Spain consolidated itself as the second most visited country in the world in 2023, with 85.3 million travelers, leaving behind the devastating effect that the pandemic had on tourist arrivals, when the numbers sank to just 19 million in 2020. The perspectives For this year they are more than optimistic and the objective of reaching 100 million tourists in 2024 has gone from being a utopia to a more than real possibility based on the pulse of demand registered during the first quarter of the year.
This explosive recovery in tourism since the pandemic has triggered the appetite of investors to make hotels in a destination where the average price of a room exceeded 100 euros for the first time in history at the end of 2023 (it was close to 107 euros in the first quarter of 2024). In the 1,000 days or seven quarters that will pass between April 1, 2024 and December 31, 2025, 260 new openings are planned, according to data from the real estate consultancy CBRE.
This figure represents a frenetic and unprecedented pace of openings in the recent history of the Spanish hotel industry, with a new opening every four days. And these new assets have two differentiating aspects compared to the period before the pandemic: a greater weight of luxury hotels and a strong concentration in three urban destinations such as Madrid, Valencia or Malaga compared to the role that properties located in destinations traditionally had. Sun and beach.
Of the 260 hotels planned, 57 (22% of the total) are in the five-star or five-star luxury segment, which shows that the arrival of large international brands such as Four Seasons, Thompson or Nobu was not a mirage. , but the beginning of an avalanche of international projects for the next 1,000 days. If in the two years after the pandemic the focus of investors was focused on the vacation segment, the urban segment seems to have gained positions among national and foreign capital, since Madrid, Valencia, Malaga and the Canary Islands account for half of the openings.
These two trends (luxury and concentration in urban areas) have already been confirmed in the data for the first quarter of this year. Between January and March, 28 assets have been negotiated, compared to 17 in the same period in 2023. “Investors continue to bet on high-end hotels thanks to their more resilient and inelastic nature, representing 82% of the total traded: 55 % of four-star assets and 27% of five-star and five-star luxury assets,” the report emphasizes. In the case of locations, 62% of the projects reside in urban locations, with two cities leading the way: Barcelona, with 33% of the assets and Malaga, with 7%.
“The positive figures shown in the first quarter of the year, both in terms of demand, profitability and investment, indicate that the hotel sector will continue to grow throughout 2024,” emphasizes Jorge Ruiz, director of CBRE Hotels in Iberia. In his opinion, Spain will continue to be the focus of hotel investors who will carefully look for opportunities in the luxury segment and in the purchase of portfolios. “We also foresee a greater appetite for purchasing hotel managers as a result of greater specialization of investors and their greater willingness to assume operational risk to obtain greater profitability.”
National investors gain positions compared to international investors
In 2023, hotel investment in Spain reached the second best record in history, with 4,248 million eurosonly behind the 4,800 million recorded in 2018. Foreign investors were responsible for 75% of that volume (3,188 million) while national investors accounted for the vast majority of operations, with 81 of the 107 transactions recorded.
This apparent contradiction is based on the significant weight that two operations carried out by foreign investors had in the statistics as a whole. GIC, Singapore’s sovereign wealth fund, paid 1.4 billion euros for 35% of the portfolio of Hotel Investment Partners, the hotel arm of Blackstone, which included up to 60 hotels in Spain. In parallel, Adia, integrated within the industrial network of the Abu Dhabi sovereign fund, paid 600 million for the purchase of the Equity Real Estate portfolio, made up of 17 assets managed by Meliá.
In the first quarter, the prominence of national investors has continued to rise, absorbing 74% of the total traded. The asset rotations continued, with four transactions that concentrated 47% of the total volume (more than 270 million euros), among which the agreement signed between Santander and Meliá stands out, by which the financial entity has acquired 38% of three hotels (Me London in London, Gran Meliá Palacio de Isora in Tenerife and Meliá Cala Galda in Menorca) for an amount of 300 million euros.
As of March 31, 2024, the Spanish hotel plant was made up of 12,494 properties and 1.23 million rooms, with an average occupancy of 61% according to CBRE report. It has not only grown in quantity, but also in quality, as can be seen in the evolution of average prices and revenue per available room (Revpar), the main profitability indicator used by the industry. hotel. Thus, the average price reached 107 euros in the first quarter of this year, while the Revpar rose 12% to 65.7 euros, as a result of a greater presence of five- and four-star assets. Returns on hotel contracts remained stable, at 6.25% annually in the case of the Canary Islands and the Balearic Islands, and 5.25% in Madrid and Barcelona.
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