Spanish Hotel Market Overview in Q3 2022
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. Leading hotel groups have considered appropriate to increase their presence in Spain, with the opening of top-branded hotels as the Madrid Edition or the W.
As of Q3 2022, the main KPIs have reached (and even surpassed in key locations) pre-pandemic levels for both ADR and RevPAR, while, occupancy rate stills have been c.8% lower than the same period of 2019, reaching c.68.5%. Malaga has been the city with the highest occupancy rate in Spain during this period (July to September, summer period) closing at c.80%, followed by Valencia with c.75% and Alicante with c.74%. In the first 3 quarters of the year, average RevPAR reached c.€92, slightly higher than in 2019 and well above same period of 2021 (which suffered a severe decline due to the effects of the pandemic).
During the first 3 quarters of the year, c.90 hotels have been transacted, representing a total of c.12,000 rooms. The upper-scale and luxury hotels continue to be the preference for investors, with 4 stars hotels accounting for c.60% of all transactions and 5 stars hotels accounting for c.20%. In terms of hostel destination, vacation hotels account for half of the volume transacted and urban hotels for the other half.
A highlight during the quarter was the acquisition of a portfolio of six hotels in Ibiza and Mallorca by the Israeli chain Fattal Group from KKR. The total of these hotels, all of which are 4-star and located on the beachfront, reached a sales volume of €165 million. Another highlight of the quarter, is the conversion of the Mett Marbella Estepona to a 5-star hotel.
Finally, Q3’s total transacted volume was c.€320 million (with an average sale price per room of €150,000), with most of the investment concentrated in the Balearic Islands (accounting for more than 50% of the volume transacted), followed by Andalusia with c.25% of the total volume.