Hoteliers in Spain are forecasting a record August in terms of tourist arrivals, with the figures for 2019 being close to those of 2019

20-08-23

• Foreign arrivals could exceed 10 million

• Revenue per available room already exceeds pre-crisis levels by 17%.

The recovery in tourism continues to accelerate. In the first half of the year, foreign tourist arrivals in Spain reached 37.5 million, close to the 38.1 million recorded in the first half of 2019 before the outbreak of the coronavirus crisis. The president of the Spanish Confederation of Hotels and Tourist Accommodation, Jorge Marichal, anticipated this morning that the arrival of travellers could exceed pre-crisis levels in August. "The data in August are very positive, especially in the number of visitors, above the data of 2022, and in some destinations close to and even above 2019″.

In the first six months of the year, there were only two months (April and May) in which pre-crisis levels were exceeded and August could be the third in view of the good occupancy levels that are being recorded in high season. "Coastal destinations have occupancies of 80% and in some destinations in the Balearic or Canary Islands they reach 85% or 90%," Marichal stressed. In August 2019, 10.1 million foreign tourists arrived in the main Spanish destinations, although the historical maximum occurred two years earlier, when 10.39 million were counted.

The lower arrival of customers compared to 2019 has been offset by the strong increase in prices and profitability, measured through the revenue obtained per occupied room, well above pre-crisis levels. The average rate charged by hotels in Spain during the first half of the year was close to 136 euros, 20.3% higher than before the coronavirus (112.8 euros), according to the latest hotel barometer prepared by Cushman & Wakefield and STR. 

Revenue per available room also shot up 17% compared to 2019 to €95.4, with five destinations above €100 (Marbella, Barcelona, Malaga, Canary Islands and Madrid).

Hoteliers, however, are defending themselves against criticism of the profits linked to the explosive recovery of tourism by countering the sharp increase in prices linked to the hyperinflationary episode, which has practically eaten up the surplus achieved by the hotel industry. The latest report by Exceltur, an organisation that includes companies such as Meliá, Riu, Iberostar and NH, put figures on this cost overrun. 

The biggest increase has been in the case of fuel, with a rise of 35.4% between the second quarter of 2023 and the same period in 2021, followed by electricity and gas (30.6%) and food and beverages (29.1%). In fourth place are financial costs, with an increase of 20.9% in twelve months, linked to the rise in interest rates and the increase in the cost of credit, and in fifth place are wage costs, with a rise of 14.9% due to the increase in remuneration in collective bargaining negotiations.

The latest increase was approved just last Friday in the framework of the new hotel and catering agreement in Malaga, which affects 105,000 workers and establishes a floor and a ceiling for wage increases between 2023 and 2027, with a minimum of 2% and a maximum of 4%. "The tension on costs continues to drive the need for tourism companies to pass them on to final sales prices to avoid the deterioration of their margins," noted Exceltur in its latest report.

In spite of this, many hotel companies argue that the rise in rates is not linked to the hyperinflationary episode, but also responds to the significant investment linked to the reforms linked to the luxury segment. This is the case of Barceló, which invested 150 million euros in refurbishment in 2022 and expects to spend 250 million euros this year between asset acquisitions and hotel repositioning.