“Those working in the industry have to gauge how much customers are really prepared to pay for their services,” said César Bengoechea, Director General of Deloitte at the presentation of the 2017 Tourist Forecast.
Tourism-related businesses predicted a good 2017 last year, but few had any idea how good. By the end of 2016, 73% said the forecast exceeded their expectations.
The Spanish tourism industry has been given a boost both by risk perceptions of other previously popular tourist destinations and also by increased momentum in the national and global economies – 60% of those surveyed predicted Spain’s economy would outstrip global growth. According to the Deloitte report, if this turns out to be the case, “It will have positive repercussions domestically on the tourist sector’s development.”
Bengoechea insisted that the future of Spain’s tourism industry now lies in upgrading services and hotels, making it less budget and more high-end. “Occupancy has reached record levels in the last 20 years,” he said. “The important thing now is to boost revenue by raising prices, not increasing numbers.” Other challenges to the sector include branding and nurturing talent.
The future of Spain’s tourism industry lies in making it less budget and more high-end
Seventy executives from the sector were approached for the Deloitte survey – 58% managing hotels, 15% distribution, 13% transport and 14% miscellaneous. They said recreational and business tourism are areas that will experience as much or more growth than 2016.
According to the survey, three, four and five star hotels are predicted to put their prices up by 10% on last year, which will increase turnover and revenue.
“According to the National Institute of Statistics, (INE), last year’s occupancy grew by 3%, bringing it to 63%. The index of hotel prices also shows continual growth in all categories, with 10.5% year-on-year growth in the last two years,” says the report.
Refurbishments and other improvements to hotels have influenced this upward trend: in 2016, the hotel sector attracted more than €2 billion in investment for the second consecutive year. The most important industry deals included the Turkish Dogus Group’s acquisition of Hotel Villamagna in Madrid and the purchase of Hotel Pullman Barcelona Skipper by a Luxemburg investment fund.
English version by Heather Galloway.