Luxury segment dominates hotel investment in Spain

The luxury segment in Spain has secured more investment than any other in the country in the first half of 2023, according to a report by Colliers.

According to the Hotel Investment in Spain report, the luxury segment accounted for €717 million of investment volumes in Spain, amounting to 52 per cent of the total investment of €1.3 billion.

5-star GL hotels represented 21 per cent of the total investment and 5-star hotels represented 31%, driven by the positioning of the country as a global tourist destination, its rapid recovery post-Covid and the attractiveness of Spain to international hotel investors.

At the urban level, Barcelona secured €459 million of investment, beating Madrid which secured recorded 6 transactions worth €123 million. In the vacation space, the Balearic Islands, Canary Islands and Costa del Sol accounted for 49 per cent of the investment with a total volume of €684 million, with the Balearic Islands securing the top spot with €400 million of investment.

geographical distribution of hotel investment in spain

International investors accounted for 63 per cent of the total investment. However, Colliers noted that a significant portion of the investment was channeled through insurers and sovereign wealth funds, investors with a more asset-oriented approach, lower exposure to the debt market and more moderate return requirements.

Notable deals in the first six months of the year included the purchase of W Ibiza by the Italian group Statuto, the acquisition of Dolce Sitges for €63 million by Perial and the purchase of Autograph Collection Palacio del Retiro by the family office of Jon Riberas for around €60 million.

What they said

Laura Hernando, managing director of Hotels at Colliers said: “The dynamism in the luxury segment and the momentum of significant transactions maintain normalized volumes in a year that is proving particularly challenging for investors. Despite the economic uncertainty and its potential repercussions on the tourism sector, the excellent fundamentals of the industry, the demonstrated confidence of investors, and the existing market appetite make us positive about our hotel investment outlook for the entirety of 2023.”