We had thought about Morocco, but the whole north Africa situation put us off
“We had thought about Morocco, but the whole north Africa situation put us off.”
Tourist arrivals to Spain may rise the most in five years in 2011, according to research by Euromonitor International. The country’s hoteliers have reduced prices by 20 percent or more this summer to compete with destinations such as Egypt and Tunisia, where anti-government protests have deterred holidaymakers. Package tours to Spain are cheaper than those to Turkey for the first time in four years, said Ignacio Vasallo, director of the Spanish Tourist Office for the U.K. and Ireland.
“Reducing prices to secure a steady flow of guests has been the only way,” Vasallo said. This year will be the best for Spain’s hotel owners since 2007, he said, also helped by rising fuel prices, which have made it more costly for Europeans to travel to long-haul destinations for their holiday.
An index of Spanish hotel prices has dropped 30 percent since a 2008 peak and in March reached the lowest in 11 years, according to the country’s statistics office.
The cheaper prices, combined with concern over political unrest in northern Africa, are having an effect. The number of tourists visiting Spain this year may increase 8 percent to 55 million, Vasallo said. Of those, more than 40 percent would probably have booked vacations in northern Africa before the protests that started in Tunisia in January, he said.
Increasing Occupancy
Hotel occupancy in northern Africa dropped 46 percent in the four months to April, while it gained almost 6 percent in southern Europe and 7.8 percent in Spain, according to researcher STR Global. The revival in travel and tourism, which accounts for about 14 percent of Spain’s gross domestic product, will benefit hoteliers in the country’s coastal resorts, who were forced to cut prices and increase promotions to attract clients during the 2009 recession.
“Arrivals are up, occupancy is improving, but the problem is that hoteliers dropped their room prices so much in 2009 that it is going to take them an awfully long time to get them to where they were in 2007 and 2008,” said Philip Bacon, a Madrid- based consultant at hotel valuation company HVS.
Foreign arrivals to Spain will increase 3.5 percent to 54.3 million this year, Euromonitor estimates.
Arrivals to the country started to decline in 2007 and by 2010 had fallen 11 percent to 52.4 million, according to the researcher. Egyptian arrivals rose 13 percent in the same period and were 12.7 million last year, Euromonitor said.
Extra Capacity
Tui Travel Plc (TT/), Europe’s largest tour operator, is offering U.K. customers 10 percent more holidays to Spain’s Canary Islands this summer. Its nearest rival, Thomas Cook Group Plc (TCG), last month reported a 45 percent increase in summer bookings from west and east Europe to the Balearic islands and a 37 percent rise in visitors from northern Europe to the Canaries. Expedia Italy registered an average increase in its online bookings to Spain of more than 20 percent in the first quarter.
According to Euromonitor, Egypt’s foreign arrivals may take until 2013 to recover to last year’s levels. The revival at Spain’s coastal resorts may end at about the same time, it says.
While many of Spain’s holiday hotels remain independent and unbranded, international hotel chains are showing increasing interest in the country’s cities and business centers.
Marriott, Wyndham
Marriott International Inc., the largest publicly traded U.S. hotel chain, and Spain’s AC Hotels this year started a joint venture to manage and franchise a new lodging co-brand across Europe and Latin America. Wyndham Worldwide Corp. (WYN) last year said it agreed to buy the Tryp hotel brand from Palma De Mallorca-based Sol Melia SA. (SOL)
NH Hoteles SA (NHH), Spain’s largest business hotel chain, announced last month that China’s HNA Group Co. Ltd. plans to become its second-biggest investor and the preferred hotel for clients travelling with the Asian tourism company.
For tourists visiting the country, the reduced cost of a holiday is a big attraction, according to De Giorgis.
“I booked Ibiza because the price was good and I took advantage of the offer to get away to the beach,” she said.
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