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Bright Future of Luxury Hotels in Spain

The latest study by Jones Lang LaSalle forecasts success of luxury hotels in Spain, particularly in Madrid and Barcelona. Such a statement may look rather strange as the state of Spanish economy is far from prosperous, but here are the details.

The volume of investment into Spanish luxury market estimated €400 in 2012. That is just a half of the 2011 investment (€800). The majority of investors are from Spain (65%), while the share of European investors was only 35%. The most important deals registered are the sale of Rafael Barcelona Port, the sale of Holiday Inn Madrid, Barcelo Raval, and Holiday Inn hotel in Madrid.

Analyzing the revenues of hotels in Spain, experts of Jones Lang LaSalle mention positive changes that mostly concern the two biggest cities of the country. Consequently, these cities become more attractive for investors. Barcelona is already labeled as the city of “Strong Investment Interest”, while Madrid is named the area of “Growing Investment Interest”.

Luxury hotels in Spain have suffered from a severe recession in recent years. The study, which covered famous luxury hotels in Barcelona (W Barcelona, Hotel Claris, Mandarin Oriental, Hotel Arts, El Palace Hotel, and Majestic Hotel & Spa) and Madrid (Hotel Ritz, Hotel Gran Melia Fenix, Hotel InterContinental, Hotel The Westin Palace, Hotel Urban, and Hotel Villa Magna), shows that within the past decade the increase of supply estimated 75% in Barcelona, and 85% in Madrid. On the other hand, the number of tourists has also increased. In 2012, Barcelona was visited by 6.3 million people, Madrid – by 7.4 million. The increase estimated 86% for Barcelona, and 70% for Madrid. The analysis of revenues shows a significant growth over the last two years (from €176 to €220) as the demand is still higher than supply. As almost no new openings are expected in the 5-star segment of Barcelona and Madrid in recent years, it is forecasted that revenues will continue rising during next several years.

14.06.2013

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