Spain’s rising occupancy rates hint at accelerating market recovery

Spain: As Airbnb hones in on destination and domestic travel for the time being, occupancy rates in Spain in properties listed on the rental platform are seeing a marked rise as the country gears up for the summer, despite the lingering shadow of uncertainty posed by the Covid-19 pandemic.

Using data provided by vacation rental data and analytics metasearch engine, AllTheRooms Analytics, we can view and analyse Spain’s short-term rental market recovery through the prism of the country’s 90-day occupancy rates through Airbnb’s booking platform.

Spain’s 90-day Airbnb occupancy rates, the percentage of nights that properties listed on Airbnb are booked over the next 90 days, reached 17.6 per cent as of 31 May, a 29 per cent increase on the previous month. While it still represents a 44 per cent drop compared to 2019 levels, precautionary levels of optimism for a market recovery can be applied.

According to AllTheRooms’ data, the northern region of Galicia saw the greatest rebound, with 90-day Airbnb occupancy rates as of 31 May increasing by 77.2 per cent compared to 30 days ago. It also had one of the lowest drops in occupancy year-on-year, as the rate hit 19.8 per cent on 31 May, signalling a 35.8 per cent decrease compared to in 2019.

Meanwhile, Almeria in Andalusia experienced the second highest month-over-month rebound as of 31 May, an overall increase of 31.7 per cent in Airbnb 90-day occupancy rates. While its month-on-month increase was higher than the national average, there was still a significant, 36.8 per cent year-on-year drop in Airbnb occupancy in the city.

One reason for Galicia’s sharp rise in occupancy rates, compared to other areas in Spain, would be the fact that it was one of the first regions to enter Phase One of the “new normality” on 11 May, along with Asturias, Cantabria, the Basque Country, La Rioja, Navarra, Aragón, Extremadura, Murcia, Canarias, Baleares, Ceuta and Melilla. Under Phase One, people were able to make visits to family and friends, shop without a prior appointment, and spend time on restaurant or bar terraces, before Galicia moved to Phase Two on 25 May.

Here is the breakdown of rebounds in occupancy rates as of 31 May in Spain:

1. Galicia: a 77.2 per cent rise in occupancy compared to the previous month

2. Almeria: a 31.7 per cent increase in occupancy rates

3. Rioja: a 26.8 per cent rise in occupancy rates, reaching 12.1 per cent occupancy on 31 May

4. Tenerife: saw a 24.1 per cent month-on-month rise in occupancy, reaching 16 per cent at the end of May

5. Ronda: a 20.2 per cent rebound in occupancy levels compared to the previous 30 days, stabilising at 17.8 per cent

6. The Balearic Islands: saw the sixth highest month-on-month rebound in occupancy of 18.9 per cent, and 24.8 per cent occupancy overall in May

7. Alicante: experienced a 7.2 per cent growth in occupancy on 31 May, and 20.6 per cent overall occupancy in May

8. Cordoba: saw a month-on-month rise in occupancy by 6.6 per cent, reaching 13 per cent as of 31 May

9. San Sebastian: had the ninth highest rebound with an increase of 6.1 per cent as of 31 May, levelling out at 16.5 per cent occupancy at the same time

Cities that did not see a growth in Airbnb occupancy over the last 30 days were Valencia, Barcelona, Granada, Madrid and Seville. However, while those areas had higher than average year-over-year drops compared to other regions and cities, they did show signs of rebound in the past seven days.

1. Valencia: reached 12 per cent occupancy on 31 May, a 7.9 per cent increase on the week before, despite a 1.3 per cent month-on-month drop in occupancy

2. Barcelona: achieved 10.4 per cent occupancy as of 31 May, a 9.5 per cent week-on-week increase in Airbnb occupancy, despite a 2.1 per cent month-on-month decrease in the same category

3. Granada: experienced 9.3 per cent Airbnb occupancy on 31 May, and a 9.2 per cent rise compared to the week before, although month-on-month occupancy was down by 3.1 per cent

4. Madrid: had a week-on-week growth of 5.1 per cent in Airbnb occupancy to 8.9 per cent as of 31 May, despite a 6.3 per cent month-on-month decrease

5. Seville: saw the highest month-on-month drop in occupancy [nine per cent] to 12.1 per cent on 31 May, but achieved a 6.9 per cent week-on-week growth in Airbnb occupancy rates

AllTheRooms also analysed Spain’s short-term rental market recovery by recently introducing its Forward Booking Index, which tracks the percentage of properties being booked each day over the next 180 days.

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The Forward Booking Index for occupancy rates in Spain [Credit: AllTheRooms]

As the graph with the latest data shows, there is set to be a peak in occupancy rates in the next 60 days at just under 30 per cent, before a gradual decline sets in over the following 120 days. While the rates are still significantly below 2019 levels for understandable reasons, analysts will be optimistic that the latest data is predicting higher occupancy rates than at this stage a week and a fortnight ago.

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The overall picture in Europe [Credit: AllTheRooms]

Spain’s current travel restrictions to combat the spread of the coronavirus order all foreign visitors into the country to stay in quarantine for 14 days, however it is making imminent plans for the travel industry to open up over the next few weeks.

In terms of domestic travel, Spain expects to resume it on 22 June, with exceptions being made for special cases such as cross-border workers, healthcare professionals [particularly for elderly citizens] and Spanish residents.

International tourism is scheduled to open up once more from 21 June, Prime Minister Pedro Sánchez said on Sunday. Spain will reopen its borders to the majority of the other European Union countries on that date, however, the border with Portugal will remain closed until 1 July, at Lisbon’s request. There will also stuttered reopening stages across the various Spanish islands and regions.

According to The Guardian, the Canary Islands are partnering with the World Health Organisation [WHO] to be the first destination in the world to trial the production of digital health certificates. As such, flights to the islands will carry passengers who will have Hi+Card “secure health applications, certifying that they are officially “free of Covid-19”.

When travel restrictions are lifted later this month, it is believed that Spain will screen travellers by using thermal imaging and e-forms as a way of detecting for coronavirus.

The UK Transport Secretary, Grant Shapps, has also openly admitted that the country is looking at the possibility of opening up air bridges, or “travel corridors”, with supposed “low-risk” countries such as Spain and Portugal, to ensure holidaymakers can still venture abroad this summer.

Other Spanish hospitality outlets, including outdoor restaurants, bars and hotels are beginning to open up in stages, meanwhile residents of nearby countries such as Andorra and Gibraltar are not covered by the updated regulations for domestic travel in Spain.

As the typical peak holiday season approaches for holidaymakers in Europe, further restrictions are expected to be eased in the coming weeks as countries seek to salvage their tourism industries and recoup revenue for their respective hospitality sectors. This looks set to lead to another rise in Airbnb occupancy rates around the continent, although with a higher proportion of domestic travellers than overseas tourists largely due to increased traveller caution caused by the Covid-19 pandemic.

Further traveller trends will be outlined in the coming weeks and months, but for now, Spain and other European countries will be looking at how they can plot the recovery of their short-term rental markets in a way that guarantees the safety and security of guests in this pandemic period.