HomeHotelSpanish hotels have increased their profitability by 16.5% in 2023

Spanish hotels have increased their profitability by 16.5% in 2023

Spanish hotel indicators stand at 2023 all-time highs (ADR and RevPAR) or very close to them, in the case of occupancy, which still remains almost 3% below 2019 levels. The data from the Hotel Sector Barometerprepared jointly by STR and Cushman & Wakefield with results from 1,310 hotels and around 160,000 rooms, confirm the good progress of hotel and tourism activity in all destinationsalthough with greater growth in big cities than in sun and beach destinations, partly because 2022 was already an excellent year for the vacation segment.

The end of the year once again places Malaga like the Spanish city with higher level of occupancy with 82.9%. They follow him at the top of the ranking Valenciawith 80.2%, and Barcelona, with 78.3%. During the year, the greatest growth compared to 2022 has been reported in Bilbao (+11%), Cordova (+10.7%) and Barcelona (+10%). On the contrary, the lowest occupation is recorded in Marbellawith 63.8% and a growth of 1.9% compared to last year.

Barcelona, ​​with a 10% increase in occupancy and the third highest ADR in the country (€172.7), has closed 2023 with the highest increase in RevPAR, 24.7% to reach 135 euros. Source: Adobe Stock.

For Elvira ArjonaSTR Account Director for Spain, “the evolution of employment leads us to think that There is still some room to continue growing in 2024as demonstrated by the activity in reserve books, awaiting the total recovery of issuing markets both in Asia like in Latin America”.

For his part, Bruno Hallé, partner and co-director of Cushman & Wakefield Hospitality in Spain, considers that “the occupancy in vacation destinations seems to be reaching maximums, as we see from the data from destinations such as Canary or Balearic IslandsMeanwhile he urban tourism “It seems that there is still room to continue increasing demand with the total recovery of corporate tourism and markets such as North America and Asia.”

Granada and Valencia are the destinations that register the greatest increase in the average daily price per room with 17.4% and 14% more, respectively

Marbella It continues to be the city with the highest ADR, with an average of 278 euros, despite being the only destination in which the price decreases compared to 2022, specifically by 2.3%. The highest average daily prices are found below in Balearics (€176.6) and Barcelona (€172.7). Also very notable is the growth in prices in Madrid12.8% compared to 2022, placing the average annual ADR at 150 euros.

The largest price increases have been recorded in Grenade (+17.4%) reaching 103 euros on average and in Valencia (+14%), reached 122.2. Malaga, with an increase of 13.6%, closes the podium of cities with the highest increase in ADR, standing at 141.1 euros. The cheapest prices are found in Saragossa (€69.8) and Cordova (€96.67), the only cities below 100 euros on average.

Historical highs for Spanish hotels in ADR and RevPAR

Table that reflects the evolution of RevPAR in the main Spanish destinations in recent years. Source: Cushman & Wakefield.

Albert Grau, partner and co-director of Cushman & Wakefield Hospitality in Spain, has highlighted in this sense that “the demand continues to strengthen throughout Spain, with a greater arrival of international travelers, which has allowed update prices during 2023. This increase must be framed in a context of high inflation and high interest rates, which pressures the margin of business operations. The forecast is that the prices continue their upward trend in 2024 although in a more moderate way.”

Spanish hotels exceed €105 in RevPAR for the first time

Revenue per available room is the indicator that has recorded a more positive evolution in 2023, with an average growth during the year of 16.3% compared to 90.4 euros in 2022 and exceeding by 18.7% the average 88.5 euros in 2019. The increase in income responds both to the higher occupancy with a great pull in demand as at price increase.

The destination with the highest RevPAR, as usual, is Marbella with 177.6 euros, due to the type of hotel offer on the Costa del Sol. Despite leading the ranking, it is the only one in all of Spain that drops, a slight 0, 4%

Next, we find ourselves at the top Barcelona with 135.1 euros and an increase of 24.7% compared to last year; and Balearics, with 117.8, 7.3% more than last year. Increases above 20% in RevPAR are also found in Bilbao, Granada, Madrid, Malaga, Seville and Valencia. The lowest are in Saragossa (€51.1), Cordova (€69.3) and Grenade (€71.5).

Hotel investment above €4,000 M for three operations

Hotel investment in Spain stood at over 4,000 million euros at the end of the year, a transactional record driven mainly by three major operations:

– HIP adds the institutional fund GIC to its shareholding

– Asset manager Petra will supervise ADIA’s 24 hotels in Spain, coming from two asset portfolios managed by Meliá

Beyond these operations, the investment market has suffered from a lack of supply, largely due to the good operational progress in the hotel industry as a whole, confirmed by the results of the Barometer. Currently, the sector has a low level of debt and at Cushman & Wakefield “we do not find NPL (Non Performing Loans), so lopportunistic operations have been very few. Yes, it has been, on the other hand, a good year for investors with equity who have been able to opt for the purchase of “trophy” hotels and other assets with good locations thanks to needing a lower level of financing.”

Latest news from Cushman & Wakefield:

– Vacation rentals are gaining ground in Europe but there is no loss of hotel business

– Risks and opportunities of the hotel investment market for 2024

– Spain leads the hotel transaction market in Europe in 2023

– Cushman & Wakefield: “It is a good time to maximize value”

Source: Hosteltur

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