Russian tourism to Spain shot up 40 percent in 2012 and 32 percent in 2013 to climb over the 1.5-million mark last year.
But numbers were down 14 percent in June, and 18 percent in July, with Spain's tourism sector now believing the drop could be even higher in August — up to 20 percent.
"The main problem is that we weren't expecting this fall and there are no other groups that take the spots we haven't sold to the Russians," the president of Spain's hotels association Juan Molas told Catalan daily La Vanguardia.
Operators say the crisis in Ukraine has shattered consumer confidence among the country's middle classes.
"On the one hand the conflict has strained relations between the European Union and (Russia). On the other hand a trip to a European destination is 17 percent more expensive for a Russian than a year ago," Delfi Torms of Barcelona-based travel firm Serhs Tourism told La Vanguardia.
Fellow tourism operator Jordi Matas with NT Incoming also highlighted the fact that Russian authorities were telling people to take their holidays at home or in countries within the Russian sphere of influence.
The fall in the number of Russian tourists to Spain is a rare piece of bad news for the country's tourism sector which has gone from strength to strength in recent times.
Spain received around 1.3 million more foreign visitors from January to April 2014 than in the same period last year, recent figures from Spanish government agency Frontur show.
The number of tourists from Germany was up 11 percent to 2.51 million, while 3.1 million Brits arrived (up 6.5 percent). In addition, 13 percent more Italians flocked to Spanish shores (0.87 million).
In 2013, Spain overtook China to become the world's third most popular destination for international tourists, by luring 60.6 million visitors.
Those visitors splashed out a new record sum of €59.08 billion ($80.82 billion) as political unrest in Turkey and northern Africa saw tourists turn their attention towards Spain.