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Spain's Occupancy Dip Is no Barometer for Summer

Spanish occupancy declined about 9 percent for the Easter holidays, but the summer forecast is still hazy.
HNN contributor
April 23, 2009 | 12:12 AM

MADRID—Economic woes took their toll on occupancy rates for Spanish hotels and rural accommodations during the country’s important Easter holiday, as hoteliers scrambled to cut prices to attract cash-strapped guests. Yet, it’s too early to tell whether the summer could be disappointing, too.

“Average occupancy during Easter week was around 75 percent, or between 8 and 10 percent less than the previous year, and this was in line with our expectations,” stated the Confederation of Spanish Hotels and Tourist Accommodations. “The current economic situation affected the average stay and prices, which were down 10 percent compared to last year.”

Easter week, especially the last four days that include the national holidays of Holy Thursday and Good Friday, is a popular time for Spaniards to shake off the winter blues and head for the beach or the many cities where traditional religious processions are held. The week usually accounts for between 3 percent and 4 percent of hoteliers’ annual income.

Bright spots

Despite the downturn—which, in northern Spain, was blamed on bad weather causing guests to cancel or return home early—a few regions registered more visitors this year than last or held steady. Occupancy rates at seaside hotels along the Costa del Sol in the southern region of Andalusia averaged 75 percent, an increase of 7.7 percent compared to a year ago. Occupancy at hotels on the adjoining Costa de la Luz averaged 82 percent compared to 65 percent in 2008.

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Xisco Martínez

Xisco Martínez, commercial director for Iberostar Hotels and Resorts in Spain, said the company’s properties in Andalusia performed well during the week, posting 97 percent occupancy, which is a 10-percent increase compared to last year. Iberostar hotels on the Balearic island of Majorca and in the Canary Islands registered occupancy rates of 85 percent and 73 percent, respectively. “It has been very good for the hotels that were open,” Martínez said, adding that all-inclusive packages sold extremely well.

In the Andalusian city of Seville, which hosts the country’s largest and best-known religious processions, occupancy rates and prices were better than in 2008, said José Luis Barroso, general manager of the Petit Palace chain’s Marqués de Santa Ana Hotel.

“We’re a boutique hotel with upscale clients, so the financial crisis doesn’t really affect them as much,” he said. “Also, our hotel is located near the cathedral and along routes of several processions, so that certainly helped our occupancy.”

In the northeastern region of Catalonia, occupancy rates declined slightly at the usually teeming beach resorts of the Costa Brava. But occupancy on the nearby Costa Dorada increased 10 percent. Barcelona hotels averaged 80 percent, similar to last year, city officials said.

“Most of our visitors were Spaniards, and the influx of foreigners wasn’t very good,” said Jordi Carnes, Barcelona’s deputy mayor for economic promotion.

His comment echoed others in the area who said the number of visitors from abroad decreased at Easter, reflecting the months-long downward trend in foreigners coming to Spain for their vacations. At the same time, Spaniards are traveling abroad less frequently and opting more for holidays at home.

Occupancy rates also declined at most of Spain’s small, family-run rural hotels, according to Joseba Cortázar, communications director for the Spain-based, online-booking service Toprural.com.

“We saw an average of an eight-point drop in occupancy to 85 percent, but that’s not so bad when you consider that the number of rural hotels in Spain increased by 12 percent over the past year,” he said.

Rural accommodations had a number of advantages over traditional hotels during the Easter break, Cortázar said.

“They’re usually closer than the popular beach destinations for guests from Spain’s larger cities, they’re almost always cheaper and more accommodating for family groups and friends who can rent out the whole establishment, and they’re more geared to short-term stays,” he said.

A summer barometer

The week isn’t necessarily a good bellwether for what might happen in the summer when many Spaniards take off for an entire month, Cortázar and Martínez said.

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“Easter is for short-term holidays, so it can’t really serve as an indicator,” Cortázar said. “We’re positive but cautious regarding the coming summer season. However, with the economic conditions as they are, you just can’t tell.”

Martínez concurred.

“We can’t use Easter week to make any forecasts about the coming summer,” he said. “It’s still too early to predict how the Spanish market will behave then. All we can say is that guests will continue to book at the last minute, whether it’s at discounted prices or not, and Spaniards are preferring to take their vacations here rather than in other countries.”