Tourist Sector Warning: We Could Lose €62.4bn if the Coronavirus Crisis is Prolonged

Activity relating to tourism has come to a complete standstill as a consequence of the pandemic with restrictions on the movement of people, the closure of hotels, ERTEs, and the mass cancellation of accommodation, events and flights.

Last year, Spain registered a record number of visitors for the seventh year in a row welcoming 83.7 million tourists in total, up by 1.1% compared to 2018, according to data from the National Institute of Statistics (INE). However, it seems that the trend will be disrupted this year by the paralysis of activity in the tourist sector as a consequence of the coronavirus. Players in this segment of the economy, which accounts for 12% of total GDP, warn that the measures adopted by the Government are “insufficient” and that this crisis will take its toll.

Effects of the measures on the tourism sector

The tourism sector has been one of the hardest hit by the pandemic with restrictions on the movement of people, the gradual closure of borders, ERTEs, the mass cancellation of accommodation, programs such as Imserso, events and flights, and, finally, the mandatory closure of hotels and all other types of tourist accommodation. To alleviate the fallout, on 12 March, the Government announced a series of measures through a decree-law. They included the approval of a line of credit from the Official Credit Institute (ICO) amounting to €400 million for transport and hospitality companies; meanwhile, the Social Security allowances for permanent seasonal contractors were extended.

Overnight Hotel Stays Rose by 6.8% in February, Driven by an Increase in Domestic Travellers

Andalucía, the Community of Madrid and the Community of Valencia were the main destinations for Spaniards in February; meanwhile, foreigners opted for the Canary Islands, according to data from INE.

Spain’s hotels registered more than 17.7 million overnight stays in February, up by 6.8% compared to the same month a year earlier, according to provisional data published on Monday by the National Institute of Statistics (INE). INE noted that the month of February had one more weekend in 2020 than it did in 2019.

The increase, which does not yet reflect the impact of the coronavirus, was a consequence of a 9.8% increase in overnight stays by Spaniards and a 4.8% increase in those made by foreigners.

With the rise in February, overnight stays in hotel establishments continued their year-on-year growth trajectory following increases of 0.5% in November, 1.5% in December and 2.9% in January.

However, hotels invoiced 83.70 euros per occupied room, on average, in February, which represented an annual decrease of 0.7%. The average duration of stays also decreased, by 0.9%, compared with February 2019, to 2.7 nights per traveller.

Madrid to Convert 7 Hotels into Temporary Medical Centres to Alleviate the Hospitals

In order to take some pressure off of the health system, the Community of Madrid is going to convert more than 40 hotels, with a capacity of 9,000 beds, into medical centres.

The Community of Madrid is going to convert seven more hotels into medical centres to take some of the pressure off of its hospitals. The first medicalised hotel in Spain, the Ayre Gran Hotel Colón, opened last Thursday, and the second, the Marriott Auditorium opened on Saturday for patients from the Corredor de Henares hospitals, according to the regional executive.

To alleviate the health system, the Community of Madrid is going to convert more than 40 hotels, with a capacity of 9,000 beds, for those patients whose symptoms require medical attention but who do not need to be admitted to hospital, both at the beginning and end phases of the disease.

Over the next few days, three hotels in the city of Madrid will become medical centres: the Vía Castellana, to serve patients from the La Paz Hospital; the Ilunion Atrium, to take patients from the Ramón y Cajal Hospital; and the Miguel Ángel Hotel to accommodate patients from the Clínico San Carlos, Cruz Roja and Fundación Jiménez Díaz hospitals.

Merlin Waives 100% of the Rental Payments from Shops and Hotels Closed by Covid-19

The firm led by Ismael Clemente has started to communicate this decision, which will benefit 77% of its tenants in the retail segment.

Merlin Properties, the largest Socimi in Spain, has decided to waive 100% of the rental payments from the shops and hotels that it has as tenants whose activity the Government has ordered to close, under the measures imposed as a result of the state of emergency, according to El Confidencial.

The firm led by Ismael Clemente has started to communicate this decision by telephone and by letter. It will benefit 77% of the Socimi’s tenants in the retail segment and the two hotels that it holds in its portfolio: the Novotel, located in a mixed-use building, which it owns on Calle Diagonal 199 in Barcelona and the Eurostars located in one of the Cuatro Torres in Madrid, which it shares with the professional services firm PwC.

The Government Orders the Closure of Hotels and other Short-Term Accommodation Within a Week

The Executive has ordered the closure of these types of establishment as soon they “no longer have any clients to attend to and, in any case, within a maximum period of seven calendar days.”

The Government has authorised the closure of all hotels and tourist accommodation within a maximum period of one week, to complement the measures already taken to stop the expansion of the coronavirus. The Ministry of Health published this legislation in an extraordinary Official State Gazette (BOE) under the framework of the declaration of the state of emergency due to the impact of Covid-19.

