,804.2         503,270.1                                                                                   -             -
   13,956.9           7,118.0           1.27          27,707.5           16,162.7               0              493            0.9
    7,598.7           3,875.4           1.29          28,211.6           16,456.8               0              264            0.9
   40,358.9           20,583.0          0.51          11,118.0            6,485.5               3             3,555           2.3
   34,948.8           17,823.9          0.89          19,327.8           11,274.6               2             1,771           1.3
    5,831.1           2,973.9           1.18          25,732.0           15,010.3               0              222            1.0
   409,589.9         208,890.8          0.89          19,450.5           11,346.1              18             20,620          1.3
   54,963.7           28,031.5          1.38          30,159.3           17,592.9               2             1,785           0.9
   149,719.4          76,356.9          1.50          32,628.5           19,033.3               4             4,493           0.8
   146,573.3          74,752.4          1.16          25,192.1           14,695.4               5             5,697           1.0
   17,034.4           8,687.6           0.89          19,450.5           11,346.1               1              858            1.3
   106,228.9          54,176.8          0.51          11,118.0            6,485.5               8             9,356           2.3
  1,191,428.9        607,628.7                                                                 57             63,669          1.4



                     In total, it is estimated that about 57 jobs were created at the origin.


          Air transport

          Economic activity

          The estimation of the economic activity at the origin arising from air transport is estimated at:

                                       Impact at origin                         5,333,062.53



                     Because we do not have details on the distribution of use for each airline, the calculation of
                     the impact generated at the origin cannot be detailed for each market, for the moment.




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         Evaluation of the Profitability and Economic impact generated by the Europe Senior Tourism Programme



Generated jobs4
In order to establish the impact on jobs generated or maintained by the Programme in airlines,
we have based the estimation of sources of the sector – for a period of six months, one job for
1,600 passengers (return trip) transferred is estimated on average.

                                                                           2009-2010
                             Passengers by plane                              45,000.00
                             Jobs                                                  28


Hired services

They include:

           Travel expenses for commercial trips to the origin

           Promotional expenses

An amount equivalent to the “other costs” item is estimated, which is a little higher than 100,000
euros.

           In order not to over-calculate the impact of this item at the origin, and because of the
           amount, we do not associate any new direct jobs.



TOTAL ECONOMIC IMPACT AT THE ORIGIN
If we add up the impacts from the analysed activities we obtain that:
           An impact at the destination of more than 6.6 million euros has been generated.
           This volume of activity has generated about 85 direct jobs.



                                 Item                            Origin                 Jobs

                    Air transport                           5,333,062.53
                                                                                          28

                    Commercialisation                       1,191,428.86
                                                                                          57

                    Other costs (1)                          102,122,47                   -

                    TOTAL ORIGIN                            6,626,613.87
                                                                                          85

                    (1) Includes the promotion at the origin and business trips.




4
    The calculation methodology is like the one applied in the Economic Impact of the IMSERSO Programme study.



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                    Evaluation of the Profitability and Economic impact generated by the Europe Senior Tourism Programme




             14. Estimation of income obtained by the European
                 administrations
             Because it is a programme that aims to bring together the people and the markets of the
             European Union, it is very interesting to quantify the direct effect of the programme in
             connection with the capacity of the different national administrations to generate income.

             Because of the information available, this estimation has been made as aggregate data. Based
             on this, an approximation to the global income of the administrations of the different countries
             (excluding Spain) is included, arising from the economic generated by the programme, and
             which has an impact on the rest of the EU.

             In order to make this estimation, and because there are no details on tax charges in the
             different countries, we apply the current tax system in Spain to the direct impact at the origin
             and the estimated jobs.

                      Supposing that the rest of EU countries have a similar tax system to Spain:



             Income per item

                      Social security

             Based on the volume of direct jobs estimated, as well as the contributions per branch of activity
             (which are included in the following table), we calculate the income from Social Security:

                                               Estimation of income from Social Security

                 Generated         % SS            1 month         Company cost         Spain/EU salary         Average    Total income
  Activity
                   jobs           payment        salary Spain         Spain                ratio (1)           salary EU     from SS
Air transport         28           32.8%            3,108.3             4,128.5                0.94             2,921.8     188,791.0

Travel                57           29.3%            1,416.7             1,831.6                0.94             1,331.7     155,210.4
agencies
TOTAL                 85                                                                                                    344,001.3
(1) Ratio estimated based on the salary table from Appendix 1. It corresponds to the estimation of the users
of the Programme.



