BERLIN, Germany — Speaking to delegates at this year’s IHIF conference in Berlin, Spain’s hotel operators called on their government to promote the country to new source markets in order to protect them from a potential drop in visitors from the UK and Germany.
The panel of operators acknowledged that the recent growth in travel to Spain has been driven by fears over safety in neighbouring countries, and a repositioning of products is needed to drive business in the long term.
“It’s a fact that the Spanish market, as well as others in the market, are benefitting from the political risks in north Africa, but that will not last forever. We want to ensure that will not have to rely on other people’s problems to be successful," said Maria Zarraliqui, global development managing director, Meliá Hotels International Group. “Spain is not going to compete on a price level, but on a service level. We want customers to come back and be loyal to us. We have to invest to create a differential from our competitors. In Spain we have a huge influence in the UK and Germany; we have seen an increase in demand so far in 2017, but Brexit hasn’t happened yet.
"We are looking to a diversification of assets so that we can drive a number of different markets to our hotels," Zarraliqui said. "We have been developing our efforts to try and pull the barriers down and make ourselves attractive to Chinese guests—by going digital, but repositioning assets. But it’s not enough, we need a private/public combination, we must increase marketing and publicity.”
“Our clients are taking safety as a key decision factor when choosing holidays, but from 2019 the consumer is likely to start taking other destinations more seriously," said Jaime Buxo Clos, chief development officer, Barceló Hotel Group. "We depend too much on the UK and German markets, and now is the time to try and diversify as much as we can.”
“There is a lot of pent-up demand for Spain from Northern Europe—people have more jobs and money after the clean-up following the downturn," said Dominic Seely, director, acquisitions, Westmont Hospitality. "In the Spanish economy, corporates are starting to spend. Couple that with the fact that there has been almost no new supply and there has been double-digit [revenue-per-available-room] growth.”
Seely described Spain as “always a top pick” when doing transactions. “We’re opportunistic; it depends on whether the price is right," he said. "In Spain there is a very liquid market and lots of different opportunities—there are public and private companies, [real estate investment trusts].”
Inmaculada Ranera, managing director, Spain and Portugal, Christie & Co, described the restrictive planning regime that has now been launched in Barcelona and, it is rumoured, will be emulated in Madrid, “making sure that tourists and local residents can live together without hating each other.”
“It’s frustrating for brands which aren’t there," said Paul Pisani, SVP, development, Corinthia Hotels. "The long-term effect on existing hotels may be complacency because there is no new supply coming in—it’s easy money coming in, so why improve the product? Maybe one day the restrictions will be removed and they will lose out to new supply.”
Zarraliqui had the last word: “They are controlling the hotels, but they are not restricting Airbnb, which is a disaster. Just a restriction without a strategy—that I don’t understand.”
Katherine Doggrell is an editor at Hotel Analyst, the U.K.-based news analysis service for hotel investors.