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The unaffordable cost of closed hotels

The animals at Holiday World require permanent care.
The animals at Holiday World require permanent care. / SALVADOR SALAS
  • The paralysis in tourism has not only left the sector with no income but also created maintenance costs which very few companies are able to meet

The lawnmower is the only sound to be heard these days at the Marbella Club, one of the legendary hotels on the Costa del Sol which at first sight could be confused with a typical Andalusian white village. It closed on 21 March for the first time in its 66-year history and the maintenance works, of which the gardeners are the most visible, are practically all that stops it taking on the appearance of a ghost village.

The enforced closure of the hotels on the Costa del Sol placed them in a situation which has never before occurred in their long history. It is a critical situation, an enormous challenge, and it is still too soon to know when it will end. Although the government recently announced dates when businesses can partially resume operating, the conditions involved and uncertainty about the main tourism markets are drawing a complicated picture.

Opening without clients is not a viable option, but then neither is keeping the hotels closed. This is not just because companies cannot survive without income, but also because even though the hotels are closed and most of their staff have been laid off, money is still needed to run them.

"This is just like when you go on holiday and close up your house without taking any precautions, when you come back you might find the washing machine or fridge isn't working," says Alberto Muñoz, the general manager of Puente Romano.

The rooms need to be aired periodically, the equipment and water heaters need to be kept in operation, the swimming pools have to be maintained and so do the gardens, and those are just a few of the necessary tasks. The cost varies, depending on the type of hotel.

The Costa del Sol, with such a variety of hotels, is faced with a huge number of different situations. The simplest, at first sight, are urban hotel buildings with only one entrance. However Jorge González, the manager of the AC Málaga Palacio, says it is not as simple as it seems, not just for practical reasons but also legal ones. There is also a need to be especially careful about security and energy supplies. Some machinery, such as lifts, needs regular maintenance in order to keep them working.

Maintenance work is needed daily at the Marbella Club.

Maintenance work is needed daily at the Marbella Club. / Josele

How much does all this cost? It depends on the characteristics of the hotel, but the expenditure will always include labour costs because some sectors such as administration, marketing and reservations are still active, as well as maintenance.

Then there are supplies, which always cost something; contracts with external companies providing services, which may include inspections required for insurance purposes; security, data maintenance and CCTV; the booking systems and websites, which also remain active; and pool and spa maintenance, because the regulations do not allow the water to be removed and then refilled, and anyway doing so would involve an even greater cost.

Ventilating the bedrooms, keeping the water circulating so the pipes don't get blocked up and maintaining gardens are all tasks which have to be carried out periodically, and in many cases they are necessary every day.

For a hotel with just over 100 bedrooms, the costs during closure will not be below 60,000 euros a month, and then there are still interest payments, loan repayments, business taxes and local taxes such as IBI and IAE.

Staffing costs, which are about 30 per cent of the total, could increase substantially if the government does not extend the policies regarding force majeure for the hotel sector, which in principle end on 9 May, says the managing director of Fuerte Hoteles, José Luque. The industry and the unions are calling for a six-month extension.

For hotels like Puente Romano and Marbella Club, with their Andalusian village design, the costs are considerably more and operational expenses alone can come to 100,000 euros a month, while in holiday complexes such as Holiday World in Benalmádena, with 1,000 rooms, 25 swimming pools, 40 jacuzzis and a 500 metre expanse of water, they are even higher.

One of the hotels in this complex also has a type of zoo with 400 animals including turtles, lovebirds and oriental carp. They still have to be fed and looked after, closure or no closure.

The CEO of this resort, Marifrancis Peñarroya, points out that there will also be additional costs involved in reopening. Some hotels close anyway at the quietest time of year, between November and January, and the announcement of the state of alarm took them by surprise just after they had reopened. Two closures and two reopenings in one year considerably increases their costs.

In addition to all this there is constant doubt. Because they don't know when activity can resume, and it is not dependent so much on dates marked in the calendar of ending the lockdown as the situation in source markets and when air traffic will be able to resume, the hotels have no choice but to keep their establishments maintained well enough to enable them to reopen within 48 hours of the announcement. And that uncertainty considerably increases their costs.