Hotels raise prices and travel by car will become much more expensive, although tourism will not suffer in anticipation of a “complicated” autumn
Before the pandemic broke out and the tourism industry got the worst of it, the average room in Spanish hotels was billed at 82.60 euros per night, according to INE data. Now, three summers and billions lost to tourist companies later, that same room is paid for 95 euros, 15% more. These data provide a picture of the sector’s recovery, which has exceeded all expectations.
Once restrictions imposed by the pandemic are lifted, millions of foreign tourists have returned to Spain in search of the same sun and beach as before. But also interior, gastronomic and cultural plans in a context of “health safety” that was previously not taken into account and which is now “basic” when choosing our country, confirms the Spanish Confederation of Hotels and Tourist Accommodation (Chat).
The price increases allowed the hotel sector in the second quarter to surpass the income it had in the same period of 2019, despite slightly lower occupancy. The latest data from the INE indicates that in May, spending by international tourists was 8,023 million, very similar to the pre-pandemic level. In addition, the average expenditure per traveler was 1,152 euros compared to 1,028 in 2019, 12% more. On a daily basis, these average expenses rose by 26% to 177 euros.
With this data on the table, the sector is going to have a very positive summer in terms of employment, just 3% below that of 2019; and billing, with a forecast of total income per hotel room 11% higher than before the pandemic.
But in any case, the rise in tourist prices does not fully compensate for the cost increases that companies have to assume. From Exceltur, the tourist employers, they ensure that the businessmen can pass on an average of only 20% of the total cost overrun to the customers. “Despite rising prices and clearly improving the company’s profitability, the reality is that margins are lower and this recovery is not as profitable as might be expected,” explains José Luis Zoreda, executive vice president.
Zoreda stresses that the sector is “not a generator of inflationary tensions”, as they are accused, but rather a “victim” of energy and raw material cost overruns that are not fully transferred to customers. According to their figures, tourist prices rose by an average of 7% in June, compared to headline inflation of 10.2%. Most, accommodation, whose price grew 9.2% compared to the same month of 2019. But other subsectors such as air transport are even 3.5% below pre-pandemic prices.
Some additional costs that the hotel sector has to deal with, especially due to the high energy dependency, especially in the summer months. This item alone has led them to increase their spending by 34%, according to data from Cehat, which shows that the accommodation sector generally has to pay about 25% or 30% more for food, the rise in energy and labor costs , as many matches are tied to the CPI.
The best news for the sector comes from the foreign tourism side, currently close to 2019 rates and with revenues even 2.8% higher than that year, with data from Exceltur. Among the reasons for this power are the desire to travel abroad after two years of restrictions and the “attractive rates” displayed for advance reservations.
In this sense, the ‘premium’ tourist is coming back to the country and the prospects are “encouraging”, confirms Turium, an organization that promotes quality tourism in Spain. They ensure that even in summer infrequent destinations, such as Madrid, have a high occupancy rate. They explain that it is “surprising” how much time travel planning and reservations have been shortened: “The ‘last minute’ has become the general norm.” And while acknowledging that inflation isn’t helping, “we’re still competitive compared to other countries” in the prices of gastronomy, transportation or leisure for this long-distance tourist who usually spends more on his travels.
The “travel frenzy” that has erupted is unprecedented, says Exceltur’s vice president, who estimates year-end revenue for the sector at nearly 152,000 million, just 2% below 2019. For now, the poor macroeconomic context is unaffected, but Zoreda acknowledges that “the rise of summer will have to go hand in hand with a more complicated fall.” From Cehat, they indicate that the number of hotel cancellations is still 19% higher than that of 2019, but it has already halved compared to last year.
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.
