Hotel Revenues Soar Thanks To Tourism Boom
17 May 2016 – Expansión
Spain’s large hotel groups are preparing for another record year after figures for the start of 2016 have confirmed that the tourism boom is continuing across the peninsula. The volume of international tourists grew by 4.4% between January and April, to 16 million, which together with the successful Easter period and the continuation of the recovery in domestic demand, means that experts are forecasting a better summer season than in 2015 and another record year.
Last year, Spain received 68.1 million international tourists, up by 4.9%, which boosted the business of the main Spanish hotel chains. Barceló, RIU, Melià and Iberostar took advantage of the situation, favoured by instability in rival countries such as Turkey and Egypt, and closed 2015 with double-digit revenue growth. In 2016, profitability will continue to rise thanks to the continuation of the favourable environment and the fact that the chains are accelerating their entry into new markets, as well as remodelling their hotels.
Iberostar’s revenues soared by 29% to €1,847 million and it was the hotel chain that improved the most. The company owned by the Fluxá family will open six new properties in 2016 and will spend €90 million renovating its hotels.
Meliá’s turnover grew by 16.3% to €1,738 million, whilst Barceló generated revenues of €2,480 million in 2015, representing growth of 20.6%, and a net profit of €100.2 million, up by 116%. It was the most profitable Spanish hotel chain. This year the group expects to see improvements across all of the regions in which it operates. Specifically, its objective for 2016 includes generating EBITDA of around €326 million and a net profit of €125 million.
In the case of RIU, its revenues grew by 14% to €1,848 million. The company has announced its intention to invest €390 million in 2016 with the opening of four hotels and the complete refurbishment of another eight.
Meanwhile, last year Palladium recorded revenues of more than €500 million for the first time in its history, up by 20% compared with 2014. The chain owned by the former minister Abel Matutes plans to create 1,300 jobs in Spain and 300 in America. The group is undergoing an expansion process in Latin America, which includes opening new hotels in Jamaica and Mexico, with a committed investment of between €800 million and €900 million over five years.
According to the Chairman of Cehat, Juan Molas, who confirmed the current trend, 2016 is going to be a “very good year”, thanks to traditional markets, such as the UK, German and French and the recovery of the Russian Market, which had declined somewhat in recent years. In addition, new routes to Asian countries may boost alternative tourism besides the traditional sun and beach segment.
Meanwhile, the Chairman of Ceav, Rafael Gallego, said that some destinations, such as the Balearic Islands, Costa del Sol and Levante, are already close to overbooking. Instability in countries that compete with Spain, such as Turkey, is contributing to this record; as is the parity of the dollar with the euro, which makes Caribbean destinations less attractive; and the price of oil.
Original story: Expansión (by Rebeca Arroyo)
Translation: Carmel Drake