Hotel companies had a 2021 with higher occupations than in the first year of the pandemic, but these were not enough to lead to a recovery in the sector. Companies such as Grupo Posadas and Hoteles City Express, among others, registered a higher influx than in 2020 and even had higher rates than before the pandemic, but the market still remains challenging, and with recent cost pressure pointing to another year of challenges
In the country, the hotel sector recovered part of the occupation depressed by the pandemic. While in 2019 an occupancy rate of 60.3% was recorded in the country’s main tourist destinations, for 2020 the rate was just 26.3%. For 2021, this indicator advanced to 41.4%, an improvement of 15.3 percentage points, with which practically half of the lost employment was recovered.
This recovery had a very marked segmentation; While vacation destination hotels had high occupancies –74% in the fourth quarter in the case of Posadas resorts , for example–, urban markets remained at moderate margins, as was the case of City Express Hotels, which in its complexes showed rates of 49% on average.
However, the financial statements of the companies do not seem to fully reflect this trend. While Grupo Posadas had revenues 18% lower than in 2019, Hoteles City Express registered 28% less sales, and Grupo Hotelero Santa Fe –with a hotel portfolio that includes complexes from both segments– fell 21% in revenues in the same period. Although Posadas and Grupo Hotelero Santa Fe generated operating profits, they were lower than before the pandemic, while City Express Hotels still recorded losses.
For Roberto Montalvo, an academic at the Universidad Iberoamericana, the pressure on profit margins has to do with higher costs, which have increased since the pandemic without practically giving companies a break.
“There are two external factors that are impacting profitability. One is inflation; Since I can’t charge the full force of inflation and [the rise in] energy costs to the customer, that causes them to make a bet and raise costs, which has raised rates,” he explains. “It is also impacted by these new procedures and things that hotels have to comply with in terms of health security, both in terms of infrastructure adaptations and day-to-day activities, to give that certainty to the client.”
Although the average rates have grown in several cases compared to 2019, the increases have been marginal –of 0.2% and 0.9%, in the case of City Express and Grupo Hotelero Santa Fe, respectively–, this has not necessarily translated into an increase of revenue per available room (or RevPAR, for its acronym in English), which is still maintained with falls of more than 20% in several cases.
According to Julián Fernández, an analyst at Bursamérica, this also has to do with the effect of inflation on guest spending, with the aim of limiting their spending on lodging when vacationing.
“Despite the fact that the income levels of some airlines have recovered, for example, in hotels this has not been the case. It is mainly due to the fact that families spend to cover the cost to reach their destination, and they prefer to look for slightly cheaper hotels that fit the families’ new portfolio”, he refers.
However, this has not been the story of tourists with higher purchasing power, which has been reflected in the results of companies such as RLH Properties, focused on the ultra-luxury segment. The firm increased its revenues by 16%, and even showed an average rate 42% higher than in 2019, with a RevPAR that, despite market conditions, grew by 4.3%.
To improve profit margins, specialists agree that continuous improvement in hotel occupancy will be necessary to generate volume.
“If this recovers well, in terms of the mood of the traveler, hotels can take more depending on raising the rate. It will depend on whether they manage to have a little stability in terms of the guests not feeling insecure”, concludes Montalvo.
