Spain’s hotels hope to beat pre-Covid levels this Easter week; Meliá, amongst the firms to play the recovery

MELIA CHINA lujoSpain hotels hope to beat pre-Covid levels this Easter week

Bankinter | The big Spanish hotel chains foresee occupancy levels this Easter week beating those prior to the virus. They all coincide in that the outlook is optimistic, despite the uncertainty fuelled by the conflict and escalating fuel prices. And in the majority of cases, they are are confident of exceeding or being very clost to pre-Covid levels during the Easter break.

In some case, bookings are up 15% on 2019. Prices are also above pre-virus levels, but the full rise in costs has still not impacted them, which could affect margins.

Bankinter analyst team’s opinion:

Positive news for the sector, which is starting the season off with good occupancy levels of between 70% and 80%. Our estimate is that tourism will continue to recover in 2022, reaching 85% of pre-virus levels (vs 50% in 2021). It will benefit from the release of demand after the virus, despite the war in the Ukraine and uptick in inflation.

With respect to the possible impact on margins, this will be less than in other sectors, taking into account that the hotel business is labour intensive, the rise in which is clearly below that of inflation. Our recommendation for the sector is a BUY, although with a lot of caution against this backdrop of greater uncertainty. Focus on companies like Meliá Hotels (MEL), AirBNB and Booking.