The behaviour of the demand side during the first half of the year points towards a summer season similar to or even exceeding the results achieved in 2019, i.e. prior to the pandemic.
The Hotel Sector Barometer, produced jointly by STR and Cushman & Wakefield, illustrates the fact that during the first six months of the year the hotel industry has bounced back to the levels of activity recorded prior to the pandemic. Following a severe shutdown, all destinations are recovering at a greater or lesser speed on the tail of improved demand and occupancy.
The average occupancy for hotels in Spain amounted to 63% during the first half of 2022. Although this represents an improvement of 118% on the previous year, there is still some way to go to achieve the record figure of 72% registered in 2019. This improvement in occupancy has also led to hotels achieving revenue growth and better average room rates. RevPAR for Spain as a whole amounted to €77, whilst the ADR stands at €123.
The capital of the Costa del Sol reached occupancy of 75%, highlighting the fact that the city has managed to deseasonalise demand. The other top three spots were taken by Valencia and Alicante, with figures of 70% and 69% respectively. In terms of the major cities, Madrid achieved 63%, whereas occupancy grew to 66% in Barcelona. This is in contrast to figures of 29% and 26% respectively for the same period in 2021.
For Spain as a whole, occupancy growth amounted to 120% on the figure for the same period the previous year. Nevertheless, this is almost 10 percentage points below the achievements of 2019, meaning that there is still room for a continued resurgence in tourism.
According to César Escribano, STR’s Country Manager for Spain and Portugal, “the assessment is positive given that there is a clear uptrend and there remains room to improve occupancy. As a result, we should also expect a highly positive third-quarter. The pandemic is now behind us and the factors influencing the evolution of the sector have changed, inflation and the geopolitical situation now being key”.
In the same vein, Albert Grau, Partner and Co-head of Cushman & Wakefield Hospitality Spain, feels that “demand is driving the resurgence and will continue to do so at least until the end of the summer season. There is still room for improvements in revenue and average room rates before reaching the levels of 2019. This is what we are seeing in the majority of destinations during these summer months and will prove key due to inflationary pressures on operating margins”.
At 75%, Malaga achieved the highest hotel occupancy in Spain
Room rates are also recovering in line with demand and have surpassed the figures achieved in 2019 (€113 for the country as a whole). Although this growth in ADR enables part of the price increases due to inflation to be passed on, operating margins continue to shrink and this currently represents one of the greatest concerns for hotel operators.
With a figure of €248, Marbella has the highest ADR by far. It is followed by Barcelona (€146), the Balearic Islands (€139), the Canaries (€131) and Madrid (€129). The cities of Bilbao (€91) and Zaragoza (€66) are among those currently showing the lowest rates.
In the opinion of Bruno Hallé, Partner and Co-head of Cushman & Wakefield Hospitality Spain, “Pricing strategies are also being impacted by inflation and energy prices. Whilst it is currently difficult to continue passing on price increases without affecting demand, following the summer season tt will be necessary to plan the subsequent months with operating margins in mind”.
The ADR stands at €123, representing growth of some 39% in comparison with the first half of 2021
The poor figures resulting from the pandemic in 2020 and 2021 mean that a recovery of a certain degree of normality this year has led to an enormous shift in the Barometer. The hotel industry recorded RevPAR of €77 for Spain as a whole. This figure represents growth of some 203% over the €25 achieved during the first six months of the previous year. The RevPAR corresponding to the first half of 2019 was €81, €4 above the figure this year.
Marbella (€147), Barcelona (€96) and the Canary Islands (€90) topped the ranking in terms of RevPAR, followed by Malaga (€87) and Madrid (€81). At +342%, the greatest increase on the figures for 2021 was recorded in Barcelona. This illustrates the fact that this year’s recovery in international tourism and the MICE segment have played a key role, having been almost entirely non-existent last year. With +240%, Madrid has seen the second greatest growth, confirming the strong performance of the capital.
Although Granada (€53), Bilbao (€52) and Zaragoza (€40) brought up the tail end in terms of RevPAR during these first six months, the levels were similar to those of 2019.
Revenue per available room (RevPAR) shot up some 203% during the first half of the year, bringing it close to the figures seen in 2019
The Hotel Sector Barometer brings together data from 1,200 hotels and more than 150,000 rooms on the Iberian Peninsula. The study is the product of an alliance between STR, a worldwide provider of benchmarking, analytics and market knowledge specialising in the hotel sector, and Cushman & Wakefield Spain, the world leader in real estate services.