                      Subsidies for saving on unemployment

             The money saved on unemployment is based on the volume of the estimated direct jobs. For
             this estimation, we maintain all the suppositions, which are included again below:




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      Evaluation of the Profitability and Economic impact generated by the Europe Senior Tourism Programme



Unemployment benefits

According to the regulations on unemployment benefits, the elements and variables that we use
to calculate the benefits and subsidies are:

Basis for calculation

The basis for calculation of each worker (average of the bases for Accidents at work and
Professional illnesses, for which they have contributed during 180 days before the legal
situation of unemployment) enables the calculation of the amount of the benefit.

Benefit amount

        During the first 180 days, 70% of the basis for calculation

        From day 181 onwards, 60% of the basis for calculation

For the current estimation, the amount of the first 180 days will be considered, because it is
assumed that most of the workers were employed during high season.

Maximum benefit amount

        With no children, it is 175% of the IPREM (Public Income Index), increased by 1/6 (part
        equivalent to thirteen month pays). In 2009 it was 615.11 euros.

The maximum benefit amount is:

                                     Maximum unemployment benefit

                Maximum benefit with no children                                         1,076.00

                           Source: own table based on different sources.              


Duration of the benefit

The duration of the benefit depends on the amount of time the person is employed and paying
Social Security contributions.

                          Period of contributions            Benefits        Subsidy

                       6 months to 1 year                      N/A          6 months

                       1 year to 1 year and a half          4 months        2 months

                       More than 1 year and a half          6 months           N/A




                                                       52
        Evaluation of the Profitability and Economic impact generated by the Europe Senior Tourism Programme



 Unemployment subsidy

 The amount of the subsidy is 80% of the IPREM (527.24 euros in 2009 and 532.51 euros in 2010).

 Because the programme has been carried out in the last quarter in 2009 and the first 4 months
 in 2010, we calculate the average value:

 [(527.24*3) + (532.51*4)]/7 = 530.25

 This means that the subsidy would be 424.20 euros.



 Summary of the money saved on unemployment

 Depending on the amount of time the workers have been paying contributions they qualify for
 benefits, subsidy, a combination of both or nothing. In order to estimate this amount, and
 because of the lack of more accurate information, we assume the hypotheses made in the
 studies of the economic impact of the IMSERSO programme (PWC 2004 and 2008), which
 involves assigning the same amount to each one of the groups in the four situations mentioned.
 This hypothesis says that on average, 49.64% of the workers would get benefits, 41.53% would
 get a subsidy and the rest would get nothing.

 Therefore, the resulting calculations are:

                               Maximum
                                                                                                 Amount saved
                                monthly            No. of        Saving on        Saving on
         Activity                                                                                    on
                             unemployment           jobs         subsidies         benefits
                                                                                                 unemployment
                                benefit
Air transport                        1,076.00              28        34,683.35     105,155.33          139,838.68

Travel agencies                      1,076.00              57        70,103.48     212,544.48          282,647.96

TOTAL INCOME                                                                                           422,486.64



          IRPF (Income Tax)

 Based on the volume of direct jobs estimated, we calculate the amounts gained from income tax:

                                             Average
                                                                                 Total from         Total from 7
                            Generated         salary 1   Estimated tax
       Activity                                                                   monthly             months'
                              jobs           month EU     deduction
                                                                                 deductions         deductions
                                                 (1)
Air transport                          28          2,922          25%                   20,544             143,808

Travel agencies                        57          1,332                15%             11,355                 79,486

TOTAL INCOME                                                                                            223,294.24

(1) Average EU salaries based on the comparative salary table in the appendix.




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             Evaluation of the Profitability and Economic impact generated by the Europe Senior Tourism Programme



               VAT

         -     The amount of VAT associated with every branch of activity includes the VAT of the
               items that companies deduct through operations and consumptions. Based on this, the
               income of the Government only comes from the amount associated with the Added
               Value of the service.

         -     In order to estimate this amount, we apply the cost ratio of staff/gross income of the activity
               (it has been calculated in the direct employment section), to the total VAT amount.

