Monday, 26 June 2023, 13:22
Some hotels on the Costa del Sol are starting to offer deals in a bid to revive demand after bookings slowed down in mid-May and have not picked up.
Last-minute bookings were being snapped up very quickly since the start of the start of the year, but they started to slow in mid-May and are yet to regain momentum, just a few days out from the beginning of July.
Although the area is still expecting a tourism boom this summer, the slow rate of bookings has triggered some business owners to offer deals to attract more holidaymakers.
Hotels have attributed the slow-down in bookings to the final stretch of the academic year, and uncertainty about final grades, as well as the general elections, which were pushed forward and will now be held on 23 July.
The Aehcos association of hoteliers of the Costa del Sol confirmed it was starting to see a trickle of offers for July in hotels on the Costa del Sol, and that the rate of sales is not recovering. In its latest report, hotel occupancy levels are below those of last year for July and August, reaching 82.16% in July and close to 80% in August, Aehcos added.
Although the association expects to update the data this week, it was at the start of June when Aehcos raised the alarm about the slowdown in bookings, warning that the rate of demand for July and August is between 10 and 14% below that recorded last year.
The deals to encourage demand are different among hotels. They depend on the type of client, the main markets they work with and the level of occupancy they manage. Numerous establishments and chains believe that, despite being affected by this slowdown, it is too early to act and that summer is not the time to lower prices.
Founder of the MS Hotels chain, Miguel Sanchez, said a drop in demand, especially from Spaniards, has been noticeable in the past two or three weekends. "We have had a very good start to the year, a good summer is expected, but the pace of sales reflects the uncertainty of families due to the high impact of inflation," he said.
Some of the promotions hotels are offering include deals such as seven nights for the price of six, including breakfast, or simply to reduce the price or to reduce the minimum stay by no longer making bookings conditional on four or five nights.
Rising interest rates in the spotlight as a trigger
The causes of this slowdown are also being attributed to inflation, and the rise in interest rates. The sector believes the increase in mortgages is the main trigger for these first signs of stagnant bookings.
Interest rates have continued to climb to the current 4%, and in the case of housing, following the rate rises adopted by the European Central Bank (ECB) and the rise in the Euribor, the average interest rate in April was 3.09%, up from 1.77% a year earlier and the highest since April 2017.
The situation does not look like it will improve anytime soon. Just last Thursday, the Euribor climbed to 4.11%, which is a new record not seen since 2008, when the great recession and subsequent financial crisis started to threaten.
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