Hotel occupation up this summer

According to the Spanish Federation of Hotels and Tourist Accommodation hotel occupation increased by 5% this summer thanks to the success of strategic destinations combining ‘sun and beach’ where hotels enjoyed an average of 75% occupation compared to just 40% occupation for destinations in the interior of Spain.

In a press conference in Madrid the Chairman of the Spanish Association of Hotels , Juan Molas, said that hotel occupation was irregular in that coastal areas had registered up to 85% hotel occupation compared to just 40% for interior destinations.

Profit forecasts for the rest of the year remain low due to last minute deals and lower prices which have significantly affected the profitability of the sector. However, Molas says that he hopes that profits will increase in 2011 due to the slight increase in consumer demand and pointed out that ‘prices will only recover when demand recovers’.

Molas said he was worried about the future for interior destinations given that in recent years tourism has made a significant contribution to the economies of areas that traditional rely on ‘agriculture and farming’.

He added that ‘urgent measures’ were required in order to create alternative touristic products.

The regions which had the highest hotel occupation were the Balearic Islands (83%), Alicante (73%) and Las Palmas (70%), while the areas with the lowest hotel occupation were Guadalajara (25%), Orense, Ciudad Real and Jaen (28%).

The most popular sun and beach destinations were the Balearic Islands and the Canary Islands which saw increases of 3% and 6%. Galicia registered an increase of over 9% thanks to the success of the ‘Xacobeo’ year. Barcelona, saw an increase of 2.88%, while figures for Andalucia remained stable. Madrid, which has enjoyed successive increases since 2009, experienced an increase of 9.

19% in hotel occupation.

Molas warned that the principal reason why figures for hotel occupation had increased this summer were the flexibility in prices and the aggressive market. He mentioned the number of last minute deals which have gone up significantly but which compromise the profitability of the sector and also quality in terms of the number of staff employed. Despite the positive figures this summer Molas pointed out that they remained far from those of 2007 and 2008 years in which the sector made record profits.

The Secretary of the Association of Spanish Hotels, Ramón Estalella, said that the percentage of hotel occupation was not as important as prices and the number of visitors staying overnight. He said that five star hotels had registered a 20% increase in overnight stays as well as an increase of 11% in overall occupation.

Four star hotels had experienced a moderate increase in overnight stays compared to 2009 although figures were nowhere near those registered in 2008. The figures for three star hotels had varied less because they had hardly been affected by the downturn in hotel occupation last year.

The most profitable cities this summer were San Sebastian, Santander, Cadiz, Barcelona and Santiago de Compostela, whilst the least profitable were Murcia, Badajoz, Zaragoza, Ciudad Real and Albacete, whilst RevPar in Soria registered the biggest fall of 30%.

The most popular ‘sun and beach’ destinations were Tarifa, Marbella, Chiclana, Conil de la Frontera, Estepona and Ibiza and the most profitable were Menorca and Tarragona. ,

Almost 50% of hotels in the survey forecast a fall in the number of Spanish clients while most of them believe that the number of British, German and French clients will increase. They also forecast an increase in the number of visitors from Nordic countries, a market which has recovered well thanks to the excellent offers from TUI and Thomas Cook.

However, hoteliers say that the profitability of the sector will go down because of higher costs due to the increase in VAT in July and the increase in energy, transport and catering costs. In fact 78% of those asked believed that profits will fall compared to 60% of those asked last year.