Competitive hotel prices make Spain a bargain

THE weak euro and fierce competition may be keeping hoteliers in Spain worried, but the low room rates also make the country an attractive destination for buyers, according to UK-based wholesaler JacTravel.

Terry Williamson, JacTravel’s CEO, commented: “We are currently more optimistic about Spain than we have been for some time. Clearly, aggressive competition has made the Spanish hotel market more competitive and, coupled with the decline in the value of the euro, it is better value still, so this is an excellent moment to visit Spain.”

Looking back on wholesale rates over the past three years, JacTravel saw prices come down across cities and across star ratings in Spain by an average of around 10 per cent from 2012 to 2013 and in 2014 they stayed low.

Rita Buffa, JacTravel’s senior contract manager in Madrid, said: “The price collapse in 2013-14 was the most drastic I’ve seen. Hotels not only suffered the lowest occupancy in history but lower rates have forced severe cost cutting and even closures.

“The good news is that clients are starting to come back – 2014 has seen an increase in the numbers booking but they are doing so at lower prices,” said Buffa, adding that JacTravel has shifted more roomnights as a result.

Madrid has been worst affected of all the major cities, suffering declines in wholesale rates of nearly 30 per cent for a five-star hotel room in 2013. Last year, rates rebounded but only in the three- and four-star categories; at the five-star level, rates fell further and are now 40 per cent down on 2012. “A golden year of selling at higher prices has yet to come”, said Buffa.

Mabel Ariu, JacTravel’s senior contract manager for Barcelona, said: “By comparison with Madrid, Barcelona had been more resilient. It did not suffer such heavy declines in 2013 and at times in 2014 room rates were close to the previous year. As a destination, it is growing, thanks to new air links to the Middle East with Emirates and increased traffic from Latin America due to a tie up between TAM and Iberia.

“However, the increase in demand has not pushed up hotel prices because of a strong increase in supply, which has caused downward pressure on room rates. At the end of an eight-year period from 2008-2016, Barcelona will have seen the opening of about 80 new hotels and 2,300 apartments.”

She continued: “Now is a great time to come to Barcelona. It is Europe’s number one cruise destination; it has great air links, it has fantastic culture, a vibrant city centre and the beach. It has also marketed itself compellingly abroad as a conference and short-break destination, offering more aggressive promotions than ever.”

JacTravel has increased market share according to its media statement, growing its number of bookings in Madrid and Barcelona collectively by 48 per cent in 2014 and by 52 per cent at the start of 2015, compared with the same period last year.

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