The new rule, which came into force on Thursday, establishes this preventive measure for all hotels and similar accommodation, as well as for tourist and other short-stay accommodation, campsites, caravan parks and other similar establishments, located anywhere in the country. The Executive has ordered the closure of all these types of establishments as soon as they “no longer have any clients to attend to and, in any case, within a maximum period of seven calendar days” from the entry into force of the rule on 19 March.

Socimis and Large Funds will Cut the Rents for Hotels and Commercial Tenants

Hotel, restaurants and textile chains are asking to negotiate the conditions of their rental contracts and are proposing rent waivers, moratoriums and discounts for the duration of the state of emergency due to Covid-19.

Hotel groups, restaurants and textile chains have started to ask their landlords to negotiate the conditions of their rental contracts and to propose rent moratoriums and discounts, at least for the duration of the state of emergency decreed by the Government to try to put a stop to Covid-19.

This would affect Socimis that own shopping centres, such as Merlin, Lar España, Castellana Properties and General de Galerías Comerciales; other retail giants, such as Sonae Sierra and Unibail Romanco-Westfield – which have already announced that the coronavirus pandemic has affected their centres. It would also impact funds such as Blackstone, which owns a high-profile hotel portfolio following its purchase of Hispania, which it controls through HIP; and property managers such as Azora, which will have to review their business plans and adapt their commercial policies with their tenants.

Hoteliers Offer Their Properties for Those Affected by Coronavirus

The hotel chains Room Mate and Ayre are offering their hotels in the capital to help those affected by the coronavirus.

Yesterday, Isabel Díaz Ayuso, the President of the Community of Madrid, announced that hotels, exhibition halls and nursing homes will be turned into medical facilities to treat mild cases as part of an effort to offer temporary specialist care between the home and the hospital.

Hours beforehand, the CEOs of the hotel chains Room Mate and Ayre announced on social media that they would make various hotels in Madrid available for the authorities to use to accommodate those affected by coronavirus. Kike Sarasola, President and founder of Room Mate Hoteles tweeted: “I am making two of my hotels available in Madrid to accommodate all the cases necessary in the face of this health crisis.”

His colleague Abel Matutes Prats is doing the same.

 

Hoteliers Ask to Postpone Social Security and Tax Payments Due to the Coronavirus

In light of the coronavirus crisis, the CEHAT has asked that hotel owners be allowed to postpone their Social Security payments for a period of no less than three months, without surcharges or interest.

In the face of the coronavirus crisis, the Spanish Confederation of Hotels and Tourist Accommodations (CEHAT) has requested that hoteliers be allowed to defer their Social Security payments for a period of no less than three months, without surcharges or interest.

In order to guarantee the liquidity of its member companies, it has also requested the postponement of local tax payments, such as IBI, IAE and municipal taxes. In a statement, the CEHAT expressed its absolute support for the measures adopted by the authorities to try to detain the coronavirus, such as the suspension of Imserso travel. At the same time, it demanded that the State implement a package of urgent measures to mitigate the economic impact that this health crisis is having in a very direct way on the national tourism sector.

 

Hotel W Madrid Postpones its Opening until 2022 Due to the Sale of the Building to Millenium

The hotel was due to be inaugurated in 2021, but that date has been delayed by a few months due to the negotiation of the terms of the contract between Millenium and Marriott.

The exclusive W Madrid Hotel is going to open its doors during the first quarter of 2022 and not at the end of 2021 as planned. The reason for the delay is the negotiation of the terms of the contract between Millenium, the new owner of the hotel, and Marriott, the future operator, according to the Socimi in its annual results.

The firm led by Javier Illán bought the property last October for €82 million from the Platinum group, led by the Indian Mohinani family, which had previously reached an agreement with the Starwood group to open the first W Hotel in Madrid in the building.

The future W Madrid will be located in the Spanish capital’s Plaza de Canalejas and will have 144 rooms spread over more than 10,000 square metres.

Frederick Barclay Threatens to Sue his Twin Brother if he Sells the Ritz Hotel in London

Frederick Barclay will take legal action against the family of his brother David if they sell the Ritz for GBP 750 million since he has received two offers amounting to more than GBP 1,000 million.

Frederick Barclay has threatened to sue the family of his twin brother David, if they try to sell the Ritz Hotel in London for less than GBP 1,000 million (about €1,155 million), according to The Guardian.

The luxury five-star Ritz Hotel is considered one of the jewels in the crown of assets owned by the billionaire Barclay family. Its sale could be imminent given that a private investment company from Saudi Arabia is reportedly willing to pay around GBP 750 million (€866 million) for the property.

However, Frederick does not want to sell the 114-year-old hotel because he has received at least two offers for the hotel and the properties associated with the offices of William Kent House and Aldridge Street, which exceed GBP 1,000 million.