5 Charts to explain Spain: STR impact & recovery

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We’re all painfully aware of the short term rental reality of the COVID-19 crisis: reservations have taken a colossal hit and property managers have been left searching for ways to build on sparse demand. But what’s happening now? The 5 charts in this article illustrate how Spain has progressed; offering some visibility over where Spanish property managers in different parts of Spain are on this road to recovery and what we hope is the light at the end of their tunnel.

Chart number 1 comes as no surprise – it highlights the devastating impact of the moratorium on both international and domestic travel to vacation rentals. With a sustained reduction in reservations of over 75% compared with 2019, property managers have been left with little to no traffic on their trusty OTAs. With such little demand to capture, things have looked bleak, and whilst they are no means recovered, when we break the data up we start to understand the more subtle indications in the data.

In our second graph, we consider short term rental reservations and cancellations, rebased to their averages throughout the crisis period. This shows the progression of each, and highlights an inflection, towards mid April, where we started to see a more positive trajectory for reservations from cancellations. Following their initial spike, cancellations have largely decreased and remained below average for the period, while reservations continue to climb. Furthermore, taking a microscope to data since April tells a more positive story.

Looking purely at percentage change in reservations since the inflection in April allows us to understand the progress in Spain. Whilst these figures are relative, the improvement demonstrated in chart 3 across the Spanish Communities is plain to see. Having broken out Spanish data into the Autonomous Communities, we start to understand the stories of recovery in each region. Relative to the national low-point in week commencing April 6, Aragón and Asturias had experienced the most significant recoveries as of week of May 11. La Rioja is indicated to be the least significantly improved.

However, these stories are further demonstrated and perhaps better understood through our below penultimate schematic: a map showing the year on year percentage difference in reservations in that week of May 11. We can see that, as expected, Aragón and Asturias look most positive.
Yet, in considering not just the % improvement, but the volume of reservations compared with 2019, we see some differences. The Balearic Islands, whilst seeing a 177% improvement on the low-point, is still receiving 90% fewer bookings than last year. The communities of Valencia, Madrid and Catalonia are also suffering badly relative to 2019, and this will of course be presenting challenges to these vacation rental and property manager rich regions.

So why the discrepancies? Why are some regions suffering a bigger impact to their regular volume of bookings?
Some of the difference can of course be attributed to varying levels of restrictions or ‘lockdown phase’ in each region; Madrid for example has been behind in its relaxation of these measures. However, the explanation goes deeper than this, with regions of some less stringent phases, such as the Canary Islands and Balearics faring worse than some stricter areas.

Below we have our final chart – a ‘heat map’ of domestic short term rental stays across the Spanish Communities. The first thing to remark on is the similarity in shading to the above mapping of % reservations; those with a lower proportion of Spanish vacation rental guests, for example the Canaries and Balearics, have secured a comparably lower percentage of their expected bookings. This is to be expected, afterall, with an embargo on international travel, the vast majority of demand should be expected to come from those travelling domestically.

And so, those Communities with a stronger contingent of domestic visits are currently faring better, and the current priority for Spanish property managers has to be to shape their distribution around attracting those more abundant domestic guests.
Moveover, the overall picture is that of improvement, with Spanish communities experiencing, on average, a 290% increase in reservations from the low-point of April 6.

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