The draft protocol for the reopening of hotels, presented to the Government on Thursday and pending approval by the Ministry of Health, does not establish percentages or limits in terms of capacity.
On Thursday, the draft protocol for the reopening for hotels and tourist apartments, prepared by the Institute for Spanish Tourist Quality (ICTE), in collaboration with the hotel employer Cehat and the Secretary of State for Tourism, which has been the great proponent behind the creation of a single health protocol, was presented to the Government. Regional sector organisations, hotel chains and companies have also participated in its preparation.
Now, this unique guide, which aims to unify the guidelines for the reopening of accommodation establishments, only needs to be approved by the Ministry of Health, which is expected to happen this week. On Monday, 11 May – when phase 1 of the exit from lockdown begins for most regions – hotels will be able to reopen their doors, although in accordance with certain conditions.
The objective is to unify the guidelines to be followed for the reopening of hotels, to provide certainty and confidence to customers and hoteliers.
The Technological Hotel Institute (ITH), together with the Spanish Confederation of Hotels and Tourist Accommodation (CEHAT), will publish guidelines for the reopening of the hotel sector on 8 May.
In phase 1 of the exit from lockdown – which begins on Monday 11 May – hotel establishments will be allowed to open their doors; therefore, the presentation of this protocol has been brought forward so that hoteliers can restart their activity with the necessary guarantees in place.
The current situation has led hoteliers in Benidorm to consider the option of not opening their establishments until 2021 since their income will not cover their expenses.
The current situation has led hoteliers in Benidorm to consider the option of not opening their establishments until 2021, or to open only a small part of them, so as not to incur greater losses due to the lack of footfall, to be able to cover the bare minimum of their operating costs.
This has been highlighted by Exceltur, which has affirmed that this destination, like the Balearic Islands, depends a lot on foreign tourism. The restriction of intra-European traffic for the next few months, the late relaxation of measures in the tourism sector and the implementation of health security measures on beaches will be very dissuasive for tourists. The consequences could be lethal and will affect tourism activity more than any other sector of the Spanish economy.
Elaia Investment considers that it is ‘extremely difficult’ to evaluate the impact of the pandemic crisis on its business this year.
The Socimi Elaia, which specialises in hotel assets, closed 2019 with a profit of €5.2 million, whereby doubling the result recorded in the previous year, when it earned €2.4 million. Elaia considers that it is “extremely difficult” to evaluate the impact of the pandemic crisis on its business this year.
The divestment process of the company, which is controlled by the Luxembourg group Batipart, has a lot to do with these results. Swiss Life Asset Managers acquired two hotels in Mallorca -Icon Valparaíso and Vistama-, one hotel in Gerona (Monterrey) and an apartment complex in Menorca (Eden Binibeca), which according to market sources are worth more than €50 million.
The progressive opening of the sector by December would result in losses of €124 billion. In that case, the recovery of the industry would not arrive until the first four months of next year.
Spanish hoteliers are warning that keeping their establishments closed until the end of the year is “inconceivable ” and that this would mean a loss of competitiveness for the sector. “In Spain, the progressive opening of the sector by December would result in losses of €124 billion. That would be devastating for the sector,” explained Gabriel Escarrer, CEO of Meliá, according to Expansión.
For Escarrer, this scenario assumes that the recovery of the industry would not come until the first four months of next year, meaning it may “lose out” on Christmas 2020 and Easter 2021, both key dates in the hotel industry.
Hotel occupancy rates fell by more than 45% in March, after just 15 days of confinement, and the average revenue per room decreased by 41%.
On Thursday, Spain’s National Institute of Statistics (INE) published the first official figures showing the impact of the coronavirus on the Spanish tourism market. According to this data, in the month of March alone, with lockdown measures decreed on the 14th of the month following the State of Emergency, hotels in Spain saw a 41% decrease in their revenues, whilst occupancy rates fell by more than 45%.
In March, the average daily revenue per available room (RevPAR) -which is determined by the occupancy rates recorded in hotel establishments- stood at €29.7, down by 41% compared to the same period in 2019. The average daily rate for each occupied hotel room (ADR) was €78 in March, which represents a decrease of 4.2% compared to the same month of 2019.
Analysts at the British bank expect large European hotel chains, such as IHG and Accor, to see a 50% reduction in their revenues.
The European Union’s hotel industry will take three to four years to return to the profitability levels recorded in 2019, according to a report by Barclays.
“That forecast is based on the sharp deterioration that private investment and employment are expected to suffer in the short term, which are the factors that most affect profitability. It will be compounded by the fact that borders will now be closed for longer than originally expected in order to guarantee safety during the health crisis”, stresses the study.
The regional government estimates that 74 projects involving a total investment of €1.6 billion are awaiting the new legislation, which will regulate the classification of hotels in Andalucía.
Help the hotel sector by introducing legislation that will attract investors. That is the ultimate goal of the Andalucían Government, which has decided to continue to process new legislation for the hotel industry in the region.
According to the region’s Minister of Tourism, Regeneration, Justice and Local Administration, Juan Marín, the regional hotel regulation decree will not be affected by the cessation in rule-making due to the State of Emergency decreed as a result of the coronavirus pandemic. “We have managed to reactivate it remotely by recovering legal reports from the Ministry and by speeding up the launch for the approval of the hotel decree to guarantee significant investment in the sector over the coming years,” said Marín.
9 January 2020 – Eje Prime
Vivenio and the hotel Socimis drove the MAB in 2019. The Socimi controlled by Renta Corporación, plus Millenium Hoteles and Atom Hoteles together invested €543 million in new acquisitions during 2019. That figure accounted for 71.2% of all the funds spent on asset purchases by the MAB’s Socimis during the year.
Specifically, Vivenio invested €234 million, including €75.5 million on some of the Operación Calderón plots; Millenium closed 3 operations amounting to €192.4 million, including the purchase of 2 buildings in central Madrid which it is going to convert into a 5-star hotel; and Atom Hoteles spent €116.6 million on 5 hotels in Madrid, A Coruña, Cádiz, Tenerife and Gran Canaria.
In total, all of the Socimis on the MAB spent €762.1 million on the purchase of assets during 2019, up by 34.1% compared to 2018.
Original story: Eje Prime (by Marc Vidal Ordeig)
Translation/Summary: Carmel Drake