Spain was seeing occupancy levels starting to show signs of slight recovery due to a lifting on restrictions, according to STR.
The company reported that guests were drawn to higher quality offerings, rather than cheaper all-inclusive breaks.
Javier Serrano, country manager Spain & Portugal, said: “Is the sun coming back to Portugal and Spain? In terms of Physics, yes, it promises to be one of the hottest in the past few years. But in terms of hotel performance, is it also getting the sun?
“Premium hospitality services are outperforming. One of the new requirements is a strong service at the hotel rather than lower-end all-inclusive services. Regional areas are recovering faster as they can be reached by car and also because they are isolated. It is important to demand to feel secure.
“Industry fundamentals are rapidly changing in the market globally. Hotels have to comply with new policies but also demand is no longer the same. From mid-June onwards domestic demand in Spain started to recover, particularly at the weekends. This growth accelerated in July when international trade restrictions were lifted. There is a new and positive trend for Spain and for Portugal. Revpar has a long way to go, but we are seeing recovery, week by week.”
Since 21 June, Spain saw its highest occupancy level on 11 July - at 45% - thanks to domestic and some international leisure demand.
For the week ending 5 July, occupancy of open hotels in Spain and Portugal ranged from 10% to 40%. Amongst those markets, Alicante posted the highest occupancy level (44%), followed closely by Zaragoza (41%) and Valencia Area (39%)
Upper upscale hotels in Spain and upper midscale class hotels in Portugal were the most affected by the pandemic. For the week ending 12 July, upper upscale hotels in Spain saw a 90.3% revpar decrease. Upper midscale hotels in Portugal posted a revpar drop of 88.8% that same week.
There were signs of hope for the Canary Islands and the Balearic islands, with STR reporting that it was seeing positive pickup for the next 90 days for the first time in the past four months. For Spain, the regional markets were seeing positive pick up for the next 45 days.
Looking at the wider European market, Dennis Spitra, director of business development for Europe, STR, said: “We’ve seen over tourism in most of the leading destinations in Europe. We are now at risk of seeing it in our home countries rather than abroad. Is the local hotel market able to cope with the demand from these tourists? Most countries would not be able to cope with the demand they would be seeing in leisure destinations.
“By the end of May we are seeing the level of restrictions ease and by 13 July there were just a handful of restrictions on hotels and hotel demand drivers. China is almost fully open again, with the US not far behind. In Germany only around 15% are closed, with France, UK and Italy having between 50% closed. In Spain we still still 60% to 70% closed.
“How soon is the summer going to come, how soon are people going to start travelling for their summer holidays across borders? For the week ending 5th July, Israel, France and Spain were the strongest in Europe, with occupancy of between 35% and 40% for open hotels. Factoring in the full inventory, Israel was around 15%. Comparing regional hotel markets with the main cities in Europe, the regional ones are ahead of the cities in terms of occupancy. Regional markets are more resilient in terms of rate.”
Insight: The STR calls are moving from the grimly fascinating to the hopefully fascinating, which is certainly a much sunnier place to be, although comes with its own issues, as Serrano pointed out, commenting: “The virus seems to be under control, but fear is still in the air. A second wave would be a disaster, but things are under control. Airlines have to be robust and are key to recovery but also destinations need to reopen.
“It is no good the airline restarting, but then national parks are closed, restaurants are closed and the client has nothing to do but stay in the hotel.”
The hospitality sector is, traditionally, no good at working with its different tendrils. Really not. It’s shocking. This is pronounced in the UK, where the lack of voice was marked and allowed government to ignore it - but has now started to shift, as the recent shocking VAT cut illustrated. In the US it’s all golden with a hotelier in the White House and in the Mediterranean leisure destinations, it’s somewhere in between.
Government is certainly more motivated than many countries for obvious reasons, but there can still be a touch of the disjointed. No-one wants to go on holiday and find there are no restaurants after months of the same three meals. This is why guests are looking to a quality upgrade. If hotels work with the destinations, everybody wins.