• Spanish groups benefit from recovery, unrest

The Spanish hotel market is seeing a recovery in inbound tourist numbers, aided by general growth as the global economy recovers, but also picking up business as travellers are unable to visit many countries in North Africa.

Faith in the country was reiterated this week as Marriott International announced that four AC hotels would join its Autograph Collection and Hilton Worldwide added a Waldorf Astoria. For the existing domestic operators, growth in trading has seen increased optimism following a difficult period.

After two years of falling arrivals, Spain saw a year-on-year increase of 4.7% in January, with 2.66 million visitors, according to Frontur, an institute that surveys tourism. This looks set to be accelerated by the diversion of tourists away from troubled regions.

Simón Pedro Barceló, president of Barceló Hotels, told the New York Times: "The events in North Africa will accelerate a recovery that was already underway thanks to price cuts.

"The impact has so far been most clearly seen in the Canary Islands, but I certainly expect it to spread to coastal Spain and the Balearic Islands over the coming months."

The comments came as Sol Meliá has reported an 8.9% increase in full year revpar, driven by rate and occupancy growth and estimated revpar growth of between 5% and 9% this year, "consolidating the positive trend in occupancy and rate improvements together with reduced growth in hotel supply".

Sebastián Escarrer, vice chairman of Sol Meliá, said that diverted travel from North Africa amounts to "fresh air for us, but certainly no reason to get complacent or believe that nothing more needs to be done to reposition our tourism product". He added that when Egypt, for example, returned to compete for consumers, it was likely to do it with aggressive pricing. 

NH Hoteles, meanwhile, reported a 13% increase in fourth-quarter revpar, with full-year revpar up by 10.4%, as rate saw "greater improvement".  The group said that, in Spain and Portugal, occupancy increased by around 10%, while the rate decrease had bottomed out.

The results came as Christie & Co announced that it had been appointed by Nueva Rumasa (which is currently entering bankruptcy protection) to advise them on the sale of the 15-strong Hotasa hotel portfolio, which is located in holiday destinations across Spain and likely to capitalise on the recovery in trading fundamentals.  Inmaculada Ranera, managing director of Christie's operations in Spain and Portugal, said: "All the hotels in this portfolio are very well positioned within their segment. Some offer additional growth opportunities and could potentially be converted and repositioned in a higher category."

However, while Spain's streets are unlikely to see the riots that have affected other countries, it is not immune to political upset. Airport workers in the country have announced 19 strike days timed to coincide with the peak periods of Easter and summer, with strikes starting on April 20 and continuing into May, June and July. The strikes come after the Spanish government had to declare a state of emergency for the first time in the country's 33-year democracy to halt a wildcat strike by air traffic controllers just before Christmas.

Spanish airports authority president Juan Ignacio Lema said: "A strike is the worst scenario. We will do everything we can to avoid it. A strike would seriously damage the tourist sector at a time when the outlook for Easter and summer are very encouraging. I urge the unions to negotiate."

 

HA Perspective: The downgrade by ratings agency Moody's on Spanish government debt at the end of this week will have done little to shore-up confidence in the country. But there remains opportunity. Perhaps the problems will create some of the best opportunities in Europe.

And it is not all about distress. Travelodge has secured the site for what will be its fourth property in the country and other operators are looking at the economy hotel prospects there given the relative lack of branded offer in that space.

Land is likely to be both cheaper and more plentiful than at any time in the recent past. The knifes may still be falling but the big winners will be those brave enough to move now and lucky enough not to catch any.

Share →