Supply growth sparks innovation in Spain's hotels

Barcelona photo courtesy iStock | Getty Images Plus | TomasSereda

Spain’s hotels are soaring from an influx of direct bookings, with the contribution of third-party sites expected to drop to below 50 percent within the next three years.

According to a study from SiteMinder, online hotel bookings in Spain have “virtually” doubled since 2012 and direct hotel bookings have grown 113 percent in the last five years. The contribution of third-party sites to Spain's online hotel sales is currently 57 percent.

In contrast, SiteMinder found that, looking at France and Germany, online hotel bookings made via intermediaries were expected to constitute around 70 percent of both countries’ total online hotel sales in 2022.

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“It’s clear hotels in Spain are capitalizing on the continued rise of tourism by taking ownership of their supply, so I fully expect direct bookings to only grow from here,” Mateus Coelho, regional manager for Iberia and Brazil at SiteMinder, said.

Data from Euromonitor International found that the Spanish economy earned €7.3 billion from bookings made through the internet in 2017—or 98 percent more than the €3.7-billion registered from internet-based hotel bookings in 2012.

The Saturation Effect

“With more than 700,000 hotel rooms now available to be booked in Spain, local hotels are experiencing market saturation like never before,” Coelho said. “And these figures don’t even account for the more than 270,000 rooms offered by other types of accommodation providers.”

The success in controlling supply could well be attributed to the “market saturation” in the country, which is forcing hotels to innovate in hopes of standing out from one other—and attracting the millions of potential guests entering the country.

“We’re seeing some great innovation out there,” Coelho said. “One of the most recent trends has been the transformation of hotel lobbies into social spaces, where guests have the opportunity to meet not only other guests but locals. Luxury hotels in cities such as Barcelona and Madrid have begun opening their terraces to non-residents, too, so guests and locals can mingle. Today’s travelers want to experience destinations like a local, so it’s innovation like this that I think is drawing travelers in because it’s authentic, social and memorable.

“I think the state of Spain’s tourism industry make these things inherently unique, especially when you consider what the Spanish economy’s been through, and what it’s been able to overcome, over the past 10 years.

“The spotlight on Spain has, of course, been particularly bright over the past year, as we’ve watched the situation in the Catalonian region unfold, but the world’s love for Spain as a tourism destination certainly isn’t new. Spain’s hotels have long discovered how to entice guests and how to compete to keep business alive—and I think these realities, in themselves, make these strategies unique to the Spanish market.”

Coelho was confident that Spain would continue to thrive, despite rising rates and recovery in markets such as Turkey and Portugal. “Of the 84 million tourists that visited Spain last year, more than 12 million were displaced tourists who were looking to avoid the geopolitical instability in Turkey and other countries, and who opted to travel to Spain as a familiar alternative,” he said. “So, I think it’s quite the contrary and, clearly, cost takes the back seat to things such as security which are important to travelers. There are also many reasons tourism just continues to rise in Spain. Security aside, for travelers it’s about Spain’s incredible food and people, its natural sites and cities, its history, its culture.”

As for the OTAs, will they up their challenge? “I’m not sure we’ll see a day when OTAs aren’t thinking about how to get to consumers first. It’s what makes them so successful— and dependable, as far as online reach goes,” Coelho said.

Katherine Doggrell is an editor at Hotel Analyst, the U.K.-based news analysis service for hotel investors.