DISCLAIMER: This post was last modified on 5 September 2024. Some information in this article may not be updated.

In 2023, Spain led Europe in hotel investments, per a Colliers report, overtaking Germany, France and the United Kingdom, which have historically held the leading spots. Globally, Spain was second only to the United States in terms of hotel investments, which totalled €4.248 billion. A significant chunk of the investments was from foreign capital.  

The country’s thriving hotel market is proof of Spain’s expanding hospitality industry. With its strong appeal to tourists and a wide range of hospitality investment opportunities, Spain has become a leading destination for foreign investors in the hospitality sector.  

What drives hospitality investments in Spain?  

Tourism

The influx of tourists in Spain is a main driver of the sector’s growth. Recently, the country experienced a surge in visitors, recording 53.4 million people in the first seven months of 2024. As a result, Spain experienced growth in property investments in tourist destinations such as the Canary Islands and the Balearic Islands. Tourist spending also rose to €71.1 billion, presenting an opportunity for investors in Spain’s hospitality sector, which includes accommodations, food and beverage services and other leisure facilities. 

Government Support 

The Spanish government has allocated €478 million of European funds to create 175 tourism sustainability projects, aiming to modernise the country’s top beach destinations. The initiatives allow for a favourable business environment for hospitality industry investments. Government support is also reflected in the laws regulating the hotel industry. This includes a new hotel classification system based on innovation, digitalisation and sustainability criteria. For example, hotels in the Balearic Islands are urged to adopt paperless transactions, encouraging hotel investors to align their business with sustainability goals. 

Gateway to European markets 

Spain boasts a robust transportation infrastructure that attracts travellers with direct flights and railway routes to Spain. Its infra facilities have also allowed Spain to attract more tourists from nearby regions, such as the UK, France and Germany, becoming a gateway to EU markets. The report mentioned above states that the country’s top visitors are from the United Kingdom, with more than 10.5 million tourists in the first half of 2024. Meanwhile, France comes second with almost 7.1 million visitors, then Germany with more than 6.8 million. 

Investment opportunities in Spain’s hospitality industry 

Commercial Real Estate and Hotel Development 

Investments in Spain’s hotel market have significantly contributed to the growth of the hospitality industry. Investing in hotel development promises to be profitable, as occupancy rates in Spain also improved to 61% in Q1 2024, up from 59% in Q1 2023. According to reports, the industry acquired €1.3 billion in investments in the first half of 2024, with market players preferring to invest in Spain’s high-end luxury properties. 

Commercial real estate investment can also yield profits in the hospitality industry. According to a Hospitality Investment in Spain Report, more travellers seek a blend of work, leisure, wellness and sustainability. Hotels are now adapting to these trends by offering tailored services, advanced technology and eco-friendly practices.  

Partnerships and Acquisitions 

Spain recently regulated and announced a ban on short-term rentals by 2028. The ban was placed to improve the locals’ housing situation, which was affected by short-term apartment rentals. However, it may impact accommodations and local tourism. Investors can fill in this gap by partnering with property companies and developing new hotel projects. 

Market players can leverage management and franchise contracts to attract international investors to acquire hotels in Spain. Significant transactions like the acquisition of Mandarin Oriental Barcelona by Olayan Group show strong interest from global capital.   

Diverse Tourism Experience

Spain’s Mediterranean climate, pristine beaches, rich cultural heritage and vibrant cities have made it a popular destination for travellers worldwide. Establishing accommodations in Spain can be beneficial for investors looking to offer a unique travel experience. With the influx of tourists in the country, the demand for lodging, dining and leisure services results in a thriving hospitality market.  

Our solutions for hospitality investors in Spain  

This study predicts Spain will become one of Europe’s most visited countries by 2040. Due to this, Spain’s hospitality industry presents a compelling investment opportunity, thanks also to the country’s favourable business environment, strong tourism appeal and diverse investment options. 

Bolder Group assists investors by providing market entry and corporate administration solutions in several industries, including the hospitality sector. We can facilitate company formation, SPV structuring and relevant activities, like partnerships with property companies or hotel acquisitions. To learn more about investing in Spain’s hospitality industry and how we can make the process smoother, contact our team.  

Bolder Group does not provide financial, tax or legal advice, and the information contained herein is meant for general information purposes only. We strongly recommend that before acting on any of the information contained herein, readers should consult with their professional advisers. The Bolder Group accepts no liability for any errors or omissions in the information, or the consequences resulting from any action taken by a reader based on the information provided herein.

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