In 2023, the Spanish hotel market was at the top of the European ranking for hotel investment, according to the annual report prepared by the consultancy firm Colliers. It thus overtook Germany, the United Kingdom and France, which usually occupy the top positions. Globally, it also overtook the usual leaders, such as Japan, Australia and Canada, and came second only to the United States.

In total, hotel investment reached 4.248 billion euros in Spain in 2023. Hotels were, in fact, the most sought-after assets in the national real estate market, accounting for 38% of investments. 171 transactions were carried out in total, which amounted to 21,748 rooms. There were also 34 transactions relating to land for hotel development and real estate to be converted into hotels.

The role of foreign capital
Foreign capital accounted for 75% of the investments and was the main player in the industry's most important sales and purchases. As Colliers' study notes, the strategic transaction by GIC (Singapore) for HI Partners and the 17-hotel portfolio acquired by Adia from the United Arab Emirates are particularly noteworthy. Both are included in portfolio transactions which accounted for 62% of investments and amounted to 2.615 billion euros.

Laura Hernando, Managing Director of Colliers' Hotel Division, said, “Spain has entered a virtuous circle for hotel investment, backed by distinctive factors and strong tourism fundamentals. It is clear that Spain remains attractive for institutional and international investment in the hotel industry.”

Islands corner the market
The Canary Islands and the Balearic Islands shared 65% of the hotel investment volume in 2023, putting the holiday industry in the lead. The two major transactions by GIC and Adia played a major role in this milestone. Of the 39 transactions in each archipelago, almost half are linked to the Singapore investor.

Hotel investment in the Canary Islands reached 1.175 billion euros, 28% of the total. 75% of this went to four-star hotels, and a further 15% to five-star hotels. In the Balearic Islands, investment stood at 796 million euros, 19% of the Spanish total. In this case, 61% went to four-star hotels and 32% to five-star hotels.

Attractive to investors
Laura Hernando stressed that “the investment attractiveness of our archipelagos is undeniable,” and further explained, “Since 2016, the Spanish islands have cornered 10.28 billion euros through purchases of over 50 hotels – nearly 86,700 rooms – to which we must add billions more deployed to refurbish and reposition these assets.”

International investors accounted for 82% of investments in the Canary Islands and 78% in the Balearic Islands. Nationally, average purchase prices reached a new record high of 182,900 euros per room, despite the macroeconomic situation and the increase in interest rates to the highest level in 20 years.

^{Photo: Colliers}