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Hotel Sector Returns To 2008 Profitability Levels

20 November 2015 – Expansión

The end of the crisis is in sight for the hotel sector, not only in terms of the number of tourists, but also in terms of revenues. “We are not only talking about record numbers in terms of visitors (foreigners), now the records in terms of overnight stays and occupancy rates are also important”, said Juan Molas, the President of the Spanish Confederation of Hotels and Tourist Accommodation (‘Confederación Española de Hoteles y Alojamientos Turísticos’ or Cehat) yesterday, as he presented the latest edition of the “Observatory for the Spanish Hotel Industry”, prepared in conjunction with PwC. This report shows that the profitability of the hotel sector has soared in the last year, in terms of both the average occupancy rate of each hotel and the price per room.

Specifically, hotel room rates rose by 6.1% during the first nine months of 2015, with respect to the same period a year earlier, up to an average of €71.50 per day, taking it to levels very close to those last seen in 2008. Moreover, the number of days that each room is occupied for each year also grew, by 3.4%. Therefore, profitability, which reflects the combination of both indicators, has grown by 9.7% in the last year and has accumulated growth of 18.7% since 2013. It is now exceeding levels last seen before the crisis.

Looking ahead to the winter season, hoteliers are more optimistic than they ever have been since the report was first prepared in 2012. Specifically, the index that analyses the expectations of the sector has risen by 35.4%, from 52.5 points in 2014 to 71.1 points now. This indicator is based on a scale of 0 to 100, where numbers above 50 points indicate an improvement in the situation with respect to previous years. Moreover, the values rise significantly in the case of average prices, where the index reaches 81.8 points, a strong increase of 44% with respect to the 56.8 points recorded in 2014. Álvaro Klecker, Partner for Tourism at PwC, says that this increase in prices has been due to an “increase in complementary services, as well as in petrol, which contains the cost of transport”, giving hotels a greater margin to raise prices.

France

On the other hand, Molas rejected the idea that the massacre in France (last Friday) would have any effect on tourism in Spain. He gave the example of the Smart City Expo World Congress, which is taking place in Barcelona at the moment. He also added that this weekend, hotels in the Spanish capital are “almost all full” because of the Madrid-Barça Classico match.

Original story: Expansión

Translation: Carmel Drake