                                   Economic
                                                                                     Staff/production       Income from
         Concept                  activity at the      VAT rate      VAT amount
                                                                                       cost ratio (2)           VAT
                                      origin
Air transport                      5,333,062.53             7.0%     373,314.38                    0.33       123,505.65

Commercialisation                  1,191,428.86            16.0%     190,628.62                    0.56       106,489.58

Other costs (1)                      102,122.47

TOTAL INCOME FROM
VAT                                6,626,613.87                      563,943.00                               229,995.23

(1) Expenses paid by agents of other EU countries for which they do not pay tax.
(2) The same ratios calculated are used




               Company tax

    The estimation is based on the net activity carried out by the companies at the origin (direct
    impact at the origin):

                                                      Net income
                                                                           Average tax from
                          Item                         from the              turnover (1)
                                                                                                    Accrued
                                                        activity
         Air transport                                5,333,062.53                      0.2%      10,666.13

         Commercialisation                            1,191,428.86                     0.48%        5,718.86

         Other costs (1)                                102,122.47                      0.6%         612.73

         TOTAL INCOME FROM
         COMPANY TAX                                  6,626,613.87                                16,997.72

         (1) data taken from the PWC report 2008.




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      Evaluation of the Profitability and Economic impact generated by the Europe Senior Tourism Programme



So, the total estimated income obtained by the European administrations is.

                                                                 Amount in
                                           Item
                                                                   euros
                              Social Security                     344,001

                              Amount saved on                      422,487
                              unemployment
                              IRPF (Income Tax)                    223,294

                              VAT                                  229,995

                              IS (Company tax)                      16,998

                              TOTAL COLLECTION                    1,236,775




Taking the investment made as a reference (5,286,394 euros) this performance would mean an
additional recovery of 0.23 for every euro invested by the Spanish Government, if the
Spanish Government is able to recover this investment. In other words, this analysis of direct
return on investment proves that an investment of 27.48€ per user by the European
authorities is completely justified, just for the return.




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      Evaluation of the Profitability and Economic impact generated by the Europe Senior Tourism Programme




15. Balance of Payments
Because the Senior Tourist Programme is international, it is interesting to approximate the
effect on the Balance of Payments to the development of the Programme and the transactions
between agents of different EU countries that arise from it.

In order to estimate the result of the Balance of Services (part of the Current Account Balance)
the following elements are taking into account:

        Balance of Services: Income – Payments arising from the trade of services (tourism,
        transport hiring, services to companies, insurance services, etc.).

        In order to estimate the calculation, we take the average money flows generated by one
        user. From the payments made by the user, we can determine and exclude the
        percentage of this cost paid that affects the origin. The resulting difference is equivalent
        to the average payment per user and that has an impact on the destination.

        Air transport is 80% of the items with an impact on the origin, as well as the
        commercialisation at the origin.

Based on this, the balance of services resulting from the Europe Senior Tourism Programme
presents the following differential:



                                 Income per user                           Euros
                     Average price per user (origin)                       311.7
                     Average expenses at the destination with
                     VAT (origin)                                           374.0
                     Total income per user                                  685.7
                               Payments per user
                     Cost of package at the origin                          147.3
                               Differential per user                        538.4

                                  Volume of users                          45,000

                     Total Balance of Services Differential              24,228,821.75


After the corresponding calculation, we conclude that:


The investment of 5.2 million euros made by the Spanish Government has generated a
surplus of 24.2 million euros in the Current Account Balance.




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      Evaluation of the Profitability and Economic impact generated by the Europe Senior Tourism Programme




16. Final evaluation of the Programme
The main conclusions drawn from the analysis are:

    The Europe Senior Tourism Programme has had a significantly positive impact. Some of
    the main impact data are the following:

        o    An overall impact at the destination of more than 22.5 million euros.

        o    Generation of about 609 direct jobs at the destination, in the tourism sector.

        o    50% of the impact at the destination is on the hotel and catering sector. The hotels
             also generate the largest number of jobs: 48.3% of the total in the programme.

        o    The hotel and catering sector generates 65.1% of the direct tax impact for the
             state, taking into account all the subsectors of the studied activities.

        o    A global impact in the rest of the EU (origin) of more than 6.6 million euros.

        o    Generation of about 85 direct jobs at the origin, in the tourism sector.

In total the Programme has had a direct impact of 29 million euros on the EU economy. It has
generated about 690 direct jobs in the tourism sector.

    Despite this, a slight seasonality has been identified in overnight stays within the
    programme, in March and April mainly. This seasonality can be due to the
    commercialisation of the programme starting late, because it was not able to happen until
    the contract was signed between Segittur and Zoetrope in July, and because it is a new
    programme which has to be commercialised over a large geographical area.

    The government, with subsidies, has provided 22% of the total cost of the Programme.
    Users’ payments have accounted for almost 78% of the total amount in the 2009/2010 season.

