Ecuador: Drastic Dive in Sales Revenues for Hotels, Restaurants in 2016

Posted on July 22, 2016 • Filed under: Economy, Ecuador, Ecuador Travel reported by
Sebastián Angulo Stives Reyes 22 July 2016 00:00 More Rooms and less diners: so was the beginning of the year for the sector of accommodation and food services. The activity decreased by 13.2% in the first quarter of this year compared to the same period last year. This is the worst first quarter since 2001 versus the same periods last year, according to the report of the National Accounts of the Central Bank. This was the sector that felt the contraction of 3% of the national economy between January and March this year, in annual terms, due to the fall in oil prices and the appreciation of the dollar. In fact, the latter factor, according to union leaders in this segment, made ​​the country less competitive as a tourist destination, because the costs of goods and services are more expensive compared to those of neighboring countries. According to the Ministry of Tourism, hotel occupancy in luxury properties in Guayaquil fell from 62% to 55% between March last year and the same month this year. In Quito, this figure was reduced by 13 points and in Cuenca, 10. Maite Ulloa, director of Sales and Marketing JW Marriott Hotel Quito, said that although the first quarter was difficult, the second was more complicated by the earthquake and aftershocks that led to a decline in visits. But the factor that most influenced was a more expensive dollar. The same situation happened hotels of category one country or four stars, where employment fell 9, 8 and 15 percentage points in Quito, Guayaquil and Cuenca, respectively. Gino Luzi, president of the Hotel Association of Guayas (Ahotegu) said that sales of 15 luxury hotels and first – class Main Port, which represents, fell 13.5% between January and June. The hotel occupancy considered four and five star city like Hiton Columbus, Sheraton, Oro Verde, Guayaquil, Continental, down 61.5% from January to June 2015, to 57% this year, during the same period. The capacity is about 2 200 rooms. According Luzi, the main reason for this reduction is the economic downturn. “There is no tourism and no money,” said the leader. Roberto Quintero, head of Marketing at Hotel Continetal, explained that had a low of 12.69% in sales in the first half of the year. Diego Utreras, executive director of the Hotel Association of Ecuador (AHOTEC), agrees with this and adds another cause: the growing “informal offer of accommodation”. Airbnb and HomeAway, platforms offering the possibility to rent and finding accommodation in apartments or through web sites or mobile applications, says Utreras, they have also complicated the picture further. The union submitted a proposal to the Ministry of Tourism to be regulating this offer and thus reduce the “unfair competition” that affects the environment and economic segment. Muñetón Holbach, who chairs the guild of cheap hotels in Guayaquil, argues that the reduction of sales in this category is 50% in the first half. In Guayaquil operate about 300 hotels in this niche, which have seen their income reduced by the lack of local tourism and so-called backpackers, its main customers. The restaurants had to bet on strategies to cope with the economic downturn. Gustavo Teran, representative of the Mariscaleña Community, which groups establishments, including hotels, restaurants and bars located in Marshal Foch Quito, said that this year closed 15% of premises in this area due to the economic situation. Terán estimates that the average spending per person fell 30% and visits to local, 20%. Carla Viteri, National Coordinator of Marketing DK Management Services, a firm that manages shopping centers Quicentro North and South (Quito) and San Marino (Guayaquil), states that do not have statistics of their food courts, but “it is a fact” sales have fallen, so have had to implement local promotions to attract customers. With lower prices and deals, hotels and restaurants try to increase their sales. La Canoa, Guayaquil, restaurant took 2% of VAT applied and promotions, which allowed to keep their sales volumes. The unions expect the second half will be better, thanks to events like the World Habitat Forum III, to be held in Quito in October. Read Article


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