Ahead of the Mediterranean Resort & Hotel Real Estate Forum (running from November 9-11 in Madrid), a new report from hotel consultancy HVS is indicating that improved occupancy and rate performance across Spain have helped boost hotel values and drive recovery in the country's hotel sector. The report credits “sound infrastructure and good accessibility” for the boost in visitor numbers.
As noted last week, Spain has seen record-breaking levels of inbound tourism in 2015 (so far), following four years of consistent growth. More than 38 million foreign tourists visited the country in the first seven months of the year, 4.7 percent more than during the same period in 2014. This, in turn, has driven "extensive investments" in existing hotels and new-builds planned for both top-tier cities and secondary markets.
In Madrid, occupancy is currently at its highest point since 2008, while rates have increased 5 percent over the first eight months of the year to August 2015. The city’s hotel sector is also set to get a boost with the opening of the 215-room Four Seasons Hotel in 2017 and the purchase of The Ritz Madrid by Mandarin Oriental and Olayan, both of which are expected to boost average rates in hotels.
Hotels in Barcelona weathered the storm better, showing 7 percent growth during the first eight months of 2015. Tourism continues to grow in the city, particularly the MICE sector, while the construction of a large cruise terminal in the port will further help to grow its cruise business, which is likely to affect the city's hotels. However, hotel supply in Barcelona is now expected to slow due to a moratorium on development and short-term rentals. Still, some developments are in the works: Travel company Cox & Kings-owned Meininger Hotels has announced plans to open a hotel in Barcelona by the end of 2018.
Beyond those hubs, the beach resort of Ibiza is also seeing development (including Europe's first Hard Rock resort), as has Marbella, where an influx of international hotel operators has boosted demand. Tenerife has also benefited from international players, including the Hard Rock Hotel, while demand for high-end hotels is also boosting rates. In Mallorca, Spanish-brand Melia announced the sale of its 875-room resort in Calas de Mallorca last month for 23 million euros.
"Hotel transactions in Spain have increased substantially in the past two years, with Madrid and Barcelona being the key focus for urban activity, and Mallorca proving the hotspot for resort transactions," report co-author Nicole Perreten said in a statement, noting portfolio transactions, including the joint venture between Barceló and Hispania-Azora, and Meliá and Starwood Capital and Bank of America, as proof of international interest. "As the recovery in Spain continues we would expect transaction activity to improve year-on-year."