Spain’s hotel industry is thriving and is attracting significant real estate investment in the hospitality sector. According to property consultancy Cushman & Wakefield, over €1.7 billion in transactions took place in the first half of 2024, particularly within the luxury and ultra-luxury segments. This positive trend is largely driven by the resurgence of tourism, with Spain welcoming 85.1 million visitors in 2023, surpassing France, which saw between 78 and 81 million visitors.
Albert Grau, partner and co-director of Cushman & Wakefield Hospitality in Spain, explains: “The country is an incredibly attractive destination, as demonstrated by operational data, and is establishing itself as one of the leading investment markets in Europe. The strength of the hotel industry is drawing increasing interest from investors, particularly in urban destinations that blend leisure and business. Key cities such as Málaga, Valencia, Madrid, and Barcelona are at the forefront of this trend.”
Data from Colliers’ Hotel Investment Report indicates that “hotel investment in Spain reached €4.248 billion in 2023, involving the sale of 171 hotels and 21,748 rooms, along with 34 land transactions.” The luxury market is anticipated to become a major focus in the coming years.
Luxury Hotel Portfolio Growth
Savills consultancy projects that between 2023 and 2028, the number of luxury hotel rooms in the European Union will increase by 49%, with an average annual growth rate of 6.7%. With these forecasts in mind, and given recent transactions, Spain is emerging as Europe’s top destination for hotel investment in 2024, ahead of established markets such as the UK, Italy, France, and Greece.
In this context, current trends indicate that the most attractive properties are those offering exclusivity and sophistication in various formats, including Branded Residences, holiday apartments in resorts, and new developments with access to premium services.
Branded Residences
Leading hotel brands like Four Seasons, Hilton, Hyatt, and The Ritz-Carlton are continuing to invest in new developments, with Branded Residences leading the way. Notable ongoing projects include the 22 private residences by Four Seasons in Madrid, the 33 exclusive homes under the SLS brand at Madrid Infantas Residences, and the five Karl Lagerfeld villas being developed in Marbella.
Despite challenges such as inflation and socio-economic instability that have affected the real estate sector recently, the luxury hotel sector remains stable and continues to drive investment. With new hotel development concepts and a focus on high-net-worth travellers, these assets are set to further energise the tourism market by promoting new experiences and exclusive services.
