Major Spanish Timeshare Destination in Serious Trouble
According to an article published in the Sur in English Newspaper, the tourism industry has fallen into a coma on the Costa del Sol. The sector has failed to recover its pulse after the 100 days of forced closure during the Covid-19 national lockdown period.
The state of alarm declared by the Spanish government in mid-March came after just two months of normality in 2020; and those would ordinarily be the quietest months of the year.
The long-awaited peak season failed to meet expectations and only worsened the crisis caused by the pandemic. The sector has had to face the costs of reopening, with the complication of having to follow strict health and hygiene protocols to guarantee the safety of staff and guests.
Many establishments were forced to make adjustments to their properties to accommodate social distancing; such as creating a second entrance or additional space, all of which came at a further cost.
Safety was a priority and it was the sectors main mission to accomplish during the pandemic, a zero Covid-19 contagion in tourist establishments on the Costa del Sol.
The sector now faces a final quarter of the year with closures across the board, affecting 80 per cent of hotels, all night clubs closed and restaurants restricted to limited capacity and opening times.
“We can consider this year to be dead,” said a concerned president of the Costa del Sol hoteliers association (Aehcos), Luis Callejón Suñé, last week.
A look at the figures for the year confirms the dreary prognosis.
- Tourist accommodation as a whole – that is, hotels, campsites, holiday lets and rural cottages – lost 3.4 million visitors and 14 million nights compared with the same period of 2019.
- Between January and August no more than 1.8 million visitors stayed in tourist accommodation, compared with the 5.2 million in 2019.
- Those 1.8 million visitors checked in for 6.5 million nights, far from the 20.5 million registered in the same period of 2019.
Figures provided by Spain’s National Institute of Statistics (INE) and quoted by the Costa del Sol tourism authority.
To get a better idea of the cosmic size of the disaster; for hotel accommodation, the 1.4 million visitors that arrived during the first eight months of 2020, is the equivalent of the total for the month of March alone in 2019.
The occupancy of the Costa’s hotels has fallen to an average of 37% of rooms booked between January and August, compared with 62.7% in the same period of 2019.
The statistics also show how the pandemic has affected the profitability of hotels. This was an issue that the industry had only recently managed to recover from, following the financial crisis that led to prices being frozen for a decade.
Revenue
The RevPAR figures (Revenue per Available Room), a gauge used to measure hotel profitability; confirm that the sector has gone back to where it was 10 years prior.
- Profitability has fallen 44%, going from an average of 71.4 Euros between January and August 2019, to 39.8 Euros in the same period of 2020.
- Prices have plummeted, going from an average price per room of 124.64 Euros in August 2019, to 50.9 Euros in August 2020.
While the hotel sector is one of the most affected; for a variation of reasons, such as the high maintenance costs and volume of workers needed, the holiday rental market has witnessed the bursting of the bubble that was swelling healthily before the start of the pandemic.
The president of the Andalusian Association of Tourist Properties (AVVA), Carlos Pérez-Lanzac, said that, while official figures are not available, the sector has seen its revenue fall by 80%, causing losses of 70 million Euros in the province of Malaga alone, so far this year.
“In the summer we managed to reach 56% occupancy, when the forecasts indicated 45%. However, you have to bear in mind that around 10% of properties have switched from holiday lets to long-term rentals and a similar number have not been operative at all. What’s more, prices this peak season have fallen by between 30 and 40%,” he said.
Airport passengers
The paralysis in demand has also been felt at Malaga Airport where activity has been concentrated in just one terminal during the pandemic, first in T2 and now in T3.
- More than 9.5 million fewer passengers used the airport in the first eight months of the year of 2020, than the volume for the same period of 2019.
- No more than 4.1 million passengers travelled on 41,756 flights from January to August in 2020, compared with the almost 100,000 flights recorded in 2019, which transported more than 13,650,000 passengers.
- In September the passenger figures fell to just over 366,000, 82% down on the same month of 2019.
Meanwhile, the cruise terminal at Malaga Port has received no visitors for more than six months. It is expected that the year will end with no more than 40 ships visiting the port, far from the 278 registered in 2019.
Cruise passenger figures have plummeted 90% to 40,172 in the first quarter of the year, according to figures provided by the port.
The crisis has been felt more by the tourism industry on the Costa del Sol due to its greater dependence on international visitors than other areas, the former president of Exceltur, José Luis Zoreda, told the SUR.
Figures from the survey of frontier movements carried out by the INE show that during the first eight months of 2020 only 2.3 million foreigners travelled to the region of Andalucía, that is, 72.6% fewer than in January to August 2019, when 8.3 million visitors arrived in the region.
In the same eight months of 2019, the 8 Andalusian provinces received revenue of 8.5 billion Euros from international tourism; this year the figure has stopped at 2.4 billion: a drop of 71.5%.
With the poor peak season behind, experts agree that the worst is still to come. The lack of demand is likely to continue as business owners dread having to start to pay back the ICO loans which have been keeping their heads above water since March.
There is now uncertainty about whether they will be able to reopen for Easter 2021 and even about what will happen next summer, with schedules yet to be signed with tour operators.
In just a few weeks’ time the industry would be heading for the World Travel Market (WTM) in London; which has now been cancelled and replaced by a virtual version, where they would normally close these deals.
How Timeshare is Affected
The impact of the pandemic has created havoc with the timeshare industry on the Costa del Sol. The largest resort, Club la Costa World announced last week that they were closing all their sales offices until further notice.
Quite an obvious stance, given that with no tourists there will be no sales. It is also of interest that Club la Costa have embarked on a marketing campaign on a local Costa del Sol radio station aimed at renting their properties to the regions residence, obviously in an attempt to bolster income from what is effectively a closed resort.
Many other resorts are completely closed, which is quite unusual even in the winter season. But the reality is that the entire holiday and hospitality industry; of which timeshare is a part, has been decimated by the pandemic.
However with timeshare there is a key difference. Maintenance season is rapidly approaching, that time of year when the resorts deliver their demands for the 2021 annual fees. This means yet more financial expense to be paid for holidays that may not ever happen; especially for those owners with allocations between January and March.
So the question remains; “are timeshare resorts acting appropriately or are they profiteering from their owners plight, whilst the rest of the travel sector takes a direct hit?”
For more information regarding this article or assistance in any other timeshare related issues please contact the TCA on 01908 881058 or email: info@TimeshareConsumerAssociation.org.uk