Profitability of Spanish hotels dropped in 2003

The profitability of Spanish hotels plummeted 5 percent in 2003, said Ramon Estalella, secretary-general of the Hotel Association of Spanish Tourist Zones (ZONTUR is the acronym in Spanish); though no real data will be disclosed until March this year.

“We must bear in mind that we knew what we’re coping with in the first place because as soon as March last year we were very keyed up about the way 2003 was going. We knew 2003 was headed for disaster as result of the SARS outbreak and the war in Iraq,” Mr. Estalella pointed out.

A weakened euro was also a negative factor pounding the sector. “We were very concerned about that because our competitors could have hacked off prices almost effortlessly,” Mr. Estalella went on to say.

Stacked up against the dollar, the European currency has gained 20 percent and 15 percent compared to the British pound. “That made us believe British travelers were going to shell out more money to come to Spain, and so it happened. At the same time, our competitors out of the euro zone, like Croatia, Turkey, Bulgaria and the Caribbean, were bound to push prices down for a simple reason of change,” he concluded.

Nonetheless, tourist arrivals has fared similar to the previous year, regardless of cutbacks in average stays and less overnight lodgings, two indicators that plunged compared to the numbers they posted in 2002.

Mr. Estalella noted eleventh-hour reservations –something that prevents hoteliers from making accurate estimates and forces them to cut down on prices- are going unevenly in terms of demand, regions and dates.