Hotel sector in Spain: which areas are the most popular?
After the successful 2018 Spanish real estate market last year showed a slowdown in growth rates. Especially the hotel sector, where investment fell by 47.6% to 2.5 billion euros. As expected by experts, the rise of 2018 did not last long and activity in the segment is gradually slowing down.
It should be taken into account that the hotel segment of Spain showed good results in the period before last, primarily due to two major deals. In 2018 the volume of investments amounted to 4.8 billion euros, which was a record amount for the country’s market. However, last year the figure fell by almost twice. And if in 2018 273 hotels were purchased, which are already ready for operation, in 2019 they were only 99.
At the same time, the last period showed a good growth in the direction of conversion of facilities into hotel complexes. The amount of deals in this segment was fixed at the level of 242 million Euro, which is 60% more than in 2018. The number of purchases of land plots for hotel construction increased by 141%, 164 million Euros were invested in this segment.
Despite the decline in the hotel sector, tourism in Spain is still developing well. Last year this segment saw a record number of foreign guests – 83 million people. Expenses in the tourism sector increased by 2.4%.
Canary and Balearic Islands were popular among investors. 769 million euros were invested here, which is 36% of the total segment financing.
According to last year’s statistics, Madrid is 2 times more interesting from the point of investment than Barcelona. If the Spanish capital received 337 million euros, then Barcelona only 187 million euros. Valencia, Malaga and Huelva are other interesting destinations – they have 150 million euros each.
Approximately 60% of investors are Spaniards, although the last 5 years in the country were financed mainly by foreigners. European citizens have also invested in the market – they account for about 25% and North America – 16%. Businessmen from Asia were not so active. About 1% of the total money came from them.
The Spanish real estate market was significantly affected by the conflict in Catalonia, which claims to be independent. Uncertainty forced many foreign investors to be cautious and not to rush into transactions. But there is also a positive side to this situation – some have paid attention to other, less popular regions of the country, and there is a growing segment volume.