Costa del Sol heads into August with discounts of up to 30% on accommodation as demand cools a little

The tourist month par excellence comes to a head this year, with some accommodation offers almost 30% lower than the book rate, both in hotels and holiday rental homes. It is easy to see on holiday portals such as Booking.com that the discounts in August are determined by a lower occupancy rate than expected. Given that "the three summer months account for 60% of the year's turnover", July and August's consecutive drops in occupancy are a cause for concern.

This August starts on a weekend marked by offers in all hotel categories, including five-star establishments, and holiday rental properties. After years of record accommodation prices, this certainly makes for an unusual and unique situation.

A couple of examples that show how sharply prices have dropped: a stay in a four-star hotel during the first week of August has gone from 1,818 euros (the initial price) down to 1,016 euros; a stay in a three-star hotel in Torremolinos has dropped from 1,305 to 914 euros.

What is behind the decision to lower prices? It is the goal of reaching the 2.7 million overnight stays that the Costa del Sol registered in August 2024. This figure already showed that the high-season month was struggling, with stagnation in overnight stays and a 2.8% drop in the number of tourists staying in the province, which came close to one million. Hotels suffered the most, with a 3.3% drop in tourists and a 1.4% drop in overnight stays in August 2024. Despite this, prices went up by 4.1%, exceeding the Andalusian average by some 50 euros.

Forecasts

The association of hoteliers of the Costa del Sol (Aehcos) confirmed that this August will experience an occupancy decrease. According to its survey, 88.3% of rooms will be occupied this year - almost 4.5% less than in 2024. On a more positive note, there is "a slight upturn" in domestic tourism, which has been experiencing a decline since last year. The forecast is that this category will go from 30% to 40% of Spanish tourists. The favourite destinations for tourists along the Costa del Sol are Benalmádena, Torremolinos and Fuengirola, where hotel establishments expect to fill 92.6%, 92.2% and 91.3% of their rooms, respectively. Occupancy rates above 87% are expected in Marbella and Benahavís.

The Andalusian tourist housing association (AVVA-Pro) has also announced its forecasts for the holiday rental sector this August: an average occupancy rate of almost 57%, compared to 62.5% in 2024. Despite the lower figure this year, the month is expected to be stable, "without abrupt decreases". This sector of the hospitality industry is also experiencing a drop in rates: an average of 260 euros, compared to 296 euros in 2024. Prices this August are the highest in the middle of the month and the lowest towards the end. Logically, this combination of lower occupancy rates and lower prices indicates a drop of profitability (19.5%).

Interestingly, the opposite trend can be observed in the inland parts of the province, where the expected occupancy rate this year is higher than last August - 88%, according to expert Felix Zea. Coincidentally, the sector will use this as an opportunity to increase prices by 5.5%.

President and co-founder of Soho Boutique Hotels Gonzalo Armenteros said that the cooling of demand does not concern all destinations. For example, in urban hotels "the dynamism in bookings is the usual at this time of year".

'Chiringuito' beach bars are also noticing the decrease in tourists. Owners enjoyed great May and June, but the situation worsened in July. "Trade has fallen by around 20%," said president of the association of beach business owners of the Costa del Sol and Andalucía Manuel Villafaina. He predicts "an August similar to July", given that supply costs for restaurants and bars have risen by 56% since the pandemic, but establishments have not been able to match that and the increase in prices has been a maximum of 30%.