The hotel real estate sector in Spain is showing pronounced signs of recovery, which is confirmed by sales data for the first quarter of 2022. In the first three months of the year, in annual terms, the total amount of sales in this market segment increased to EUR 995 million. This is three times more than the results of the first quarter of 2021.
According to CBRE, a real estate and investment services company, the first three months of this year can be confidently called the best period among similar ones over the past 10 years. At least in the specified sector of hotel real estate. 37 hotel assets and 5,042 rooms were acquired. For comparison, at the beginning of 2021, only 11 assets and 643 numbers were sold.
37 assets acquired at the beginning of the year, 19 were «4-star» hotels, and 6 were «5-star». This clearly demonstrates the strength of the premium sector of the hotel market. Jorge Ruiz, Head of the hotel business at CBRE, pointed out that two years after the start of the coronavirus pandemic, the hotel sector has finally begun to show an upward trend, although mainly due to the explosive growth in demand from returning tourists. How the market will show itself after the wave of returns descends is a question that requires further observations.
Regarding the growth in demand, it is enough to point out that in the first quarter of 2022 alone, Spain was visited by over 15 million people who made 142 million monetary transactions of one kind or another. This is still 20% lower than in 2019, but it already corresponds to the first quarter of 2020 — right at the beginning of COVID-19.
It is also worth remembering in detail what this sector looked like before the outbreak of the pandemic in 2019. The average cost of renting a hotel room increased by 6%, but the income from each such room fell by 10%. The urban segment dominated provinces and resort areas — 57% to 43%. The leading regions were the Balearic Islands, Madrid, the Canary Islands and Barcelona — the share in total demand was 24%, 22%, 15% and 15%, respectively.
The main categories of depositors were institutional investors, followed by hotel chains. Together, all these depositors accounted for 78% of investments. According to the national composition of investors, Spaniards (41%) and Germans (20%) were in the lead.