The Canary Islands have emerged as Spain's most expensive destination to welcome the New Year, surpassing Madrid with the highest accommodation prices. According to a new report, The Hotel Pricing Outlook – Spain – Fin de Año 2024 by Simon-Kucher & Partners, hotel prices across Spain will see an average increase of over 5% compared to last year.
The national average tariff is expected to reach €257, continuing an upward trend in recent years.
A Price Surge in the Canaries
Hotel prices in the Canary Islands have gone up by 30% compared to last year, with the average price now at €343 per night, 20% higher than Madrid’s median rate of €287. This rise is largely driven by strong growth in the midscale segment, which has seen a 54% price hike, and in the luxury sector, where tariffs exceed €600 for New Years Eve.
In contrast, Madrid, Barcelona, and Andalusia have experienced relatively stable price changes, with fluctuations ranging from -1% to +3%. This stability is attributed to a deliberate strategy by hotel chains to stimulate demand amidst a slowdown in occupancy growth throughout 2024.
Regional Trends
Valencia stands out as the only region to report a significant drop in prices, which are down by 14% to an average of €200. This decrease is attributed to the region's ongoing recovery from the natural disaster caused by the DANA storm, which disrupted both supply and demand in the tourism sector.
Málaga and Alicante have also maintained relatively stable pricing, with minor variations of -1% and +1%, respectively.
Meanwhile, the Canary Islands' appeal remains strong, bolstered by good weather and a high concentration of premium offerings. The combination of robust demand for both midscale and luxury accommodations solidifies its position as a top-tier destination during the festive season.
A Changing Market Landscape
While demand for upscale hotels remains steady, the report highlights a notable trend: the growth of budget-conscious travel. A significant 42% of tourists are now opting for more affordable options, driving sustained growth in three-star hotel tariffs.
The economic and luxury categories have seen the highest price increases, with year-on-year growth of 12% and 8%, respectively, across Spain’s eight key tourism regions.
Miguel Afán, a partner at Simon-Kucher, commented: “Although occupancy growth has slowed compared to last year, prices during key periods continue to rise. This reflects the strength of the holiday season in capturing demand.”
As 2024 draws to a close, the Canary Islands’ rise to the top of Spain’s hospitality rankings underscores the evolving preferences of both domestic and international travellers. With steady price increases in the midscale and luxury segments, the archipelago sets the tone for a competitive year ahead in Spanish tourism.
