After almost a year since Covid-19 first appeared, our lives have changed beyond recognition. Although there may be a light at the end of the tunnel, it will be some time before things are able to return to how they were.
In Spain, how this affects the tourism sector in particular is a question to which the answer is still reliant on many factors outside of the industry’s control, such as the vaccine rollout. Nevertheless, we are able to take a look at some of the longer term trends expected in the industry and how the pandemic has helped to expedite some positive changes and modernisation of the sector.
Rewind to before the pandemic struck and it’s clear that there were certain aspects of the hotel sector which no longer suited the way in which tourists were choosing to travel. More often than not over the past few years tourists have chosen a direct relationship with the brand or operator, cutting out any intermediaries such as the online travel agents. Customers are clear about what they want out of their experience, with the market slowly but surely evolving around this client-led demand.
As such, this shift in decision-making power has forced hoteliers to look at ways in which to adapt the marketing of their services. A clear example is the difference in customer behaviour regarding last-minute reservations, and how it forces hoteliers to revisit their pricing strategies, in turn leading to good revenue management and maintaining profitability.
At the same time, as we see an uptick in operator rent support packages, the operational risk is slowly being transferred back onto the landlord who will be more likely to play a bigger part in the day-to-day running of the asset in the short-term across part of the sector.
Alongside this, a rise in white label brands being hired by landlords to maintain the property on a financial level means we are seeing an increase in franchises; this new hotel management structure is moving away from the traditional owner-operator model and will hopefully give way to more transparency in the Spanish hotel industry, something that is in high demand in the sector.
Finally, and perhaps the most sobering outcome from Covid-19, we can expect to see a rise in newly available accommodation on the market due to pressures across the capital stack for many owners, while we have started to see both core and value add investors start targeting quality assets.
Further information
Read more: Iberian Hotel Market
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