I can't see that their is an answer to this problem. If I were looking for a holiday and I could fix my costs somehow than I would definitely go the all inclusive route. Providing the hotels/resorts maintain value for money there is likely to be an ever greater proportion of travellers using this method to pay in GBP and get away with minimal foreign currency costs. Those of us who have purchased holiday homes and are forced to go the traditional route are finding that our money covers less and less as time goes on. Not only are we affected by the low £/Euro exchange rate, but the increasing cost of living in Spain. We rarely go out for a meal in Spain these days and because we go by car, take out many of the expensive basics (dry food and household supplies) and make sure we only have to buy fresh food / wine for our meals.
I can see why restaurants are having such a tough time because there are so many of them. There are 10 within 1km of our place as well as more bars than I can count that provide meals. With the drop in tourism to Spain and the artificially maintained level of the Euro, this is going to continue. Bars in our village are continually going out of business as the public, both Spanish and foreign can no longer afford to support them.
The answer, if there is one, would be for Spain to return to the Paseta and automatically devalue against other countries meaning that the Brit tourist will see better value for money. However, once the all inclusive genie is out of its bottle, it will be difficult to get it back in. In any case Germany will continue to support the Euro because it is the only way they can avoid the Deuchmark going through the roof with the resulting cost to their own trade, so don't expect a change anytime soon unless the Euro collapses under its own weight.
M.