The tourism sector anticipates a summer of higher prices and increased delays

If you haven’t yet looked at booking your summer holiday, prepare for a sting in your wallet. If you have booked, prepare to be patient. The tourism sector is already anticipating higher prices and increased delays for the 2023 summer season.

In many ways, the sector has already seen a boost, particularly with positive occupancy figures, but we have already seen prices increase and delays and missed flights at airports due to passport checks for third-country nationals increasing post Brexit, and the airports are not yet operating at capacity, there are tensions in the workplace, and prices are already increasing, which is already pricing many families out of their budgets, and so dark clouds are ahead, according to, in particular,  the hotel sector.

The starting point is not particularly positive. In the summer of 2022, half of the scheduled flights in Europe suffered delays, according to Eurocontrol, the European Organisation for the Safety of Air Navigation. Almost 2,000 flights were cancelled every day, in months marked by a lack of personnel at large aerodromes, which could not recover pre-pandemic capacities in time. In this air chaos, one of the airports that fared best was Barajas, in Madrid, where only eight out of 10 flights were punctual.

Looking ahead to this year, quite similar situations are expected. One of those clouds is concentrated in the Netherlands, the Amsterdam airport, Schiphol, became the epicentre of delays and lost luggage in 2022, due to the fact that it did not have enough staff to deal with the recovery of flights after mobility restrictions. And, this year, it is shaping up to be just as problematic, which may have repercussions for the entire European airport network.

Added to the problems to reinforce staff, which remain, is the decision of the Dutch Government to reduce its capacity, to try to reduce pollution and noise levels, in an infrastructure located 20 kilometres from Amsterdam. This decision is being implemented gradually: first, a ceiling of 500,000 flights per year has been set and, as of November, they will be reduced to 460,000.

Eurocontrol has also warned that there are still “bottlenecks” in the sector due to the increase in demand. This year will be when operations with large Asian markets, such as China or Japan, fully recover. For 2023, the air supervisor speaks of “challenges” and assumes that all the actors are going to have to make “formidable efforts” to face capacity problems and delays.

Along the same lines, IAG -the parent company of Iberia, Vueling and British Airways- has expressed its ” concern ” about the preparation of the London Heathrow airport for summer. This airport, controlled by Spanish firm Ferrovial, already had to limit operations and the number of users during the last summer campaign and asked the airlines to restrict the sale of tickets for flights operated to or from that infrastructure, simply because it did not have capacity or means to deal with it.

Lufthansa CEO Carsten Spohr assumed during the annual results presentation that the problems of 2022 are still there. In the case of the German company, for this season, it plans to recover between 80% and 90% of its capacity prior to the pandemic. Other companies, such as IAG, do plan to operate at 100% this year.

Lufthansa also acknowledged that the operators, especially those in central Europe, continue to have problems finding staff to operate at their airports. A situation similar to that of 2022, when tensions with the workforce and claims to improve their working conditions increased. In Spain, the airline employers, ALA, are asking for are more reinforcements from the State Security Forces and Corps because the queues occur at the controls of international flights, made significantly worse by travellers from the UK having to join those queues in a post-Brexit world.

Airport workers are not the only ones asking to improve their employment situation. In recent weeks, strikes by Air Nostrum pilots, Iberia’s regional flight leg, have been taking place in Spain. It is not a local situation. In the United States, those of American Airlines will vote in April if they go on strike to demand a salary increase, which has already been carried out by other US companies, such as Delta, which, in early March, approved a salary increase for these professionals. of more than 30% until 2026.

The we have the prices. The chief executive of Lufthansa acknowledged that the fares paid by citizens to fly are 20% above pre-pandemic levels. It is not something that touches only conventional airlines. Already last summer, the CEO of Ryanair, Michael O’Leary, announced that the time for very low-cost travel had come to an end. In an interview, O’Leary assured that “there was no doubt” that the very cheap prices, between one and 10 euro, “you will not see them again in a few years.”

That same path is the one that hotel companies are taking, taking advantage of the high demand to maintain upward pressure on prices. Its billing is already, in fact, skyrocketing, even before Holy Week arrives, where occupancy figures are expected to be higher than those of 2019, the record year.

The latest official price data corresponds to the month of February. In it, the average daily billing for each occupied room (called ADR) was close to 100 euro, according to figures published by the National Statistics Institute (INE). On average, a room cost 99.8 euro in February in Spain, 13.2% more than the same month in 2022. It is 20% more than before the pandemic. In February 2019, hotels stayed below 84 euro per night, in a month that is considered low season, except in Carnival destinations.

The hoteliers already warned in the last edition of Fitur, the international tourism fair, that they did not see a ceiling on their prices. One of the chains with the greatest presence in Spain, NH, announced that it expects this to be the best year in its history in terms of turnover.

The Minister of Industry, Commerce and Tourism, Reyes Maroto, called on the companies to “contain” prices during an interview with the director of Ignacio Escolar.

“I would ask them for price containment,” Maroto claimed. Despite the “inflationary environment”, he recalls that “almost two years with restrictions, travel would have to be affordable” for families, regardless of their budget.

However, much in the same way supermarkets are not listening to the government’s “requests”, there are no signs that the travel industry are looking at controlling their prices, and instead, the costs for both flights and hotels are far higher for those who can afford it, and becoming increasingly out of reach for those who can’t.