Evolution of availability vs prices on the islands for June 2022

Revenue 21/07/2022

The pricing strategies of different types of tourist accommodations can be influenced by multiple factors: seasonality, availability, demand, significant events in the area, etc. At first glance, one might expect that, with higher availability and greater advance notice, prices would be lower, and vice versa. Similarly, it is logical that availability in sun and beach destinations is higher the further we are from the summer season. But, is this always the case? Do hotels, aparthotels, rural houses, and apartments follow the same trend? Do all islands behave the same way?

These are some of the questions we wanted to answer at Turobserver, comparing the evolution of these indicators for the month of June 2022, from January to June of the current year. And indeed, the data has proven to be very enlightening. For this study, we focused on some representative islands of the two main archipelagos in our country, the Balearic and the Canary Islands, such as Menorca, Tenerife, and Gran Canaria.

Evolution of Availability: January vs. June 2022

Evolution of Hotel and Aparthotel Availability

In the Canary Islands, despite being one of the less seasonal destinations, considering high season from October onwards, logic prevails, and the availability of hotels and aparthotels for June is lower during the month of June than in January, both in Tenerife (-13.77%) and in Gran Canaria (-8.72%). This data almost certainly responds to the increase in bookings as the summer season approaches.

In other words, in the Canary Islands, the difference lies not so much in the number of open establishments but in the number of fully booked hotels and aparthotels, without availability.

Menorca shows a different trend and registers an increase in availability in June (+2.42%) compared to January. In this case, everything seems to indicate that in January, many establishments still had not confirmed their opening for June, and despite bookings for the first month of summer recorded during the first half of the year, in June, availability was still higher than at the beginning of the year for the same month.

Menorca is a markedly seasonal destination, with the highest occupancy rates during the summer. Nevertheless, visitors seem to lean towards booking closer to the summer season, hence availability of hotels and aparthotels for this month was higher in June than in January.

Evolution of Availability of Houses and Apartments

In Menorca, there is a high demand for houses and apartments, and the graphs don't lie. Despite possible new units put up for sale between January and June, availability for the first month of summer was much lower in June than in January, especially evident in vacation homes (-38.14%) but also in apartments (-10.67%).

In Tenerife, there are hardly any differences when it comes to vacation homes (which means that bookings have been offset by new units for sale). However, in June, apartments showed +65.77% more availability than in January for the month of June, an aspect inevitably linked to a late increase in units for sale.

In Gran Canaria, a similar trend is observed, but with slightly higher figures. Thus, availability for stays during the month of June was higher in June than in January, both for vacation homes (+8.91%) and for apartments (+100.17%), where the difference is certainly striking.

We wonder, then, if inflation and reduced purchasing power have pushed many owners to decide to rent out their second home or summer apartment, avoiding spending money they don't have and ensuring an additional source of income.

Price Evolution: January vs. June 2022

Normally, the formula that hoteliers and owners tend to apply is simple: higher availability, lower price. Higher demand, higher price. And lower availability, higher price. Obviously, there are a thousand nuances and exceptions, but it makes sense to lower prices if you have a lot of competition or if you're having trouble selling accommodation units. But what do the graphs say?

In Tenerife, the numbers add up. With less availability of hotels and aparthotels, the average price in June (for stays in June) increased by +11.54% (reaching €135.35 per night). While the average price of vacation homes (€190.3 per night) and apartments (€78.23 per night) decreased, -10.45% and -8.50% respectively, apparently to offset availability indices that are the same or much higher.

In Gran Canaria, more of the same. With lower availability, there is an increase in the average price (+3.19% in hotels and aparthotels), and with higher availability, a decrease in the average price (-1.41% in vacation homes and -3.81% in apartments).

In any case, when prices have increased in the Canary Islands, we are talking about moderate increases, and it is not precisely in the summer that professionals in the sector focus their attention.

However, in Menorca, the story changes a lot, and this is where the seasonal nature of this destination is best appreciated, along with the importance of summer for a sector that penalizes last-minute tourists, with marked increases in the average price in all accommodation types, regardless of the current availability index. Thus, the average price per night in June (for June) increased by almost 40% in hotels and aparthotels, and more than 10% in vacation homes and apartments.