Everything was going so well, there was a “lively flow of bookings”… And then, Vladimir Putin invaded Ukraine. The president of the Pitiusas Hotel Businesses Federation, Ana Gordillo, speaks of the pre-war period as an arcadia: the uncertainty of the pandemic was fading, everything pointed to a wonderful season, “of recovery”, in which the lost tourists would be recovered. That hope has vanished since the tanks, missiles and Su-25s started destroying Kiev and Kharkov: bookings “have slowed down” since then, says Gordillo, who says that “tourists prefer to see how the war evolves rather than to buy”.
José MarÃa Ramón, CEO of the booking engine Neobookings, sees the glass as half full: yes, they have slowed down, but “bookings are still coming in,” he says. “We are growing above 2021. Not at a brutal pace, but there are more sales every day. At least we are not going backwards. Ramón is confident that they will start to rise in May and firmly believes that last-minute purchases will once again be the protagonists, as in 2021.
Already in March, it has grown again, “but not as much as in previous months”. In fact, British bookings (Ibiza’s main market) have fallen by 33% so far this month compared to the same period in 2021
According to the graphs that Ramon produces from data from the booking engine, in January there was a significant increase basically due to British tourists who travel with tour operators such as Jet2. But that upward curve was broken by the invasion, especially on 26 and 27 February. Then, in March, it has grown again, “but not as much as in previous months”. In fact, British bookings (Ibiza’s main market) are down 33% so far this month compared to the same period in 2021, which was already weak, while Italian bookings are up 216%, German bookings are up 41%, Swiss bookings are up 127% and French bookings are up 103%. The Dutch, who were the biggest percentage gainers in the first two months of 2022, only recorded a rise of 20% in March. However, those of Spaniards fell by 6%. Ana Gordillo, however, is confident that the national tourist will once again come to the rescue, as in 2020 and 2021. She also expects 100% of the hotel sector to be active in June.
Traveling in the changing era
On a month-to-month basis, in March bookings grew by only 17% compared to the same month a year ago, while in January they increased by 215% and in February by 187%. They are growing, but not at the same rate as before the Russian attacks. Even so, Ramón sees it as “positive” that there are tourists who continue to think about coming to Ibiza after the pandemic and the current threat of a nuclear holocaust.
“I think that fear also makes people want to enjoy themselves as soon as possible… lest we are now attacked by aliens or the dreaded red button is pushed”.
Ramón, a born optimist, offers another positive fact: the rate of booking cancellations in this quarter is 24%, when in the same period of 2019 it was 32% and in 2021 the year closed with an average cancellation of 40%. “It is true,” he explains, “that now bookings are much more flexible. People have learned to modify them and manage them better. But they have also realized that they live in a changing era. They are increasingly used to living with uncertainty. I think fear also makes people want to enjoy themselves as soon as possible… lest we are now attacked by aliens or the dreaded red button is pushed”. In that sense, the island, as a refuge destination, far from the possible operation center, also plays in favor of this destination, he points out.
Other data for optimists: “There is a high increase in the average stays. Those between 7 and 10 nights are up 9%, and those over 10 nights are up 6% compared to 2019 for the same dates.” In addition, prices are 9% more expensive than in the precovid period.
A “sluggish” Easter
Precisely, Alicia Reina, president of the Spanish Association of Hotel Directors (AEDH), warns that prices will rise. Hoteliers have no choice, she warns, given the runaway inflation: “It is going to get worse -she points out-. The increase (in goods, in salaries, in fuel, in energy…) will be transferred to the holiday sector, and this will be passed on to the client, so that the tourist who in these circumstances is able to come to the islands this season will have a high purchasing power”.
“Inflation is going to get worse. It will be transferred to the holiday sector, and this will be passed on to the client, so that the tourist who in these circumstances is able to come to the islands this season will have high purchasing power”
Reina assures that the sector “has already felt the impact of the war”. Like the CEO of Neobookings, she recalls that before the shots were fired “there was a good rhythm of bookings”, but afterwards “it has slowed down quite a lot”. “The customer,” says the hotelier, “in view of this conflict, is trying to book for later in the hope that the war will be over as soon as possible. She does not expect much for the month of April: “Easter will be sluggish. And May, we’ll see. And that affects the labor market in parallel: “In Ibiza there is a shortage of staff, which forces us to recruit as soon as possible. If you take too long to hire, another hotel that opens earlier takes them away from you. But opening with a full staff when the accommodation is empty is complicated”.
José Antonio Roselló, vice-president of the Balearic Islands Confederation of Business Associations (CAEB) analyzes the situation from two points of view: the emotional and the economic. Emotionally, the images of missiles falling on residential neighborhoods and the threat of the conflict spreading to NATO countries “have already slowed down the pace of bookings”, because “people are disconcerted, they don’t know what will happen”.
“It is taken for granted that if the invasion is prolonged, the growth rate will fall and some European countries will go into recession, which in turn will also stop the tourist bookings”. And everything points to the fact that the solution is not imminent, but rather the opposite
From the economic point of view, Roselló warns that “it is taken for granted that if the invasion is prolonged, the growth rate will fall and some European countries will go into recession, which in turn will also stop the tourist bookings”. And everything points to the fact that the solution is not imminent, but rather the opposite. In this sense, the vice-president of the CAEB believes that we must stop thinking “only in the short term”. In his opinion, “more important than what happens this tourist season is what happens in the following seasons. If, as it seems, the conflict is going to last, it will have many lasting economic effects. We must have a medium-term vision in Eivissa that forces us to focus on the quality of this destination, which must be improved”.
“The 10 year and 5 year rates are very close. This means that the markets foresee a situation of stagnation or recession”
On what basis is it believed that the confrontation between Russia and Ukraine is going to last? On interest rates: “The 10 year and 5 year rates are very close. This means that the markets are expecting a situation of stagnation or recession. So we have to look beyond the short term and think that, today, the economy could get worse. And in that (worsening) scenario “demand will be reduced and we will have to fight harder for each customer. The situation will be complicated for all destinations.
For the full article, please visit Diario de Ibiza website here.