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Resolved!

Thanks for your replies everyone.

The strange thing was that even though the www version of pages did seem to 301 to non-www version (I checked headers were indeed 301), all our pages had disappeared from Google index and rankings too (exept homepage).

The resolution came after we had our host reset the domain to www version on the server to the original state. Within days of changing that, all our deindexed pages (the whole site) jumped back into the original ranking positions in Google with www version and are re-indexed like nothing had happened.

Hope this helps someone else.

Thanks for your responses. I had meant whether we should go after Local Search Spain rather than US for last minute bookers?

Do you all mean therefore that it's only applicabe for going for local search in USA as our clients reside in USA (this could be true for advance bookings like situation 1, but what about my last minute situation 2 above)?

So I shouldn't bother with Local Search ideas for Spain (last minute US clients already in Spain searching for last minute tour etc).

I guess this is more complicated because of the international situation - would love advice for our particular international situation, unless I misunderstood.

Miriam to answer your question:
1. We have a legal business name in Spain.
2. Our real physical location in not in US. We do not have US PO box. We reside and operate from a city in Spain.
3. Our local area code phone number will be in our city in Spain, not US.
4. Last minute bookers can call into our office in Spain.

But again our incoming clients are Americans from USA, hence the question on how to approach this.