Booking.com, Europe's leading online agency with a 71% market share, has just published its second Accommodation Barometer in Spain. Mireia Prieto, director of the platform for southwestern Europe, the Middle East and Africa, assures that the country remains among the main global tourist destinations despite the increase in hotel and plane prices. If there is a threat to this industry it is climate change, she stresses. In the last financial year, the Booking group had a turnover of more than 16,000 million euros and earned nearly 2,900 million.
Have expectations been met with the summer season? A new tourist record was almost taken for granted in the sector.
That's how it is. We started 2023 strong, and in the second quarter we reached 268 million reservations made on a global scale, 9% more than last year and 26% more than in the same period of 2019, which was already a very positive year . We have several indicators that tell us that it is going to be a very good year, with much longer average stays, lower cancellation rates and clients booking further in advance. We have not yet closed the quarter, but we believe that yes, it is going to be a record year for the sector and for Booking.com. We also foresee double-digit increases in total nights stayed compared to 2022 and an adjusted ebitda (operating profit) 20% above the previous year.
Accommodation prices have also risen to record levels. Isn't it slowing down demand?
The sector is optimistic. Our latest barometer indicates that 70% of accommodations affirm that their financial situation is optimal and 39% of them will continue investing in their establishments in the next six months. This means that, despite the challenges, despite the macroeconomic situation, the sector is strong and feels confident that it will really have a positive and reliable year. That is very important for innovation, for the economy in general and also, for our part, we are satisfied that we have contributed in some way to that success.
Is Spain becoming an expensive tourist destination?
The establishments we have surveyed tell us that their average price has increased by 10% compared to last summer. Demand has absorbed this higher than usual price, and accommodation occupancy has also increased by 10%. Therefore, they have made a coherent strategy in relation to price and occupancy. And in terms of demand, it should be noted that Spain is the only country along with the United States that has two destinations within the top ten of most sought-after places. Barcelona is at number four of the destinations with the most demand worldwide, and Madrid, at number eight. This shows the strength of the country.
What threats does Spain have as a tourist destination?
We see a threat in the medium and long term, and it is climate change. The temperature is increasing and drought episodes are more frequent, and it is possible that this will imply a transition of destinations, that demand will move to countries further in the center and north of the continent. It is something that can happen and where we must focus.
Do you already notice these effects? Are there tourists who don't want to come to Spain in summer because it is too hot?
We observe two things regarding the sustainability of destinations. On the one hand, more than 80% of those surveyed in our barometer affirm that they take sustainability criteria into account when choosing their accommodation, but only 39% are willing to pay more for it. On the other hand, beyond what each establishment or company does individually, public authorities can help guarantee certain consumption or facilitate investments to make destinations and establishments more sustainable places.
They started working mainly with hotels, but tourist apartments have been gaining weight in their offer. How is the ratio now?
We work with hotels, tourist apartments, tree houses, boats... Anything that is legal, complies with regulations and has a roof, can be published on Booking.com. In the city of Barcelona, we have had regulated tourist apartments in our inventory for 15 years and it is something that we have encouraged because we know that demand is looking for it. 34% of the nights booked globally on Booking.com are in tourist apartments. A very high percentage and very important for our business. We invest in that segment and it is among our priorities, because we know that it needs development and technology, and we, as a platform, can provide that information and that service to both the end user and the establishment.
Hotel chains are increasingly encouraging reservations from their own platforms, without intermediaries. They even give customers discounts if they book through their own website. Some users know this, they search for hotels on Booking.com and then book directly at the accommodation to get the discount. How do you manage this trend?
This is not new to us. We are a distribution channel and today establishments have a very wide variety of distribution to be able to reach the demand they need for their businesses to work. If we are able to provide that demand and that it, on many occasions, is transferred to your direct page, we believe that it is a value that we also contribute. It is part, I insist, of the added value and how this industry has always worked.
Brussels has designated this month the large technology companies that will now be subject to compliance with the new digital markets law (DMA), the new antitrust directive to reduce the excessive power of digital platforms. You have not entered this time, but you may do so in the future. How will these regulations change your business?
We have been talking to the European Commission for a long time now, we have established a collaboration and we have provided the data that has been suggested to us. Our predisposition is to maintain this collaboration and continue providing all this data. We are not in this first phase as gatekeeper in the DMA, but that does not mean that we will not be in the DMA. As we come from a pandemic, as we come from a difficult time, we have not yet met all the requirements to be inside. But if all those forecasts we have for this record year come true, it is very possible that by the end of 2023 we will be on that list, because we will probably exceed the 45 million monthly users in Europe established by law. When the time comes, if it comes, we will notify you and continue with the usual protocols.
But can it condition or limit them?
Our focus remains the same: innovation, the entire alternative accommodation segment, continuing to grow in the United States and Asia... Yes, we are clear that the entire regulatory part has to be solved and has to be in line with the demands placed on us. They ask for it in each place.
Booking.com has been developing new business verticals, such as the sale of airline tickets or car rental. They have recently purchased companies focused on other travel services. What objectives do these movements respond to?
Our ambition and where we aspire is to be a provider of the entire journey. Accommodation has a greater weight for us right now, because it is where we come from, but there are huge investments in everything that has to do with flights, transportation, experiences..., because our goal is to be able to achieve a connected trip , where the client has the ease of planning and enjoying their experience globally. We want technology to solve all those frictions we have when we travel. For example, buying a ticket, managing a possible delay, calling the restaurant... We are developing new technology for this, also with artificial intelligence.
