Spain Sees a Strong Start to the Tourist Season Despite Inflation Pressures
After pandemic restrictions, travel demand is rebounding as optimism returns to the tourism sector ahead of the Easter period. Hotels report solid occupancy and transport schedules are filling, even as inflation pushes prices higher. The coming weeks are shaping up as one of the most expensive travel seasons in years, yet industry leaders anticipate a robust recovery as travelers rejoin the skies and rails.
“The desire to travel remains strong even in tough economic times. Prices are climbing faster than many would like, but consumers are itching to return after 2020, 2021, and 2022 disruptions. This could become the priciest vacation period in years, driven by inflation meeting strong demand and rising costs,” noted Jose Manuel Lastra, vice-president of the Spanish Confederation of Travel Agencies (CEAV). He expects activity to grow between 5% and 10% above 2019 levels, with packages up around 10% and hotel rates up roughly 12% higher, plus a 10% increase in airline fares.
Recent data from February’s Consumer Price Index (CPI), published by the National Statistics Institute (INE), show hotel rates and room prices elevated compared with pre-pandemic years. While hotel rooms have surged, airfares remain high as carriers adjust to rising operating costs. Distribution of price increases is uneven, with some airlines raising fares while others absorb more costs. This summer, the industry hopes to build on improving demand and tighter supply.
Industry forecasts point to a sustained boom through the summer. Spain welcomed 71.6 million visitors in 2022, a 14.3% drop from the 83.7 million registered the year before the pandemic. Early 2023 signals suggest a return to normalcy, with January arrivals reaching 4.1 million foreign visitors, just 100,000 shy of 2019 figures. European travelers, especially the UK, plus steady American arrivals, bolster confidence. Still, executives urge cautious optimism given inflation, geopolitical tensions, and higher interest rates that could trim purchasing power and dampen spending.
80% Occupancy
From Friday, March 31 to Monday, April 10, Aena recorded 60,498 inbound and outbound flights, up 1.5% from the previous year but 4.6% below 2019. Airlines are planning to lift capacity for the Easter window. Iberia aims to operate nearly 420,000 seats, about 6% more than Easter 2019, while Vueling is expanding on more than 130 routes, including services from Barcelona to London, Florence, and Ibiza, along with Madrid to Seville and Bilbao. Renfe expects to add roughly 2 million seats as Andalusia opens, with competition intensifying on the rail network, supported by new services connecting Madrid with Seville, Malaga, and Cordoba.
Hotels anticipate strong performance as well. By mid-March, beach properties reported around 80% occupancy, inland hotels about 65%, and campsites near 95%. Last-minute bookings could push coastal occupancy even higher, while fewer cancellations and longer lead times reinforce optimism for a return to normal activity. “The projections show promise,” stated Jorge Marichal, head of the hotel association CEHAT, last week.
Among the leading groups, Melia reported occupancy near 75% in resort hotels, roughly 60% in urban hotels, and peak levels around 75% to 80% in beach destinations. In major cities like Palma de Mallorca and Canary Islands hubs, occupancy can exceed 80%. Sales projections in 2022-registered hotels point to a 30% year-over-year uplift, with double-digit growth in average daily rate for many properties. Palladium Group indicated an expected global occupancy around 80%, slightly higher than last year’s figures.
Return of the International Traveler
Domestic visitors kept the industry afloat during the pandemic, but indicators point to a strong international rebound as the year unfolds. The main source markets are showing solid demand in the early months, with notable strength from the United Kingdom, France, and Germany. American travelers are also finding smoother travel experiences, despite inflation. Caribbean destinations had their moment during the pandemic; now Spain, Portugal, and Greece are experiencing notable growth. Latin America is also a premium segment for major cities like Madrid, according to Juan A. Gomez, head of Market Intelligence for the ForwardKeys platform, who attributes the uptick in international travel to improved operations and heightened interest in southern Europe as travel resumes at full pace.
Overall, the industry expects a continued uptick in international arrivals as pricing adjusts and comfort with travel grows. The sentiment across carriers, rail operators, and hotel groups remains cautiously optimistic, hinging on macroeconomic stability and sustained consumer confidence, with many markets predicting a strong summer season. In this climate, Spain remains a key destination for European and North American visitors alike, offering a mix of beaches, historic cities, and culinary experiences that draw travelers year after year. (Source: industry associations and statistical agencies cited in February data and early 2023 market analyses.)