Exceltur warns that despite the rise in hotel and transport prices, business people are losing margin due to the increase in the costs they assume
“An unprecedented travel frenzy has been unleashed.” This is how the good situation of the tourism sector is defined by one of its greatest representatives, the Vice President of Exceltur, José Luis Zoreda. Employers’ forecasts are optimistic: tourism GDP will end the year with 98% activity compared to the record year 2019, with EUR 151,798 million in activity, 10,000 million more than what was estimated just three months ago.
And these good numbers are due to how well the second and third quarters of the year are behaving at the tourism level. “The desire to travel is stronger than the macroeconomic conditions,” they assure of the employers, confirming that there is a “very strong seized demand” due to the pandemic, which hit the Canary Islands in the first part. of the year and the rest of Spain from Easter.
In addition, for the fourth quarter, the employer is denying the bad omens of some voices that indicate inflation will cause a total stagnation of travel. Still, Exceltur predicts a “slowdown” in growth in the second half of the year. Specifically, they predict that after 1.1% growth in the second quarter and 2% in the third, there will still be a 3.2% decline in the fourth. “The outlook is not bad today, although it is true that the rise of the summer will have to go hand in hand with a more complicated autumn,” Zoreda noted while presenting his report.
Moreover, in terms of tourist prices, employers have not seen an increase in any branches of the sector beyond headline inflation (10.2% in June, according to data from INE). In fact, from Exceltur they assure that entrepreneurs will have to reduce their profit margins due to the increase in energy costs and raw materials, which they do not fully transfer to the end customer.
This, along with the high indebtedness of many of these companies “after the industry has lost 174,000 million due to the pandemic”, means most are using the revenue generated to repay loans that are already beginning to mature.
Source: La Verdad
I’m Wayne Wickman, a professional journalist and author for Today Times Live. My specialty is covering global news and current events, offering readers a unique perspective on the world’s most pressing issues. I’m passionate about storytelling and helping people stay informed on the goings-on of our planet.
