Spanish Hotel Market Overview in Q1 2023
As of Q1 2023, the main KPIs have reached (and even surpassed in key locations) pre-pandemic levels for both ADR and RevPAR. During this period, average RevPAR reached c.€78 (+c.43% YoY). On the other hand, this year’s first quarter ADR stood at c.€120 (+c.16% vs 2019). In this respect, the destinations that outperformed during this period were The Canary Islands, Barcelona and Madrid.
The robustness and resiliency of the Spanish hotel market in the post-pandemic period has demonstrated the country’s strength as an international major touristic destination with more than 18.7 million visitors during this first quarter of the year. In addition, the market experimented an increase in average daily expenditure of international tourists by 19.2% to c. €163 (Instituto Nacional de Estadística).
The hospitality sector has represented a 14% of total Spanish real estate investment. A total of 12 hotels (c.1,800 rooms) have been transacted, amounting to an investment volume of +€400 million.
The upper-scale and luxury hotels continue to be the preference for investors, with 5 stars hotels accounting for over 70% of all transactions and 4 stars hotels accounting for 14%. In terms of asset type, the first quarter has closed with a higher interest in urban assets (54%) in comparison to resort hotels (46%).
Prime yields remained constant during the first three months of the year standing at 4.75% in Madrid and Barcelona and 5.75% in the Islands.