A new report just published suggests the evolution of international hotel brands in Spain underlines growing interest in the Spanish hotel market that it says has been witnessed since 2019.
According to Christie & Co’s International Brands Development in Spain report, historically, independent 4-star hotels have dominated the Spanish hotel market, accounting for 59% of the total number of rooms in 2019.
However, this trend has shifted in recent years and Spain has increasingly moved into the spotlight for international hotel groups.
Since 2019, international groups have recorded the most growth and a total of 122 new hotels, with 22,640 rooms have opened under international brands, indicating the Spanish hotel market is a key focus for global hotel brands.
The reports comes as various international property investors become active in the Spanish hospitality sector, not least Stoneweg. The group struck a deal for two luxury beach hotels on the islands of Tenerife and Mallorca as tourism rebounds strongly, and is featured in the forthcoming issue of PropertyEU.
Redevco, Round Hill Capital, Invesco, Blasson Property Investments, and Union Investment are among others in the last 18 months. Union has brought the Radisson Blue hotel brand to Barcelona.
Also in 2022, KKR and Dunas sold a €165 mln portfolio to institutional investors led by The Fattal Group.
Earlier this month, The Blackstone Group was able to secure a €680 mln refinancing package for a 15-strong portfolio of Spanish hotels.
In March, it was reported that The Abu Dhabi Investment Authority (ADIA) was in talks to buy a 51% stake in an entity controlling seven hotels in Magaluf, Mallorca.
The greatest growth was recorded within the 5-star category (+12% of rooms), with 23 of the 29 new international brands that have entered Spain since 2019 belonging to the 'luxury & upscale' segment and six to the 'economy & midscale' segment.
Alongside this, there has been a shift in the most common type of management model; with owned hotels accounting for 53% of the total volume of rooms, management contracts +31% and franchise +10%.
Madrid, Barcelona, and resort destinations lead the market, with 66% of rooms sitting within the vacation segment (14,904 rooms). However, several major international luxury groups also continue to focus on large cities and 34% of the remaining rooms belong to the urban segment (7,736 rooms).
The report also presents a study of the new hotels under development and reveals that 68 hotels (10,667 rooms) from the main international groups are due to open offering a study of the new hotels under development which will be put into operation over the next few years, with 45.4% of these rooms corresponding to 5-star hotels. This is expected to increase the quality of visitors and ADR within the locations in which they open.
Nicolas Cousin, MD of Christie & Co in Spain and Portugal, stated: ‘Brand penetration in Spain is still below other neighbouring countries. However, our latest report reveals that international brands have been very active in Spain in recent years and will continue to grow, driven by the entry of new investors and by the development of private label operators, capable of operating international brand franchises.’
*See the next issue of PropertyEU featuring Stoneweg, one of the latest to strike a Spanish hotel deal. During Mipim week, the group agreed to buy two luxury beach hotels on the islands of Tenerife and Mallorca as tourism rebounds strongly.