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Optimism Abounds Amongst Spain’s Hotel Chains

10 April 2017 – Expansión

Meliá, Barceló, RIU and other groups are hanging the “No vacancy” sign up in top destinations and are increasing their prices, thanks to the pull of the overseas market and the recovery in domestic tourism.

The tourism sector is on a roll and the main Spanish chains – Meliá, Barceló, Iberostar, RIU, Grupo Piñero and Palladium – are getting ready to break records once again. The positive trend in demand, the pull of international tourism in both archipelagos, and the recovery in the domestic market in regions such as Andalucía are allowing the hotel groups to hang the “No vacancy” sign up in some of their destinations, such as in the Canary Islands, and achieve occupancy rates of between 80% and 90% in the Balearic Islands and Andalucía.

Despite the uncertainty generated by Brexit, the British market remains a mainstay for the hotel chains, alongside Germany and Central Europe, in addition to the recovery in domestic demand.

For example, Meliá forecasts growth of more than 6% in its average occupancy rate in vacation hotels in Spain, as well as an improvement in prices with respect to 2016. The markets with the greatest pull for the chain owned by the Escarrer family are the British and Central European, whilst demand from domestic tourists continues its upwards trend.

Meanwhile, Barceló forecasts growth of 6% in its occupancy rate at hotels in the Balearic Islands, with an average occupancy rate of 81% and an average room rate of €110, which represents an increase of 13% with respect to the previous year. In terms of Andalucía, the volume of reservations corresponds to forecast occupancy rates of more than 90% and an improvement of 26% in prices, according to the company.

In the case of Iberostar, the hotel chain owned by the Fluxá family forecasts an occupancy rate of almost 100% over the Easter holidays. Iberostar highlights the good performance of the United Kingdom, Benelux and Germany, compared with countries in Eastern Europe, where demand is “more stagnant”.

In terms of room rates, Iberostar states that prices have improved moderately, by between 2% and 3% on average.

For RIU, the economic situation in the Canary Islands, with very high occupancy rates, means it has little margin for growth, however, there is still scope for increases at the hotels on the Costa del Sol, which have been completely refurbished this season. (…). In terms of the best markets, RIU highlights German tourists, as well as a considerable improvement in the number of reservations from Scandinavian and British clients, plus a 5% increase in domestic tourism.

Meanwhile, Palladium highlights the sweet moment that Ibiza is enjoying. “The season has opened early on the island, with a large volume of tourists visiting in April. This has been made possible by hotels opening early and new flight connections”. Overall, hotel occupancy rates have risen by 4%, whilst prices have increased by 2.5% YoY, for the time being, in line with the annual forecast increase of 7%.

Finally, Grupo Piñero says that its three hotels in Tenerife area already full, with an improvement in prices of between 4% and 8%.

Optimism

And the euphoria of the hotel chains extends beyond Easter. The large hotel groups expect to set new records in 2017. (…).

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake