Business Outlook 2025 | Hotels - Spain & Portugal
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Market Overview
2024 set new heights for the Spanish hotel industry, with record ADRs and occupancy rates following a remarkable 2023.
Spanish resorts have consolidated their position as the leading sun and beach hub in Europe, and indeed the world. Meanwhile, urban destinations continue to offer a mix of excellent leisure and business facilities. Demand from European and US markets contributed to an improvement in performance year-on-year, with RevPAR increasing steadily in all destinations. The market is undergoing structural changes, with international destinations making progress in reducing seasonality and attracting more visitors throughout the year.
As of November 2024, ADRs were up 7% on 2023 (up 32% on 2019) and occupancy increased to a solid 71% (up 2% on 2019), resulting in a whopping 10% increase in RevPAR (up 35% on 2019). In terms of overnight stays, demand in the country grew by 5% versus 2023 (6% up versus 2019), demonstrating the success of Spain as a tourist destination.
Regarding transactions, the market remains strong with some significant deals and a global volume of above €3.2 billion, but is lagging behind 2023 figures, when large portfolio transactions somewhat changed the global picture. Apart from the lack of large portfolio transactions, another reasons for the lower level of activity is that asking prices remain high due to the strong operational performance of the assets and the solid financial situation of the main operators.
In 2024, our team was involved in numerous projects, both on the advisory side with several commercial due diligence, feasibility studies and valuations, and on the brokerage side with some successful operator searches and various sales mandates for prime assets in some of Spain's best destinations.
Key Market Trends
As we navigate through 2025, the macro-economic landscape remains challenging despite Spain’s relatively strong economic performance compared to neighbouring countries. While the battle against inflation appears to be behind us, governments are now focusing on reducing their deficits. This will likely result in reduced public spending and/or the introduction of new income sources, which could pressure consumer spending power and limit hoteliers’ ability to further increase prices.
On a positive note, energy costs have returned to reasonable levels. The recent energy crisis has compelled hoteliers to adopt more efficient practices, which will help maintain strong bottom line conversions. These factors, combined with an increased appetite for the hotel sector from institutional funds and REITs, should sustain transactional activity in 2025, although it remains to be seen if secondary destinations will benefit from this situation.
Market Sentiment
We anonymously surveyed hotel business owners across the country to gather their views on the year ahead.
Market Predictions for 2025
- Occupancy rates will remain stable in 2025 and ADR should see a moderate growth rate
- Institutional investors will come back to the market, incentivised by the lower cost of debt and the need to diversify their investments
- Operators will be looking to acquire assets in top leisure and urban destinations
- Economy and mid-scale operators will accelerate their growth in Spain
- International brands will keep pushing to further penetrate the market with the help of white label operators
Case Studies
We were appointed in February 2024 to undertake a development options analysis and commercial due diligence for a 60+ key luxury hotel in Lisbon, Portugal. We carried out extensive market research including a local economic and demographic profiling, competitive market analysis and benchmarking to identify key competitors.
Major Transactions in 2024
| Date | Business | Purchaser | Details |
| Jan | Hotel Miramar | Atom Hoteles | 5-star luxury hotel in Barcelona (75 keys) sold as a portfolio together with Gran Hotel La Florida for €50 million |
| Jan | Gran Hotel La Florida | Atom Hoteles | 5-star luxury hotel in Barcelona (70 keys) sold as a portfolio together with Hotel Miramar for €50 million |
| Mar | Hotel Be Live Costa Teguise | Atalaya | 4-star hotel in Tenerife (237 keys) sold by Iberdrola |
| Mar | Hampton By Hilton Barcelona Fira | London & Regional | 4-star hotel in Barcelona (241 keys) sold by ASG for €50 million |
| Apr | AC Hotel Iberia Las Palmas | Lopesan | 4-star hotel in Gran Canaria (291 keys) sold by AC Hoteles |
| Apr | OD Barcelona | Undisclosed | 4-star hotel (98 keys) in Barcelona sold by OD Group |
| Apr | Palacio Solecio | Undisclosed | 4-star hotel in Málaga (118 keys) sold by ASG |
| Apr | Hotel Presidente | Meridia | 3-star hotel in Ibiza (225 keys) sold by Oak Hill for €70 million |
| May | Hotel Mayorazgo | Grupotel | 4-star hotel in Madrid (200 keys) sold by Salazar Gordon family for €60 million |
| Jun | Hotel Six Senses Ibiza | Grupo Statuto | 5-star hotel in Ibiza (116 keys) sold by Beach Box for €200 million |
| Jul | Hotel Rafael Atocha | Bancalé | 4-star hotel in Madrid (245 keys) sold by Reyal Urbis for €81 million |
| Oct | Hotel Ilunion Almirante | La llave de Oro | 4-star hotel in Barcelona (86 keys) sold by Ilunion for €31 million |
| Nov | Hotel Miguel Ángel | Lopesan & Stoneweg | 5-Star hotel in Madrid (241 Keys) bought by Lopesan in a joint venture with Stoneweg |
| Dec | Porfolio Bantyre | Hyatt | Portfolio of three hotels in Tenerife (867 keys) sold by Jewel Holdco (company that owned the assets) |
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