Summary

Spain is the fourth most visited country in the world according to the latest statistics (mention source here the other statements would automatically explain the source). Spain recorded more than 82 million tourists visiting the country in 2018. The capital city Madrid welcomed 10.2 million tourists in 2018 which is an 8% increase over 2017, of whom around 53% are international visitors according to the report of Anuario de Turismo Madrid (Madrid Tourism Office). The rising number of international visitors is encouraging international brands to invest in the Spain hospitality industry which is dominated by domestic brands and European origin brands. According to Horwath HTL, the overnight stays grew by 11% year on year in 2018 and international overnight stays were greater than national stays which accounted for more than 61% and 39% respectively. The hospitality industry is expanding in a rapid manner and is registering more new rooms openings year on year. Further, the shift in developments from urban regions to locations that are nearer to islands is observed which is representing the changing interests in customers' preference for more relaxed experiences in the travel and stay. the upper-upscale and luxury categories have registered more growth in recent times. The 4-star stay dominated the investments with around 57% followed by 3- star stays with 31% during 2015-2018. The one trend that occurred in most of the recently opened hotels in Madrid and other urban locations is the accessible roof top experience with restaurant or bar or both, which clearly explains the investors interest in attracting customers by providing stunning city skylines and the views from such a height in an exclusive environment.

Key Market Trends

Rising Number of International visitors are Accelerating the Growth of Hotels in Island Regions

The tourism industry in Spain is greatly dominated by international tourists. In 2019 from January to July, national arrivals increased by 2.6% whereas the international arrivals rose by 18.1% of which the USA accounted for 6.7% alone. A trend has been observed where most of the international travelers are preferring stays near or in island locations than the urban locations even though the cost them more. In recent times more than 70% of hotel transaction activity took place in the six regions which recorded 92% of international tourism. The Catalonia region occupied the first position with 23.8% of the total receipts followed by the Balearic Islands with 18.0%. The Canary Islands, Andalusia, and Valencia 10.4% have also registered transaction volume. The Balearic and Canary Islands together have represented almost 40% of the total investment volumes.

Domestic and European Origin Brands are Dominating the Market

The international capital flows from the USA accounted for EUD 2,177 million in 2018. The brand penetration for chain hotels is comparatively high than the individual hotels in the region. Different chain hotel brands in Spain registered around 34% year on year change in 2018 when compared to 2017 which is the highest among all the European countries. There are 253 different hotel brands with around 2,400 hotel properties and are offering more than 392,000 rooms in Spain which are spread across different locations and islands of which 187 are domestic and European born of which 66 constitutes to the international brands.

Competitive Landscape

The international brands and their chain penetration rates have reached stabilization as the market is dominated by different domestic and European born brands. The opportunities for international chain penetration and growth are limited yet holds a scope with brand tie-up or in collaboration with the smaller domestic hotels.

Additional Benefits:

The market estimate (ME) sheet in Excel format
3 months of analyst support

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