Hotels are starting to offer summer deals as bookings have slowed down

Some hotel chains on the Costas have started to offer deals in a bid to revive demand after bookings slowed down in mid-May and have not picked back up again yet. Last-minute bookings have been snapped up very quickly since the start of the year, but just a few days out from the beginning of July, they need a boost.

Although a tourism boom is forecast this summer, the slow rate of bookings has triggered some hotel chains to offer deals to attract more holidaymakers.

Hoteliers have attributed the slow-down in bookings to the final stretch of the academic year, and uncertainty about final grades, as well as the general election, which is being held on July 23rd.

The Aehcos Association of Hoteliers on the Costa del Sol confirmed it was starting to see a trickle of offers for July in hotels on the Costas, and that the rate of sales is not recovering. In its latest report, hotel occupancy levels are below those of last year for July and August, reaching 82.16% in July and close to 80% in August.

Although they expect to update the data this week, it was at the start of June when Aehcos raised the alarm about the slowdown in bookings, warning that the rate of demand for July and August is between 10 and 14% below that of last year.

The deals to encourage demand vary among hotel groups depending on the type of client, the main markets they work with, and the level of availability. Some chains believe that, despite being affected by this slowdown, it is too early to act and that summer is not the time to lower prices.

The MS Hotels chain said that a drop in demand, especially from Spaniards, has been noticeable in the past two or three weekends. "We had a very good start to the year and expect a good summer, but the pace of sales reflects the uncertainty of families due to the high impact of inflation.”

Some of the promotions hotels are offering include deals such as seven nights for the price of six, including breakfast, or simply to reduce the price or to reduce the minimum stay by no longer making bookings conditional on four or five nights.

Rising interest rates.
One of the causes of this slowdown is being attributed to inflation, and the rise in interest rates. The sector believes the increase in mortgages is the main trigger for these first signs of stagnant bookings.

Interest rates have continued to climb to the current 4%, and in the case of housing, following the rate rises adopted by the European Central Bank (ECB) and the rise in the Euribor, the average interest rate in April was 3.09%, up from 1.77% a year earlier and the highest since April 2017.

This situation does not look like it will improve anytime soon as the Euribor has now reached 4.11%, which is a new record not seen since 2008 during the recession and subsequent financial crisis started to come into force.