The Majestic, a luxury hotel in downtown Barcelona, is bumping up room prices by two thirds as delegates including Facebook Inc. founder Mark Zuckerberg troop into Spain’s second city for the annual Mobile World Congress.
“This is the biggest week of the year for hoteliers,” said Santiago Martin, communications manager for the Majestic Hotel Group, by phone. The hotel, which normally charges 300 euros ($333) a night for a standard room, will charge 500 euros as the annual gathering of the mobile industry draws almost 100,000 visitors to Barcelona, he said.
Barcelona’s tourism and conference trade is proving a bonanza for its hoteliers as economic growth lures business at the same time that the City Hall is trying to limit the number of visitors to Spain’s second city. Mayor Ada Colau, who was elected last year on a platform with anti-austerity party Podemos, has frozen new hotel licenses for a year in a bid to limit the amount of tourists flooding to the city.
“Barcelona is an unstoppable beast at creating hotel room demand because of its charm, its climate and the number of conferences it hosts,” said Miguel Vazquez, a partner at Madrid-based real estate and hotel consultancy Irea, in a phone interview. “Current hotel owners are very happy with the moratorium and they are sitting on real treasure troves.”
In an interview with El Pais newspaper last year, Colau said that Barcelona had to act to stop new hotel openings to prevent the city from being swamped by tourists because the situation in its Old Town was already out of control. She said the city would have to act to limit the supply of tourist room “if we don’t want to be like Venice.”
The number of international tourists visiting Catalonia, the Spanish region whose main city is Barcelona, has almost doubled since 2001, climbing to 17.4 million last year, according to the National Statistics Institute. Barcelona needs time to assess its hotel needs and is not against attracting international visitors, said Agusti Colom, a commerce and tourism manager for central Barcelona.
“This is about dealing with areas that are highly congested and over-crowded,” said Colom by phone. “In terms of infrastructure, it can’t be just about hotels, this city needs office space for example. It’s a way of diversifying.” He said the city might start processing new hotel licenses as soon as April.
Even so, the result of the moratorium has helped existing hotel owners who can raise prices because the supply of rooms can’t meet demand from visitors, said Ismael Clemente, chief executive officer of Spain’s largest real estate company Merlin Properties Socimi SA, which owns three hotels in Barcelona.
Hotels in the coastal city in north-eastern Spain famous for its Gaudi architecture, beaches and eponymous football club had an average occupancy rate of 76 percent last year, according to data compiled by hotel industry researcher STR Global.
That outstrips the average for Spain and Europe at around 70 percent. The average daily rate charged by hotels grew 7.2 percent to 128 euros per night, compared with the average of 113 euros per night for hotels in Europe and 94 euros per night for hotels in Madrid, according to STR Global.
“When supply doesn’t meet demand, there’s a tendency to raise prices,” said Clemente in an interview. “We have no plans to sell — our hotels are very well let.”
The Mobile World Congress last year attracted more than 94,000 attendees from 200 countries. More than 3,800 journalists covered the event attended by 2,200 companies. This year’s keynote speakers include Zuckerberg, Vodafone Group Plc Chief Executive Officer Vittorio Colao and Ford Motor Co. Chief Executive Officer Mark Fields.
Some of Barcelona’s most popular hotels, including the Arts and the W Barcelona said they were sold out for the week. Revenue per available room, a gauge for profitability, stands at 97 euros in Barcelona, according to STR Global. That compares with an average of 80 for hotels in Europe and 65 euros for those in Madrid.
“We’re 100 percent booked for the week,” said Martin of the Majestic. “It’s practically all corporate clients visiting Barcelona for the Mobile World Congress.”
This article was written by Maria Tadeo and Sharon Smyth from Bloomberg and was legally licensed through the NewsCred publisher network.