Hotels continue to raise prices and move towards a summer of record rates

by time news

2023-04-25 08:41:22

Tourism accelerates towards a record year. The revival of the tourism industry is headed towards historic levels boosted by the boom in demand from national tourists and now also foreign ones, and also driven by the rise in prices that the sector has embarked on as an inflationary wave.

Los Hotels Spaniards accumulate two years of increases in their rates after the stoppage due to the pandemic in the midst of a consumer boom, which is not being affected by the uncertainties and fears that existed due to the economic impact of the war, the blow to inflation or the rise in interest rates. And after two years of increases, the sector assumes that the increases will continue in the coming years and that the summer will reach record rates due to the historical demand that is expected for the high season.

The establishments hoteliers raised their prices another 11% in March in relation to the same month last year (when they already applied an increase of almost 35%), reaching an average income for each occupied room of 99.32 euros per night, according to the latest data published by the National Institute of Statistics ( INE). In the same month last year the average rate was 89.05 euros and in 2019 prior to the pandemic it was 80.92 euros.

By category, five-star hotels raised their rates last month, even prior to the celebration of Easter, by 14%, reaching an average billing of 231 euros per room per night; those with four stars raised them by 9%, up to 102 euros; and those of three raised them by more than 13%; up to 76 euros.

Heading for the most expensive summer?

It is in the months of high summer season when the highest prices are concentrated in hotel establishments, as they are the ones with the greatest general demand in the destination Spain. In the summer of last year, the average rates in the hotel sector were 121 euros per night in July, almost 128 euros in August and 107 euros in September, according to INE records).

The forecasts that are used in the hotel sector do not anticipate that the demand will slacken in the coming months and, if there are no unexpected economic or financial shocks, during the summer season consumption will continue to rise and prices will also continue to grow, until they reach record levels.

In parallel, a key indicator in the tourism sector to measure the real evolution of the business and profitability is the revenue per available room (RevPar), which serves to calibrate both prices and occupancy and which also accumulates two consecutive years of rising month by month. Spanish hotels raised their RevPar in March to above 62 euros, thereby raising the figure for last year by almost 24% and exceeding the 2019 pre-pandemic level by 23%.

Prices and costs

Tourism companies confirm significant increases in their turnover thanks to the upturn in activity and also to the rise in prices in the midst of a wave of inflation. The tourism sector -including all branches of activity, not just hotels- has raised its prices by an average of 7.7% in the first quarter of the year, and the industry predicts that the rate review will be adjusted until the end of the year. the whole of the year with increases of between 3 and 4%.

“Fortunately, companies are able to raise prices,” sums up José Luis Zoreda, executive vice president of He is exaltedthe lobby that brings together some thirty of the largest companies in the sector (such as Meliá, NH, Iberia, Globalia, Iberostar or Amadeus). The business association sees the rise in rates as a symptom of the good progress of activity in the sector.

For the sectoral lobby the price increase responds to the need to respond to the increase in costs due to inflation, to the marketing of higher quality products and added value after repositioning them in higher ranges, and to the needs of the groups to meet the payment of the debt accumulated during the pandemic.

Despite the improvement in sales and the fact that demand continues to grow despite the rise in prices, Exceltur warns that this boom is not translating into increases in profitability for many companies due to the sharp rise in operating costs caused by rising inflation. The business association stresses that companies are only getting pass on your rates by 20% the increase in their costs.

According to estimates by the sector lobby, the energy costs borne by tourism companies have still risen by 17.4% in the first quarter of 2023, the cost of other supplies has grown by 14.3% and wage costs have done so by 7.8%. Meanwhile, the average increase in prices in the sector has been 7.7%, according to INE data.

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