Carla usually spends her summers in Altea, in Alicante. This year, when she started looking for an apartment to rent in August, she was shocked by the exorbitant prices, even in small studios with only one room. Her friend Montse, who spends her summer just across the border in Portugal, confirms that the same thing is happening there: they have been going to the same apartment for years, but this year the owner has asked them for 160 euros per day.
Carla does not quite understand what has happened: Altea is a small coastal town, very quiet, which usually welcomes family audiences and has neither the luxury nor the atmosphere of nearby Albir, for example. And yet, it is impossible to find something cheap: one-room apartments for 600 euros per week; studios ranging between 1,800 and 2,900 euros, depending on location.
And this is not only happening in Alicante: the return of tourism is already beginning to be noticed in the rental prices of tourist apartments in Valencia, according to the newspaper Levante. And it gives an example: an apartment in the Cabanyal area, of 70 meters, 3 bedrooms and 2 bathrooms, cost 750 euros in normal months. Now they are asking for 3,000 euros in July and August.
Are we witnessing a price furor because we are all thinking of traveling this summer, encouraged by the increasing rate of vacations? Does it happen only at national level or also outside our borders? And, outside of vacation rentals, what is happening with hotel vacancies? Are hotels also filling up?
We talked to several agents in the sector, hotel chains, independent agencies and holiday apartments to try to establish a snapshot of what is happening.
“Areas such as the North Coast, Alicante and Valencia have experienced a boom after the pandemic. Everyone talks about the fact that in August there will be international outbound tourism, that is, that Spaniards will go out, but we are realizing that the reality is quite different. When you tell clients that they need a PCR to enter any country, risk a random test there that is positive, PCR to return to Spain… All this raises the price a lot and makes them take unnecessary risks and in the end they decide on a national destination. Most Europeans are eager to swim in the Mediterranean, and they will surely do the PCR and come to spend 2-3 weeks, however, for a Spanish family it costs much more to go out, especially with the wonderful places in Spain,” says Priscila Fernandez, Travel Planner and partner of GoandBe Creative Holidays. “Something similar has happened with rural houses in almost all the country, new establishments and new activity companies keep opening in areas that until a few years ago were uninhabited but exceptional for hiking, canyoning, etc.,” adds the expert.
Where have prices risen the most? “In typical beach apartments in areas of national tourism, Asturias, Galicia, Huelva, Almeria … in 2020 and especially in 2021 prices will rise and there is a shortage. Places like Menorca and Costa Brava go up in price for Spaniards because there is so much demand that the impossible prices that foreigners pay in season are maintained. Places like Costa del Sol or Costa Dorada, however, go down because of the huge amount of empty hotels, many of them have not reopened since the 2019 season,” he says.
“At AvaiBook we observe that the increase in bookings since the end of March is marked and sustained. According to our internal metrics it exceeds for the first time the 2019 levels since the beginning of the pandemic, and this is a very important milestone, and strongly marks the long-awaited recovery”, highlights Vicente Soler, CEO of SOLER & ASSOCIATES, vacation rental management software in Spain, Italy and Portugal and which belongs to the idealista group.
In fact, a few days ago we published that the end of the state of alarm has boosted hotel and tourist apartment bookings in our country.
Can we foresee a forecast rise in prices? “It is very likely that prices will increase for summer 2021 bookings,” warns Cruces, who summarizes several factors to justify his forecast:
“Prices had been adjusted downward due to low demand during the pandemic period, and as demand recovers it is logical that they will increase to return to previous levels,” he explains.
During the pandemic period there has been a contraction in supply. A lot of accommodation has closed and ceased activity. In the vacation market, many apartments have moved from short-stay rentals to long-stay modalities due to the stagnation of demand at the time. Now, with a very strong increase in demand and less supply, it is logical that prices may increase due to the law of supply and demand. It remains to be seen if, in the face of this increase in demand, part of those tourist apartments that have shifted to medium or long term rentals will return to the market.