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Coronavirus reduce the number of rentals on Costa del Sol

Coronavirus reduce the number of rentals on Costa del Sol

The COVID-19 pandemic is still ravaging Spain, which recently led the southern region of Andalusia to impose a perimetral shut down. In the last 24 hours, some 11,000 new coronavirus cases were registered in the country, of which just over 2,000 cases in Andalucia. This also affects the holiday rental industry and Coronavirus reduce the number of rentals on Costa del Sol.

The health crisis has hit Andalusia very hard given that tourism is the main source of employment in the region. 80% of hotels on the Costa del Sol have remained closed since the crisis started in mid-March; these establishments are not expected to reopen until the situation is under control. The so-called second wave is hitting the country even harder than many had expected; between 200,000 and 300,000 people are foreseen to lose their jobs by year end.

Huge financial loss
The lack of tourists constitutes an enormous loss for southern Spain. According to statistics from the INE, the Costa del Sol lost some 16.8 million euros YTD, which translates to a decrease of more than 70% compared to the previous year. Under normal circumstances, a hotel, or holiday home, in Malaga averages occupancy rates of 72%, a figure now close to 5%. The hotel industry alone has lost 12.1 million euros, as many establishments have been closed since the crisis began. Hotels in particular have been particularly affected during this crisis as many travelers prefer to stay in a holiday home to reduce human interaction with other visitors, and in turn lower the risk of infection.

Locals retire from vacation rental
The pandemic has now been going on for almost eight months. Since the Costa del Sol has not been receiving tourists during that period, many Spanish homeowners have opted for renting out their accommodation on a long-term. That means that Coronavirus reduce the number of rentals on Costa del Sol. According to the holiday let industry portal AirDna, Malaga had a portfolio of 7560 holiday apartments in the first quarter of 2020; today, the number has dropped to 5878, a decrease of 23%. In the same period, Marbella has fallen from 6,161 to 4,968 holiday homes representing a decrease of 20%. If you look at the rest of the Costa del Sol, numbers seem to follow suit; it is safe to assume that the number of holiday apartments on the Costa del Sol will continue to drop over the course of the next 6 months.

The second wave washed away optimism
Shortly after the first wave of coronavirus ended in June, there was a glimpse of hope as one could witness reservations slowly starting to come back followed by a month of July full of optimism. However, when British Prime Minister Boris Johnson announced in late July a mandatory 14-day quarantine for anyone returning from a trip to Spain, the optimism was short-lived and quickly faded away. From that point on, the situation deteriorated leading many reservations to turn into cancellations.

Many businesses expected to close
Over the next few months we will unfortunately witness the closure of many businesses that simply have not been able to cope with the crisis. To date, the Spanish government has not managed to provide sufficient help to businesses, many of whom are now forced to shut down as they simply cannot face their expenses.

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