Balearic Islands: Hospitality Investment Overview
Balearic Islands led Spanish Hotel Investment in FY21 with €550 million (+69% vs. FY20) regaining its position as the natural outperformer of the country. Investment appetite was mainly focused on the island of Mallorca (accounting for c.70% of all transactions) as tourism there is far more stable throughout the year, in contrast to Ibiza or Menorca, where there is more season-driven demand.
Over 5 million tourists visited Mallorca in FY21, a respectable yet low figure if we compare it to the pre-Covid average where over 12 million tourists visited the island year after year. The promising start of 2022 calls for optimism as over 2 million tourists visited the island in Q1 2022, and sources point to a solid recovery with an expected figure surpassing the 12 million mark in FY22.
Most of hotels transacted during FY21 were 3/4-star holiday assets, while only 20% of the closed transactions corresponded to the highest category 5-star hotels. Average daily rates (ADR) averaged €114.9/day throughout FY21 and occupancy rates also climbed up to 70% in the summer months of 2021 and the beginning of Q2 2022.
Among the most significant transactions in FY21 was the sale of ‘H10 Punta Negra Boutique Hotel’, a 4-star hotel with 135 rooms located in the municipality of Calvià. Year 2022 also began with an important transaction; the sale of ‘7 Pines Resort Ibiza’, a 5-star hotel with 185 rooms located in Sant Josep de Sa Talaia (Ibiza), sold for €130 million, exceeding €700,000/room.