The tourist bustle has returned to the center of Barcelona in the form of queues in front of some luxury shops and optimism has suddenly spread in the hotels. The best sign of this new panorama is that reserving a room in the Catalan capital is now costing more than it did two years ago, before the Covid nipped international visits in the bud and much of the doors of the establishments had to be boarded up in anticipation of a long hiatus. According to an internal survey by the Barcelona Hotel Guild, the average price paid in June, in the first breaths of the summer campaign, was 192 euros, 10% more than in 2019 and 24% more than the same month of 2018. Predictably, these rates were higher in July and will be in August, the most valuable and expensive months of the year.
Prices were higher, although occupancy was still slightly lower than in those years. And this increase is largely explained by the appeal that the high-end facilities have. All categories have increased rates, but none as much as the city’s 44 luxury five-star establishments (of the 437 existing hotels in total). That’s despite the fact that one of the largest in this segment, the 500-room Juan Carlos I, remains closed due to financial problems and is waiting for its owner, Saudi Ben Nasser, to find a buyer.
The price recovery is contrasted with the price war in which the hotels that were still open in the summer of 2020 entered with an average discount of 50%. Then they went in search of possible national tourism that could land in the city. All in all, according to INE data, price increases in Barcelona are below the Spanish average. In this case, hotel prices increased by 18% compared to summer 2019.
“The recovery came very suddenly and started in April,” says Manel Casals, general manager of the guild, who basically explains this recovery for several reasons. On the one hand, after two years of low income, they needed to regain liquidity capacity to handle the loans they took out to extend and run new projects, and pay the ICO loans they demanded to solve their financial woes in the midst of the pandemic. Hoteliers have benefited from the recovery in business tourism, which has helped drive up prices due to hoteliers’ unique model: the reservation becomes more expensive when more rooms are requested, and not the other way around. Second, the need to pass on higher energy and food and beverage prices, impacted by higher commodity prices and prices.
The price of Barcelona as a holiday destination is relevant. The city attracts more than 15% of international visitors arriving in Spanish cities during the summer, becoming Spain’s top urban tourist destination. According to the INE, 585,600 foreign tourists stayed here last June, well ahead of Madrid (429,900). Before Covid, in 2019, it was 656,000 in June.
The president of the public-private consortium Turisme de Barcelona, Eduard Torres, concedes the season will be good, although he warns that August reservation dates don’t seem to sell as much optimism as June or July. “We assume that this summer tourism will leave an income of 85% of what was achieved in 2019, but we must bear in mind that this percentage was 15% in 2020 and 35% in 2021. It’s clear that the average cost has worked very well.”
The attraction of the season has extended to other activities related to the hospitality industry, such as B. Investments. As a result of the drop in income and the inability to bear debt, many owners chose to put assets up for sale until operations reached unprecedented levels. Sales books remain the order of the day, but not the rush to close operations. “Ongoing negotiations have slowed since late March as a result of the collection of reserves,” points out Juan Gallardo, partner at 3 Capital Real State, “since the properties, some of which have seen significant tensions in the Treasury department after two years In years of the pandemic, they have seen their position strengthened and have either withdrawn their assets from the market or delayed the sale process to benefit from a summer that, if the current trend continues, will surpass the best historical results in the hotel industry in Barcelona”. It is possible that when sales resume, the prices of the operations will reflect this improvement in the market.
Gabriel Jené, president of Barcelona Oberta, the association that brings together the city’s tourism industry, agrees with Casals that the influx of tourists has been noticeable since April, which would have brought billing levels “to or near pre-pandemic levels”. “There is a difference because while the tourism-focused stores have seen Sunday sales soar, those that focus on the local audience haven’t benefited as much because internal demand is like it is”, in relation to the uncertainty about economic development.
“The problem,” says Casals, “is that it’s very difficult for us to read the market and we’re worried about how it will be from October.” It refers to the development of the economy with inflation and the war in Ukraine as the background photo. “We are aware that a drop in demand is imminent.”
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