The Easter holidays arrive with the highest prices for plane tickets and hotels registered in years. The increase in prices also coincides with a context of rising rates and generalized inflation that could lead to a drop in demand for travel. But it’s not like that. International tourism returns to Spain as before the pandemic and the interior is maintained, hotel chains register high occupancy and airlines have had to strengthen their operations due to the increase in customers.
With this tailwind, euphoria has been unleashed in the sector due to the increase in profitability and also surprise due to the strength of demand. The explanation they find: the covid crisis has given rise to a more hedonistic society, willing to spend to enjoy life.
The Spanish Confederation of Hotels and Tourist Accommodations (Cehat) and the consulting firm PwC point out that the tourist season starts with better prospects than 2019, a year of historical record in the travel business, with higher sales and portfolio occupancy “thanks to a demand that withstands inflation.
In the first months of 2023, the upward trend in hotel prices continues –see graph–, with total revenues for the total number of rooms 21% higher than in the winter season of 2019, indicates an analysis by Cehat and PwC. The TravelgateX marketplace, which processes more than 30,000 daily reservations worldwide and more than 3,000 million searches, indicates that reservations for this Holy Week in Spain have increased by 16.9% compared to last year, while the average rate daily for a hotel room stands at 125 euros, twelve euros more than in 2022, according to their data. As for the autonomous communities with the most demand (Andalusia, the Canary Islands, Catalonia, the Balearic Islands, the Valencian Community, Madrid and Galicia), the room rate for these days is also about 22 euros on average above that of 2019.
Apart from the desire to travel, Jorge Marichal, president of Cehat, underlines other key factors that have accelerated tourist demand despite the increase in the supply. First, an economic situation that, although with challenges, resists. “The employment data in the main countries that issue travelers – says Marichal – are not negative†and inflation in Spain is below that of other European economies. All this, together with an “improvement in the quality of the Spanish tourist offer” and the crisis situation in competing countries –France with the wave of social protests or Turkey with the recent earthquakes– benefits companies in the industry. “Spain has become a refuge destinationâ€, comments the president of Cehat.
Some of the main hotel chains thus predict an extraordinary season. “We are facing a record Easter in all indicators”, both in demand and in the average daily rate (10% more than in 2022), they say from Riu, with 27 hotels in Spain (96 hotels in the world). José RodrÃguez Pousa, CEO of Sercotel (114 hotels in Spain) agrees with the diagnosis and highlights that prices in 2023 are benefiting “from the increase in anticipation of demand”. “As a consequence of this, we expect an increase of around 20% in Barcelona city compared to 2019 and an increase of between 25% and 30% compared to 2022. Throughout Catalonia, the increase compared to 2022 is between 15% and 20%â€, says the CEO.
In Palladium (19 hotels in Spain, 40 in total) they qualify Easter as “positive” and predict occupancy rates of over 65% in hotels operating in Spain and 80% globally. “These figures represent a certain increase compared to 2022 and 2019. Additionally, we anticipate a 15% increase in revenue from total rooms,” says Sergio Zertuche, Director of Sales for the Palladium hotel group. Hesperia (22 hotels in Spain) calculates an average rate of 16% higher than in 2022, while its income from total rooms is 70% higher, “especially thanks to the occupancy ratios, which will reach 90% â€, they point out from the company.
Getting on a plane is also getting more expensive post-pandemic, yet the demand recovery is still in upward mode. The flights planned at Spanish airports for the next week almost equal the figures for 2019, with 60,498 operations planned by Aena. Companies like Vueling or Iberia have also strengthened their routes. “Air capacity for international arrivals to Spain is practically at pre-pandemic levels, only 1% below 2019; on the other hand, the number of seats for domestic flights grows by 13%â€, explains Juan A. Gómez, head of market intelligence at ForwardKeys, a tourism intelligence consultancy.
Prices are growing in double digits: buying a ticket to travel to Spain from Europe in the first three months of the year has been 26% more expensive than in the same period in 2019, 20% in the case of the continent as a whole, they indicate analysis of this company. For this Easter, flights cost 25% more on average than before the pandemic, they add from ForwardKeys. Kayak, for its part, estimates the price increase to fly within Spain at 13% compared to 2022, 7% compared to four years ago. Even Ryanair has increased fares.
But the planes are practically full, and with each passing day it costs more to find a hotel room for the next week. Summer, indicate those consulted, points in the same direction. The goal of exceeding 87,061 million euros in tourist spending by international tourists last year seems feasible.
