The Spanish hotel market has increasingly become a key focus for global hotel brands since 2019, a report from Christie & Co has revealed.
According to the International Brands Development in Spain report, since 2019, 28 international groups have opened 122 new hotels in the country - adding 22,640 rooms – a 16 per cent growth, compared to 4.5 per cent growth by domestic groups. The report found that the growth of international groups has been achieved through the incorporation of large hotels, while domestic groups grew through smaller hotels.
Madrid, Barcelona and resort destinations led the market, with 66 per cent of rooms – 14,904 rooms - sitting within the resort segment and 34 per cent of the remaining rooms – 7,736 - belonging to the urban segment.
Major international luxury groups continue to focus on large cities, such as Four Seasons and Rosewood in Madrid and Radisson in Seville, Barcelona and Bilbao. However, secondary destinations have also caught the eyes of the groups' budget brands such as Ibis (Accor) in Lugo and Girona, HIEX (IHG) in Logroño, and B&B in Mataró and Sant Cugat.
Five-star hotels made up 12 per cent of rooms added, 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.
The report also noted a shift in the most common type of management model; with owner-operated hotels accounting for 53 per cent of the total volume of rooms, management contracts accounting for +31 per cent and franchise accounting for +10 per cent.
Over the next three years, 68 hotels – 10,667 rooms – of the main international groups plan to open in Spain, with nearly half of the rooms in the pipeline expected to be 5-star hotels. The entry of international luxury groups presents the possibility of an increase in the quality of tourism and the ADR of the locations that will host these hotels. Madrid, Barcelona, Mallorca, Ibiza, Sevilla, the Costa del Sol and the Basque Country have been singled out to be the prime entry points for international groups.
What it means
The Spanish hotel market is an increasingly attractive investment destination, with a range of opportunities across market segments and locations. Discerning investors, operators and owners can take advantage of this increased interest, and with over half of the hotel room supply in Spain coming from owner-operated hotels, there is the added opportunity to convert this supply to branded hotels. Furthermore, the planned openings in the country over the next three years means there’s a strong pipeline for future growth in the Spanish hotel market, offering continued investment potential.
Speaking at the Resort and Residential Hospitality Forum last year Sergio Carrascosa co-founder and managing director asset management at Hotel Investment Partners (HIP), which has 73 hotels, spoke about the importance of branding when it came to hotels. This approach helped underpin their strategy, which has involved moving up the quality chain from three and four-stars as well as improving distribution.
"Our focus is on brands. Obviously selecting the brand is very very important," he said.
What they said
Nicolas Cousin, managing director of Christie & Co in Spain and Portugal said: “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.”