The Spanish hotel industry is poised to continue its remarkable recovery, building on an already impressive performance in 2023 that has eclipsed its pre-pandemic highs of 2019.
As outlined in Global Asset Solution's Spanish Hotel Market Outlook 2024, the country's tourism sector saw substantial gains in 2023, significantly contributing to the national economy.
The resilience of the market, despite challenges such as high inflation and a shifting global landscape, underscores Spain as a robust destination for both leisure and investment.
A remarkable recovery
In 2023, Spain's tourism sector not only rebounded but flourished, exceeding expectations with a nominal expenditure that surpassed the 2019 season.
"The resilience of domestic tourism, coupled with the recovery of international visitors, particularly in the last quarter, offers a positive outlook for the future," highlights David Bóveda, a hotel asset manager and author of the report.
The resurgence is evidenced by a 1.9% increase in overnight stays compared to 2019, driven by a 5.5% increase in domestic tourism and the return of international tourists.
Sustained economic impact
Tourism’s substantial contribution to the country's GDP — a remarkable 12.8% — along with its significant share of the national workforce, underscores the sector’s vital role in Spain’s economic landscape.
The industry’s projected growth of 2.5% in 2024 is set to outpace the overall economy’s forecasted 1.8% increase, reinforcing its position as a key economic driver.
Albert Grau, partner at Cushman & Wakefield Hospitality, asserts: "Spain continues to attract investment thanks to the attractiveness and solidity of the destination. There is still potential for revaluation and profitability, particularly in vacation destinations and urban areas."
Investment insights
The hotel investment landscape in Spain also reflected vibrant activity in 2023, with an investment volume reaching €4.2 billion. The market saw a notable increase in high-end hotel transactions, with 85% of deals involving luxury establishments.
"International investors are drawn not only to the popularity of Spain but also to the increased adoption of management and franchise contracts," notes Bóveda.
Major transactions such as the acquisition of the Mandarin Oriental Barcelona by the Olayan Group signify the strong interest from international capital, particularly from regions such as Saudi Arabia, the United Arab Emirates and Singapore.
Expanding horizons
While major cities such as Madrid and Barcelona continue to attract premium investments, secondary Spanish destinations are also emerging as attractive markets for budget hotel brands.
Expansion into these areas reflects a diversification within Spain's hospitality sector. Bóveda elaborates: "Secondary destinations are catching the eye of budget hotel brands, which is indicative of the ever-expanding breadth of offerings in this inspiring country."
As Spain’s hotel market strides into 2024, the industry’s trajectory is marked by sustained growth, robust investment and an expanding array of opportunities across both luxury and budget sectors.
The ongoing recovery and resilience of Spain’s tourism and hospitality sectors bode well for another landmark year, continuing to draw both visitors and investors to its shores.
