Hotel prices in the Canary Islands have gone up 65% in five years


  • 23-12-2023
  • Business
  • Canarian Weekly
  • Photo Credit: Wikimedia Commons
Hotel prices in the Canary Islands have gone up 65% in five years

The Canary Islands continue to set official records in 2023, with unprecedented economic performance in the tourism sector. The latest reports indicate that the archipelago is on track to close the year with some of the best figures in its history, particularly in terms of key variables.

These include operator revenues, notably from hoteliers, the number of visitors, expected to reach around 16 million people (including both domestic and international travellers), mirroring the record-setting year of 2017 (15.9 million), and foreign tourists' spending, anticipated to be €20 billion this year, driven by approximately 14 million foreign visitors, predominantly from the UK and Germany, accounting for nearly 60% of the total received in 2023.

In November, during the peak tourist season in the Canary Islands, this positive trend continued, as reported by the National Institute of Statistics (INE) based on data from its Hotel Tourism Situation survey.

The clear conclusion drawn from these findings is that the hotel business (and tourism in general) in the Canary Islands, despite the challenges posed by the COVID-19 pandemic, is thriving.

Evidence of this prosperity is the archipelago's remarkable average increase of 65% in hotel prices over the past five years, measured on a 2008 base index of 100, according to the Hotel Price Index (IPH). The IPH provides insights into the temporal evolution of prices received by hotel entrepreneurs from all sources, including households, businesses, tour operators, and travel agencies.

The INE asserts that the IPH is continuously compiled each month with a comprehensive sample covering three-star or higher hotels across all provinces in Spain.

This spectacular rise in the nominal value of services provided by island hoteliers is the highest among Spain's regions, doubling the national average increase of 32% for the same period of analysis. Additionally, over the last 12 months, the annual price increase in the Canary Islands stands at 7.2%, slightly below the national rate of 8.6%.

These positive economic indicators can be attributed, among other factors, to the high levels of hotel occupancy in the Islands during the peak months of 2023 and, as a general trend, throughout the year. Consequently, there has been an increase in revenue per occupied room and the average revenue per available room.

Once again, the Canary Islands boast the highest average nightly hotel room price in Spain, with an Average Daily Rate (ADR) of €132.90, marking an 8.9% increase from the same month in 2022. Due mainly to high occupancy, the parameter for the average price per available room in hotel spaces is €117.90 per night (RevPar) in the islands, a 14.3% increase compared to the same period the previous year. Madrid ranks second in both categories, with €120.30 and €92.81, respectively.

The main tourist areas of Costa Adeje and San Bartolomé de Tirajana:

Nationally, the largest increase in hotel prices compared to November 2022 is observed in the Valencian Community (11.4%), while the smallest increase is in Extremadura, with a rate of 1%. In terms of hotel categories, the highest increase occurs in three-star gold establishments (11.8%).

Regarding the profitability of the hotel sector, it is noteworthy that the average daily revenue per occupied room (ADR) was €104.90 in November, representing a 9.9% increase from the same month in 2022.

Conversely, the average daily revenue per available room (RevPar), influenced by the occupancy recorded in hotel establishments, reaches €67.10, indicating a 15.1% increase.

By categories, the average revenue is €228.60 for five-star hotels, €109.60 for four-star hotels, and €82.60 for three-star hotels. The revenue per available room for these same categories is €151.50, €80.20, and €54.20, respectively.

Marbella boasts the highest ADR, with an average daily revenue per occupied room of €173.90. Adeje presents the highest RevPar, with revenue per available room reaching €152.80.

In terms of tourist areas, the South of Tenerife achieves the highest occupancy rate (78.7%), and Tenerife records the highest weekend occupancy rate (80.3%), along with the highest number of overnight stays in November.

The tourist points with the most overnight stays are Madrid, Barcelona, and San Bartolomé de Tirajana (Gran Canaria). Adeje boasts the highest occupancy rate (81.1%), while Puerto de la Cruz achieves the highest weekend occupancy rate (83.5%).

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