Going on vacation for a week in the country costs 19% more than in 2019, while household income has only grown by 4.6%.
The comment among those who can afford a vacation is recurrent: “Everything is expensive this year”. And it is not just a simple feeling. Summer holidays in Spain have never been as expensive as this season, which is now entering its final stretch. The price of hotels in July has set an all-time record, as published by the INE this week, gasoline has reached prices never seen for the date and airline tickets in Europe have risen an average of 22% over the same month of 2019, according to recalculated Eurostat data.
But while some celebrate it by claiming that this is the path to follow so that Spain does not compete on price with other tourist markets, but on quality, for part of the population spending a week’s vacation in their own country has become a luxury. Has Spain, the mecca of world tourism, become too expensive for Spaniards?
Second destination worldwide: Spain is on track to reach 83 million foreign tourists again.
Accommodation, transport, catering, activities… All the analyses point to a sharp rise. “These are prices that are more suited to foreigners or locals with high purchasing power,” summarizes Josep Maria Raya, professor at Tecnocampus (Universitat Pompeu Fabra) and director of the Tourism Research Center of the Maresme University School.
Taking as a reference an analysis by the tourism consultancy Mabrian, which has monitored the rates offered by 15,000 hotels between the first week of June and the last week of September, a four-star hotel in Spain -the type of accommodation with the most users- costs on average 154 euros this summer -see graph-. This is 17% more than in 2019, the year prior to the covid crisis that the sector takes as a reference, explains Carlos Cendra, manager of Mabrian. The average price of a plane ticket to fly to Spain during July, also counting internal flights between cities in the country – continues Cendra – reaches 200.56 euros. If we apply the increase observed by Eurostat (22%) to the airfare and add the cost of a week’s stay in a four-star hotel, vacations this season are 19% more expensive than four years ago. An increase that companies in the industry attribute to the rise in energy, labor and input costs, of between 27% and 30% in total, says Juan Molas, president of the business association Mesa del Turismo.
The main outbound markets have more purchasing power and push prices upward
However, not all tourists suffer equally from this rise in prices. The United Kingdom, France, Germany, the Nordic countries, Italy and the Netherlands are the main issuers of tourists for Spain, which in 2019 received more than 83 million foreign travelers -thus becoming the second most visited country in the world- and this year is on track to equal or exceed the record.
These are citizens with an average salary or household income higher than Spaniards, however much their economies have also experienced the rigors of inflation and rising rates. So that the 154 euros of accommodation mentioned or 114 euros that cost on average a hotel room in Salou last month (INE data) do not entail the same effort for the thousands of French or English tourists who come to this town on the Costa Daurada every summer as for the Aragonese, the Basques, the Valencians or the Catalans (50% of its tourism is local) who also tend to fill its beaches. The average salary in Spain is 20.9% below the EU average (2,302 euros gross per month), as Adecco recalled a few days ago, and all major tourist source markets enjoy higher salaries, including the British – about 2,986 euros in 2022 according to the UK Office for National Statistics.
The number of people who cannot afford to travel is slightly up on 2019.
Even more relevant is the disposable household income. The cumulative increase of this in Spain has been 4.6% between 2019 and 2022 (falls -0.32% in 2020, increases 3.1% in 2021 and 3.7% in 2022), while cumulative inflation was 11.4%, highlights UAB professor Josep Oliver. As for accumulated savings, it has been fading and in 2022 it already dropped significantly – from 7.9% it reached a peak of 17.5% in 2020, while last year it fell to 7.2%. The latest report on the situation of households by the Bank of Spain puts the loss of purchasing power of families at 4.5% between 2020 and 2022.
The INE living conditions survey also reflects a slight growth of citizens who say they cannot afford a week’s vacation away from home after years of decline -leaving aside the year of confinement-. If in 2019 it was 33.4% of the population, in 2022 it was 33.5% -1.8 points more than in the previous year-.
Companies in the sector detect a reduction in the average stay and less ancillary spending
With these factors, households are heading into the current summer, the most expensive on record. The companies of the sector identify some strategies of the clients to adapt the pocket, such as reducing the days of stay. “If before with a family you occupied a hotel room or a camping bungalow for two weeks, now you need two or three families,” says Xavier Guardià, spokesman for the Federation of Hospitality and Tourism in the province of Tarragona, as an example. Business associations also point to a reduction in spending on ancillary activities, such as eating out or shopping. The money available tends to concentrate on transport and accommodation. “Services with inelastic demand, such as flights or hotels, are the ones that benefit most from this price increase; however, once you pay this, you have less money for restaurants or stores,” says economist Guillem Lopez Casasnovas. He has observed it, moreover, this summer in Menorca, where he is originally from and where he spends a season. “The price of a night in a hotel is very high, but occupancy is high, and on the other hand, restaurants complain that they have fewer customers,” he stresses.
Some real-time data also indicate that Spaniards are traveling somewhat less these months. Ricardo Fernández, general manager of Destinia, comments that reservations by citizens for their own country have fallen by 5% compared to last summer, and for August there has also been a decrease in reservations to travel abroad.
This is not a phenomenon exclusive to Spain, as argued by CaixaBank Research economist Javier Ibáñez de Aldecoa in a recent study on tourist inflation. Italy, Greece and Portugal have also seen sharp price rises, to the point that Greek citizens are lamenting the difficulty of paying for a vacation on their famous islands, according to the country’s press. In Italy, in turn, there has been a boom of people vacationing in neighboring Albania, which is much cheaper… thus pushing up prices for Albanians. The heads and tails of the vacation.