Alicante hospitality suffers worst July in years, and August looks no better
Alicante's hospitality sector is enduring its worst July in years, as high prices and poor quality drive tourists away. August points to the same trend.
English · Original discussion in Spanish · Published
The worst July for Alicante's hospitality: the bill for the menu
Alicante's hospitality sector has just posted its worst July in years, and August is heading in the same direction. The claim sounds like a lament, but the causes lie not only in the weather or a supposed drop in tourism: prices themselves have turned the restaurant into something to be haggled over face to face.
Going out every day is over. Customers have learned to dodge expensive dining: they spend fewer days away, go to the supermarket, cook in the apartment or make a sandwich on the beach. They still go out, but with tactics to cut spending in restaurants and hotels. And when they do sit down at the table, they scrutinize whether the dish justifies the price.
Demand takes its revenge through prices
Textbook microeconomics says that once the break-even point is reached, supply must adjust its prices. Alicante's restaurateurs have done the opposite: raising rates further to make up for the loss of customers. The result is a vicious circle that some try to hide by blaming others' abusive prices, such as those who travel from Madrid or those doing low-cost tourism.
Not everyone is moving at the same pace. The experience of someone calling a mid-to-high-priced restaurant and being told "we're not taking any more bookings" at nine in the evening shows that demand still responds when the product convinces. Against that, places serving food even cats wouldn't touch complain that Mercadona won't let them sell low-quality set menus at 18 euros.
A warning for Spain's tourism model
Spain has clung to tourism as its only industry, and this summer has sent a signal of exhaustion. If travelling and eating out become luxury goods, as they were in the sixties and seventies, the country will be doomed to misery: no industry, no R&D, and a state devouring what little is left. The outlook for August is for even more restrained spending, and the only way out for local hospitality is to lower prices, improve the offering, or both. And judging by what the sector is lamenting, it remains to be seen whether they learn the lesson.
Alicante's hospitality sector has just posted its worst July in years, and August is heading in the same direction. The claim sounds like a lament, but the causes lie not only in the weather or a supposed drop in tourism: prices themselves have turned the restaurant into something to be haggled over face to face.
Going out every day is over. Customers have learned to dodge expensive dining: they spend fewer days away, go to the supermarket, cook in the apartment or make a sandwich on the beach. They still go out, but with tactics to cut spending in restaurants and hotels. And when they do sit down at the table, they scrutinize whether the dish justifies the price.
Demand takes its revenge through prices
Textbook microeconomics says that once the break-even point is reached, supply must adjust its prices. Alicante's restaurateurs have done the opposite: raising rates further to make up for the loss of customers. The result is a vicious circle that some try to hide by blaming others' abusive prices, such as those who travel from Madrid or those doing low-cost tourism.
Not everyone is moving at the same pace. The experience of someone calling a mid-to-high-priced restaurant and being told "we're not taking any more bookings" at nine in the evening shows that demand still responds when the product convinces. Against that, places serving food even cats wouldn't touch complain that Mercadona won't let them sell low-quality set menus at 18 euros.
A warning for Spain's tourism model
Spain has clung to tourism as its only industry, and this summer has sent a signal of exhaustion. If travelling and eating out become luxury goods, as they were in the sixties and seventies, the country will be doomed to misery: no industry, no R&D, and a state devouring what little is left. The outlook for August is for even more restrained spending, and the only way out for local hospitality is to lower prices, improve the offering, or both. And judging by what the sector is lamenting, it remains to be seen whether they learn the lesson.
Also available in: Deutsch
Summary of a discussion on Burbuja.info - Foro de economía, actualidad y política., translated from Spanish and reviewed before publication. Read the full discussion (24 replies).
More summaries
-
Alicante hospitality sector faces worst July in years
Alicante restaurateurs report a 7-8% sales drop and soaring prices. The middle class can no longer afford €40 paella.
-
Spain's hospitality sector faces steep price hikes
A €17 plate of huevos rotos highlights soaring costs in Spanish bars and restaurants, driven by taxes and margins.
-
Valencia's hospitality sector fills its beds, but with foreign tourists
Occupancy on Spain's Valencia coast is nearing 90%, but Spanish tourists are staying away over prices and heat. An analysis of the new tourism model.
-
Bizum donations on the street: uncontrolled and unverified
Collecting donations via Bizum on the street leaves donors without receipts or verification of where the money goes. Unproven accusations tarnish the case.
-
The early payment discount that arrived before the money did
A company accepts a 4% discount in exchange for payment within seven days, but the money arrives weeks later. Separating price and timing avoids giving away margin.
-
Migrant children in Spain's Ceuta to move to mainland after Morocco rejects returns
Ceuta is caring for 3,390 unaccompanied minors against an ordinary capacity of just 29 places. Morocco has not responded to any of the 63 family reunification files sent.