Spanish hotels cut short prices to withstand competition

Barcelo Resorts (Photo Courtesy: Bookings.com)

Spanish hotels are cutting prices on summer holiday packages as tourists return to destinations like Turkey and resorts in North Africa, while visitor numbers to Spain continue to be increasing for the past four years.

Tourism is one of major revenue earner of Spain, accounting for around 11 per cent of Spain’s total revenue. Last year around 82 million tourists visited Spain, making it the world’s second most visited country after France.

Spain’s hotels have exploited the country’s popularity as a sought after tourist destination and increased prices on average by 21.4 per cent over the 2013-2017 period, according to official statistics.

But now rivals Turkey, Tunisia and Egypt are experiencing recovery in tourist numbers, marking a revival of demand for these destinations, which were spurned by holiday-makers in recent years, following militant attacks.

This season they have been competing for German and British tourists with cheap, all-inclusive deals, Spanish hoteliers said.

This summer lesser the country witnessed a decline in the books, mostly because of the comeback of competitor markets like Turkey, Egypt and Tunisia, those are offering substantially cheaper packages than the Balearic Islands,” said Alvaro Pacheco, a spokesman for family-owned Spanish hotel group Barcelo.

Medium-priced hotels in the Balearic Islands – Spain’s Mediterranean resort islands – were suffering more than luxury establishments, Pacheco said, adding that Barcelo had cut prices by around 15 per cent in some instances to stimulate demand.

“On the island of Ibiza, famous for its nightlife, hotels are cutting prices between 10 and 20 per cent on average,” said Antonio Torres of Tourism Lobby Descubre.