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Luxury tourist resorts and developments in Spain suffer severe fall in bookings

Even the world famous La Manga Club resort in Murcia, a popular destination with celebrity footballers from Real Madrid and Manchester United, has been forced to seek protection from its creditors and go into voluntary administration.

It is the first Spanish resort if its calibre to succumb to the economic crisis. In seeking protection from its creditors, La Manga Club, which is owned by the Spanish developer Medgroup, hopes to gain breathing space to sort out its finances and return to business as normal,' a spokesman said.

It is understood the immediate running of the resort is unaffected for present and the company is talking with financiers.

The company has debts of €97 million and assets estimated at €170 million, according to figures published in the Spanish press. It includes three golf courses, 28 tennis courts, 8 football pitches, a spa, and a 5-star Hyatt Regency hotel, and is one of Spain's best known, luxury resorts.

Its great sporting facilities and good climate make it a popular winter training destination for professional sportsmen, though the resort has also been in the news for the scandalous behaviour of some of its celebrity football guests.

Though largely completed as a residential development, the developer Medgroup still has some leaseback property investments for sale, and there is a wide selection of villas and apartments available on the resale market. Given the resort's upmarket identity, holiday homes in La Manga Club are some of the most expensive in Spain.

Medgroup, which develops other resorts in Spain, such as Bonmont (Costa Dorada) and Play Macenas (Mojacar), is partly owned by billionaire financier George Soros's real estate investment fund. Medgroup itself is not seeking court administration.

However the problems of such a well known resort are indicative of the wider problems facing the tourism industry.

A spokesman for Medgroup confirmed that La Manga has been affected by a severe fall in bookings. 'The general crisis being suffered by Spain has particularly affected the high-level tourist sector, with significant reductions in bookings and the number of night stays in high-quality resorts such as La Manga Club. This fall in sales has meant that the company has not been able to comply with the business plan expected for 2008,' the spokesman said.

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