In the run-up to last week’s FITUR in Madrid, JacTravel – which is planning to open an office in Dublin this month – released booking data that explains last year’s recovery in hotel occupancy in Spain: low prices.
Andy Uttley, Director of Sales – Groups, told Irish Travel Trade News: “Two or three years ago JacTravel was sending around 50 groups to Ireland, but this has risen significantly to around 250 groups last year and approximately €2 million of online business into Ireland, so we are opening an office in Dublin for contracting and group operational business in Ireland.
“Globally our main markets are North America and Western Europe, which is reflected in our groups into Ireland. It is difficult to say what level of online business we get out of Ireland because as a wholesaler we don’t always know the location of the ultimate client.
“We have two options for the location of our new Dublin office and we hope to be signing off on one on Tuesday 3rd February and opening later this month. There will be three or four staff.
“JacTravel is a regular exhibitor at FITUR and the Spanish market is very positive this year.”
Hotel Wholesale Rates
Looking back on wholesale rates over the past three years, JacTravel saw prices come down across cities and across star ratings in Spain by an average of around 10% from 2012 to 2013 – and in 2014 they stayed low.
Rita Buffa, Senior Contract Manager in Madrid said: “The price collapse in 2013-14 was the most drastic I have seen. Hotels not only suffered the lowest occupancy in history but lower rates have forced severe cost cutting and even closures. The good news is that clients are starting to come back – 2014 has seen an increase in the numbers booking but they are doing so at lower prices. JacTravel has shifted more room nights because, with an expanding portfolio and enhanced worldwide distribution, including emerging markets, we offer more choice and with buyers on the ground we are sourcing more exclusive promotions.”
Madrid has been worst affected of all the major cities, suffering declines in wholesale rates of nearly 30% for a 5-star hotel room in 2013. Last year, rates rebounded but only in the 3-star and 4-star categories; at the 5-star level, rates fell further and are now 40% down on 2012. “A golden year of selling at higher prices has yet to come”, added Rita.
Mabel Ariu, Senior Contract Manager for Barcelona, said: “By comparison with Madrid, Barcelona had been more resilient. It did not suffer such heavy declines in 2013 and at times in 2014 room rates were close to the previous year. As a destination, it is growing, thanks to new air links to the Middle East with Emirates and increased traffic from Latin America due to a tie up between TAM and Iberia. However, the increase in demand has not pushed up hotel prices because of a strong increase in supply, which has caused downward pressure on room rates. At the end of an eight-year period from 2008-2016, Barcelona will have seen the opening of around 80 new hotels and 2,300 apartments.
“Now is a great time to come to Barcelona. It is Europe’s no.1 cruise destination, it has great air links, it has fantastic culture, a vibrant city centre and the beach. It has also marketed itself compellingly abroad as a conference and short-break destination, offering more aggressive promotions than ever.”
According to the World Travel & Tourism Council, which is bringing its Global Summit to Madrid this April, tourism is a huge industry in Spain and represents 16% of the economy in terms of both GDP and employment.
JacTravel has increased market share, growing its bookings in Madrid and Barcelona collectively by 48% in 2014 and by 52% at the start of 2015, compared to the same period last year.
Terry Williamson, JacTravel’s Chief Executive, concluded: “We are currently more optimistic about Spain than we have been for some time. Clearly, aggressive competition has made the Spanish hotel market more competitive and, coupled with the decline in the value of the Euro, it is better value still, so this is an excellent moment to visit Spain.”