MADRID—Spanish hoteliers predict profitability will drop over the key summer season by 15 percent compared with the same period during 2008 as the economic downturn continues to take its toll on a sector that saw dramatic rate cuts during the first six months of this year, according to the Spanish Confederation of Hotels and Tourist Accommodations.

Joan Molas

According to the poll, 84 percent of those questioned said they expected profits would be 15 percent lower than last summer because of rate reductions the hoteliers are forced to adopt as foreigners and Spaniards alike curtail their holiday budgets.

Occupancy rates are expected to slip between 4 percent and 5 percent.

Spanish hotels slashed room rates up to 15 percent during the first half of 2009, according to the president of the confederation. CEHAT is comprised of 64 hotel associations around the country.

Eighty-two percent of those polled predicted the number of overnight stays by foreign guests over the summer would fall, and 70 percent said overnight stays by Spaniards would be down compared with 2008. Sixty percent predicted long-term bookings and stays of between one and two weeks would drop.

“We’re going to see a very short high season and a much longer low season, and Spain is also facing stiff competition from such alternative Mediterranean regional destinations as Turkey, Egypt, Tunisia and Croatia,” Molas said.

“As far as Spanish cities and regions are concerned, we’re worried about the rhythm of summer reservations for the cities of Zaragoza and Valencia and for the Balearic island of Menorca and Fuerteventura in the Canary Islands,” he said.

Molas also said the sector would employ 50,000 fewer people this summer. Last year 1.5 million people worked in Spanish hotels during the high season.

However, there were several bright spots in the picture, he said.

“Even though we are seeing falls in European visitor numbers, especially from our most important markets in Britain, France and Germany, a recent survey by a French research company that polled 300,000 people in those countries showed that Spain was still the preferred holiday destination in the Mediterranean,” Molas said.

Thirty percent of Britons responding to the survey said they would choose Spain despite the fall of the pound against the euro. Spain was the preferred choice for a quarter of those surveyed in France and Germany.

In addition, the CEHAT president termed as a success a recent meeting between tourism sector representatives and Prime Minister José Luis Rodríguez Zapatero who promised to devote an entire cabinet session to the concerns of the industry.

Molas said the sector representatives urged the prime minister to reduce social security payments by tourism industry employers and to cut Spanish airport taxes for airlines as Greece, Turkey and other rival destinations have recently done.