The first half of 2020 has been the worst in recent decades due to a health emergency that brings an end to a long upward cycle. This is certified by the Barometer of the Hotel Sector in Spain, prepared by STR and Cushman & Wakefiel. The data in this study has been carried out based on the hotels that are currently open and that report data to STR (reporting), which represents 37% of the total participation in normal conditions prior to the pandemic (more than 1,200 hotels) .
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Although the accumulated figures for the first semester show the effects of the closure of hotels in most of the country for almost three months, the beginning of the period of de-escalation towards the new reality has reestablished some activity, with the resumption of domestic trips and the opening of the borders. Obviously the sector is still very far from the figures achieved in 2019, but a certain recovery can be seen from the middle of June.
In the words of Javier Serrano, STR's country manager for Spain and Portugal, “the domestic demand, mainly for leisure, and especially during the weekends, constitutes the first stone for recovery. As an example, occupancy levels at the end of June stood at 19%, which indicates a restart of activity. Obviously, this figure represents a drop of 77.2% compared to the same month last year, when occupancy reached 83% in all Spanish hotels. Although, according to Javier Serrano, "the road to recovery is linked to the evolution of the pandemic, but the sector has already begun to move in the right direction to take the path of a recovery that will inevitably be long."
Occupancy in the first semester was 33%
The first six months of the year has placed the occupancy in Spanish hotels at 33%, with a drop of 54.8% compared to the 73% registered in the same period of 2019. When analyzing market by market, the destinations with The best occupancy rates were Malaga and the Canary Islands, with 47% and 44.5% respectively. On the other side of the balance appear the occupations of the Balearic Islands (21.2%) or Barcelona (32.5%). For its part, Madrid has placed occupancy at 41.2%, above the Spanish average.
For Albert Grau, partner and co-director of Cushman & Wakefield Hospitality in Spain, the Barometer data “reflects that the entire sector has suffered the pandemic equally, but the rate of recovery can be very different between different destinations. At this time, the holiday sector on the peninsula, less dependent on international tourism, can better cope with the season, while in urban destinations and island destinations it may be that many establishments remain closed until September or even the end of the year due to lack of demand ".
In this sense, the data obtained in June should be highlighted. Once some hotels have been reopened in the main Spanish markets (this data comes from open hotels that report data) it is between the levels of 10% and 40%, although this data compared with the total inventory of hotels that reported data to STR As of January 31, 2020, they show that the actual occupancy is between 5% and 20%.
According to Javier Serrano, “The main regional markets (Andalusia, Mediterranean Coast, Northeast and Northwest Spain) are recovering faster than the main urban markets and islands, with occupancy levels between 20% and 35%, compared to the urban ones (Madrid and Barcelona), which is around 10%, or the vacation of the Islands (Canary and Balearic Islands), which is in the range of 20%. Avoiding crossing borders, looking for more isolated destinations, and not depending on means of transport to third parties such as airlines and being able to access by car, for example, are the reasons for this push from regional markets ”.
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The average daily price falls by 16% in the whole of Spain
From January to June, the average daily price of Spanish hotels fell by 16%. Destinations such as Marbella, with a drop of 30%, Seville, of 23% or the Balearic Islands, of 27%, are the main markets that so far have had a greater negative impact on the price per room sold.
For Albert Grau, “the data reflect a logical evolution in a situation like the current one. The downward pressure on prices to maintain occupation may be the protagonist in the coming months. The hoteliers and all the administrations must continue working to attract tourism through a quality strategy that should not be truncated because of the unfavorable context ”.
RevPAR is down 62% so far this year
Revenue per available room (RevPAR) has registered a decline of 62% so far this year, falling from € 79 registered in 2019 to € 30 in 2020. On this occasion, the revenue figure is fully conditioned to occupancy drops during the months when hotels have been closed across the country. The greatest decrease in RevPAR has been registered in the Balearic Islands, 75% less, while the destination where it has fallen the least is Zaragoza (31.5%) followed by the Canary Islands (39.5%).
For Albert Grau, “the hotel fabric in Spain is very diverse and it is still too early to understand how revenues can evolve in each segment. If employment grows but prices are pressured down, we will see how revenues can have a longer recovery path ”.