After three years with prices frozen and the lack of improvements in hotel room rates, many businesses are considering leaving the program or drastically reducing their quotas.
People everywhere are familiar with Imerso’s subsidised trips that help thousands of Spanish senior citizens to travel during the low season each year. It’s the prices that are the problem as hoteliers are complaining of their meagre profit margin. Over one million packages are sold all over Spain, but the extension the central government is contemplating doesn’t involve any kind of improvement in the prices the hotels receive. Hotels are now facing the fourth year of price freezes with costs rising and increased losses.
Operators ofthe program are currently paying €21 per person per day. This includes a double room, full board, with water and wine, and taxes. After VAT, the hotel gets €19 for each of the guests staying at the hotel and is expected to provide accommodation, breakfast, lunch, dinner, entertainment, Wi-Fi and all the amenities and services in a modern and comfortable hotel.
And naturally, the books no longer add up. The hoteliers are the principal supporters of this program but unfortunately they’ve been losing money with these prices for several years. With the prices the Imserso program is paying, it’s impossible to “show a profit or break even”, so this gap in losses is getting bigger and bigger each year and impossible for companies to maintain.
According to the hoteliers, Spanish state coffers are doing great business with the program: the Ministry of Social Affairs invests about €69m each year, but the Inland Revenue collects €103.50 for the direct income the program generates in taxes, contributions, and non-payment of unemployment benefits. And this is without counting the induced effect on all the auxiliary industry that revolve around the hotel industry or the reduction in the use of health services and medication from pharmacies that occurs during the holidays and can also be translated into a significant financial amount.
The hotel product is a kety part of the holiday package for senior citizens and also what determines the users’ high level of satisfaction. Without hotels, there’s no holidays and the program at the moment is unsustainable. “We’re convinced users can pay an extra 2-3 euros per day, this is an additional 14-21 euros for a quality service. For the hotel sector, it’s up to the public administration to search for and provide solutions to this problem that they have created due to irresponsible and inadequate conditions that don’t match with the sector or the users.”
