Spain has enjoyed a tremendous tourism boom over the past couple of years as fears of terrorism knocked the bottom out of cheap package trips to North Africa, Turkey and Egypt. But now the high demand is starting to push up prices.
British tour packagers, who are a big factor in the trade, sent 18 milllion visitors to Spain in 2016, and more this year. Now, however, the strain is starting to show. The CEO of Thomas Cook, one of the largest, told BBC last week that “we have not enough beds for all the demand” and predicted that prices would rise by about 10% for next year.
Because demand is already strong for next year, and because an improved Spanish economy means more domestic vacationers, there’s little incentive for hotel operators to offer discounts. As well, they hope to sell more rooms directly to individuals at higher rates than the packagers pay.
On the other hand, there’s also hesitation about building more capacity. Beaches are crowded, making new hotels at existing ones questionable, and the easing of travel restrictions for Tunisia and other areas, combined with a just-beginning revival of Turkish vacationing mean that as prices rise in Spain and other areas offer discounts, added capacity could become a drag.
