The Easter holidays arrive with the highest prices for airline tickets and hotels on record in years. The price increase also coincides with a context of rising interest rates and generalized inflation that could predict a drop in demand for travel. But it is not so. International tourism is returning to Spain as before the pandemic and the interior is maintained, hotel chains register high occupancy rates and airlines have had to strengthen operations due to the increase in customers.
With this tailwind, euphoria has been triggered in the sector by the increase in profitability and also surprise by 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 visitors and in the travel business, with more important sales and employment in the portfolio “thanks to a demand that withstands inflation”.
In the first months of 2023, the upward trend in hotel prices continues – see the graph –, with total revenue for the entire pool of rooms 21% higher than in the winter season of 2019, according to an analysis by Cehat and PwC. Markeplace TravelgateX, which processes more than 30,000 daily bookings worldwide and more than 3 billion searches, indicates that bookings for this Easter in Spain have increased by 16.9% compared to last year, while the average daily rate for a hotel stay is 125 euros, twelve euros more than in 2022, according to its data. As for the autonomous communities with the most demand (Andalusia, Canary Islands, Catalonia, Balearic Islands, Valencian Community, Madrid and Galicia), the room rate for these days is also about 22 euros higher on average than in 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 prices. First, an economic situation that, although with challenges, resists. “The employment data in the main countries sending travelers – points out 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 tourism offer” and the crisis situation in competing countries – France with the wave of social protests or Turkey with the recent earthquakes – benefits the companies in the sector. “Spain has become a refuge destination”, says 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 terms of demand and 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 points out that prices in 2023 are benefiting “from the increase in advance demand”. “As a result of this, we expect an increase of around 20% in the city of Barcelona compared to 2019, and an increase of between 25% and 30% compared to 2022. Across Catalonia, the increase in comparison by 2022 it will be between 15% and 20%”, says the executive.
At Palladium (19 hotels in Spain, 40 in total) they describe Easter as “positive” and predict occupancy 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 for the total number of rooms”, says Sergio Zertuche, Sales Director of the Palladium hotel group.
Hesperia (22 hotels in Spain) calculates an average rate of 16% higher than in 2022, while revenue for total rooms is 70% higher, “mainly thanks to occupancy rates that will reach 90%”. they indicate from the company.
Getting on a plane is also more expensive after the pandemic, and yet the recovery in demand continues to grow. The flights planned at Spanish airports for next week almost match the figures for 2019, with 60,498 operations planned by Aena. Companies such as Vueling and Iberia have strengthened their routes. “Air capacity for international arrivals in Spain is practically at pre-pandemic levels, only 1% below 2019; on the other hand, the number of seats for domestic flights grew by 13%”, explains Juan A. Gómez, Head of Market Intelligence at ForwardKeys, a tourist 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 of 2019, 20% in the case of the whole continent, indicate the analyzes of this company. For this Easter, flights cost 25% more on average than before the pandemic, they add from ForwardKeys. Kayak, for its part, puts the price increase for flying 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. The summer, according to those consulted, points in the same direction. The goal of surpassing the 87,061 million euros in tourism expenditure by international tourists last year seems feasible.