    The Spanish Government's investment has been largely recovered. For every euro
    invested, 1.32 euros have been gained from tax.

    The tax impact is on the State Government and the participating Autonomous Regions.

    European administrations have also benefited from the activity generated by the
    Programme. It is estimated that about 1.2 million euros may have been obtained from
    the direct tax impact of the programme in the rest of the EU. This means 27.48 euros
    per user.




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        Evaluation of the Profitability and Economic impact generated by the Europe Senior Tourism Programme




It can be concluded that the Programme has been very profitable for EU administrations.
If we separate this profitability into two sections, for every euro invested by the Spanish
Government:

    The Spanish Government has gained 1.32 €.

    The other European administrations have gained 0.23 €.

    To sum up, FOR EVERY EURO INVESTED BY THE SPANISH GOVERNMENT, THE
    EUROPEAN INSTITUTIONS AS A WHOLE HAVE GAINED 1.55 €.

    Because of this, the institutions in the EU are able to get more involved in order to promote
    initiatives like this one. Thanks to the results obtained, the Europe Senior Tourism
    Programme is backed up internationally by the financially sustainable and feasible model
    that has been proved in the pilot project.



Some considerations for new editions of the programme.

Users

The future prospects for the Programme are good, without a doubt. The population in Europe is
ageing. However, because of the increased life expectancy and a better financial situation, a
new segment has gradually appeared, with new specific needs. According to forecasts, the
senior segment will continue to grow over the next few years and will demand more and more
services relating to wellness and quality of life.

It is a segment that, because of its characteristics, is an opportunity in itself for the tourism
sector in Europe. Their purchasing power, their motivations for active tourism and the
availability to travel all year round make it one of the most interesting segments when boosting
the economic and tourist activity in destinations outside the high season.

Spain

Spain has had a previous successful experience – the Senior Holiday Programme by the
IMSERSO (Spanish State Institute for Seniors and Social Services), which also appeared in a
time of financial crisis, at the beginning of the 1990s, with the aim of maintaining the level of
economic activity in the sector, and consequently the jobs in times of less demand.

This experience, which started over 20 years ago, has proved the important contributions that
programmes like this one are making to the tourism sector specifically and local economies in
general.

In the tourist destinations, business owners and local institutions acknowledge the benefits
generated by programmes like this ones and they understand that it is an opportunity to stop the
economic activity falling abruptly.



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      Evaluation of the Profitability and Economic impact generated by the Europe Senior Tourism Programme



The Programme also proves to be very attractive for the administrations, because it is profitable
and the return gained during the first year has been higher than the total amount invested by
public administrations.

European Union

The results obtained lead us to believe that the European institutions have a unique opportunity
to get actively involved in this project in the future. On one hand, because these feasible trips
for a large number of seniors have positive effects on their health and quality of life. On the
other, because of the capacity to generate economic activity and, therefore, direct employment
both at the origin and the destination.

As a result of this activity, the income of European administrations has increased. About 1.3
million euros have been collected this first year. If this income was reinvested in the Programme
in the future, the generation of economic activity would continue to grow and transnational
employment would grow in the medium and long term. The different regions in Europe would
noticeably benefit from this in other sectors as well as tourism.

To sum up, the implementation of this project could entail an important boost for the
economic activity and growth in Europe, through the reduction of seasonality of tourism,
the creation of employment in the tourism sector, and finally, the strengthening of the
bonds between European citizens.




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      Evaluation of the Profitability and Economic impact generated by the Europe Senior Tourism Programme



Appendix 1: Support tables and data


Input/Output multiplier – Indirect impact at the destination (Alternative 2)

The approximation of the estimation to the indirect impact, that is, on the interrelations between
economic sectors, arising from the “Europe Senior Tourism” pilot project, was based on the
input/output ratio of each one of the main branches of tourist activity.

In this sense, the multiplying effect of the production of one unit of average tourist output in
Spain has been identified, based on the series accounting from 2007, available in the Spanish
Tourism Satellite Account (National Statistics Institute).

