Spain's iconic Parador hotels to lay off hundreds

MADRID Thu Jan 3, 2013 8:09am EST

MADRID (Reuters) - Spain's Parador hotel chain will lay off 350 staff, unions said on Thursday, adding an enduring symbol of a still robust tourism industry to the list of victims of the country's economic crisis.

The iconic but loss-making chain, which runs hotels at historic locations and dates back to 1926, said in November it would lay off 644 workers and close up to seven sites after occupancy rates fell from 70 percent in 2007 to 52 percent in 2012.

But after five days of negotiations with unions that ended overnight, owner Paradores de Turismo agreed to more than halve the number of layoffs and limited closures to a single hotel.

State-funded Paradores, which lost 77 million euros in 2011, will also cut salaries and close some of its more than 90 hotels out of season.

They are scattered across Spain in converted castles, monasteries and mansions, including in the grounds of one of the country's leading tourist attractions, Granada's Alhambra palace.

The chain said it expected 2012 losses to have widened to 107 million euros despite cost-saving measures it said it took to make it more competitive.

"Although the agreement reached is not what all the workers would have wanted, it will significantly reduce the trauma of job losses," the unions said in a statement.

Staff went on strike on a bank holiday weekend in December to protest the original restructuring plan.

Paradores said the revised plan was effective from January and would help the company "face the immediate future from a perspective of change and recovery".

Tourism is one of Spain's very few growth sectors and accounts for 11 percent of economic output. Last year, 14.4 million tourists visited the country in the peak month of August, up 4.2 percent on 2011.

Spanish companies have laid off workers in droves to battle a recession that has dragged on profits. Loss-making airline Iberia (ICAG.L) is currently locked in talks with unions over plans to fire 4,500 people.

On Thursday, data showed a 1.2 percent decline in registered jobless in December thanks to holiday hiring, but analysts were not optimistic of a change in trend in a crippled labour market in the new year.

According to what is generally considered a more reliable measure of joblessness, the country's official unemployment rate rose to 25 percent in the third quarter of 2012, the most recent period for which figures are available (Reporting by Clare Kane; Editing by Tracy Rucinski, John Stonestreet)

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