                                                                                                 Gross added
                                                                               Average
            Units: millions of euros                        Production                         value (to basic
                                                                            consumptions
                                                                                                   prices)
Hotels and similar                                           20,990.00          7,760.00              13,230.00
Restaurants and similar                                      90,116.00         38,157.00              51,959.00
Transport of travellers by road                               9,156.10          3,822.40               5,333.70
Air transport                                                 9,670.00          6,485.00               3,185.00
Travel agencies                                               4,816.20          1,990.20               2,826.00
TOTAL typical tourist branches of activity                  325,255.80        130,665.20             194,590.60

                                                                                                 Gross added
                                                                               Average
           % of the total production                        Production                         value (to basic
                                                                            consumptions
                                                                                                   prices)
Hotels and similar                                                      1             0.37                   0.63
Restaurants and similar                                                 1             0.42                   0.58
Transport of travellers by road                                         1             0.42                   0.58
Air transport                                                           1             0.67                   0.33
Travel agencies                                                         1             0.41                   0.59
TOTAL typical tourist branches of activity                              1             0.40                   0.60


    Estimation constraint: The input-output models have constraints because of the restrictive
    suppositions on which they are based. Specifically, constant returns to scale are assumed
    in the production, stability of prices, stability of technical coefficients and the existence of
    idle resources. These suppositions mean in practice that the production functions have fixed
    coefficients and that a stimulus of the demand generates a linear and automatic response in
    the entire system, with no constraint linked to the variation of prices or lack of consumables.




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     Evaluation of the Profitability and Economic impact generated by the Europe Senior Tourism Programme



Table of VAT tax rates in the EU

                      Country                   Normal rate               Reduced rate
                        Albania                      45%                        0%
                       Germany                       19%                        7%
                        Austria                      20%                   12% or 10%
                        Belgium                      21%                    12% or 6%
                 Bosnia-Herzegovina                  17%
                        Bulgaria                     20%                     7% or 0%
                        Cyprus                       15%                        5%
                        Croatia                      22%                        10%
                       Denmark                       25%
                       Slovakia                      19%                        10%
                       Slovenia                      20%                       8.5%

                         Spain                       16%                     7% or 4%

                        Estonia                      18%                        9%
                        Finland                      22%                    17% or 8%
                        France                     19.60%                  5.5% or 2.1%
                        Greece                       19%                    9% or 4.5%
                       Hungary                       25%                        5%
                  Republic of Ireland              21.50%               13.5%, 4.8% or 0%
                        Iceland                    24.50%                    7%Note 9
                          Italy                      20%                 10%, 6%, or 4%
                        Kosovo                       16%
                         Latvia                      21%                        10%
                       Lithuania                     19%                     9% or 5%
                     Luxembourg                      15%                12%, 9%, 6%, or 3%
                       Malta                         18%                        5%
                 Former Yugoslav
                                                     18%                        5%
               Republic of Macedonia
                      Moldova                        20%                        5%
                      Montenegro                     17%
                        Norway                       25%                    14% or 8%
                     Netherlands                     19%                     6% or 0%
                        Poland                       22%                  7%, 3% or 0%
                       Portugal                      20%                    12% or 5%
                   United Kingdom                  17.50%                    5% or 0%
                   Czech Republic                    19%                        9%
                       Romania                       19%                        9%
                        Russia                       18%                    10% or 0%
                        Serbia                       18%                     8% or 0%
                        Sweden                       25%                    12% or 6%
                      Switzerland                   7.60%                  3.6% or 2.4%
                        Ukraine                      20%                        0%
                                        Source: European Tax Handbook




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     Evaluation of the Profitability and Economic impact generated by the Europe Senior Tourism Programme



Comparative EU Salary Table

                                                                     Average
                                                   Average            salary
                                    Country
                                                    salary         Spain/average
                                                                      salary
                            Spain                       21,944               1.00
                            Germany                     31,945               1.46
                            Austria                     27,891               1.27
                            Belgium                     28,398               1.29
                            Cyprus                      22,005               1.00
                            Denmark                     19,456               0.89
                            Slovakia                    10,927               0.53
                            Slovenia                    16,132               0.74
                            Estonia                        8,373             0.38
                            Finland                     24,054               1.10
                            France                      25,902               1.18
                            Greece                      19,579               0.89
                            Hungary                     10,683               0.49
                            Ireland                     27,197               1.24
                            Italy                       25,359               1.16
                            Latvia                         6,368             0.29
                            Lithuania                      7,436             0.34
                            Luxembourg                  32,844               1.50
                            Malta                             0              0.00
                            Netherlands                 30,359               1.38
                            Poland                      11,686               0.63
                            Portugal                          0              0.89
                            United Kingdom              30,458               1.39
                            Czech Republic              12,183               0.56
                           Sweden                   23,415                 1.07
                      Source: data taken from the National Statistics Institute (INE)




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