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Hotel investments down by 61% in Spain in 2020

The volume of hotel investment in Spain dropped by 61% in 2020 compared to 2019 due to the coronavirus health crisis and the months of confinement, according to data from the real estate consultancy CBRE. In total, in 2020 77 hotel assets worth 960 million euros were transacted, adding up more than 6,800 rooms and 2,000 future rooms in buildings, plots and projects sold.

Vacational assets

Of the total investment, 74% went to individual assets, while assets from portfolios captured 26%. A figure higher than that of 2019 (21%).  In addition, in 2020 the trend of other years, when investors opted more for urban assets (55%), was reversed, since vacational assets accounted for 61% of total investment.

Balearics most popular destination

The Balearic Islands topped the list of main destinations in 2020, with 34% of total investment, followed by Barcelona (18%), the Canary Islands (13%) and Madrid (11%). In 2019, the Spanish capital held the number 1 position. Regarding the investor profile, institutional investors ranked first, rising from 29% in 2019 to 44% in 2020. Next came were private investors, family offices and real estate companies or other sectors (37%) and hotel groups (16%). Last year hotel groups came in first with 38%. Finally, the hotel category to which the most investment has been allocated in 2020 were 4-star hotels (38%), followed by 5-star and luxury hotels (33%). For their part, the 3-star ones only represented 9% of the volume.

Positive trend expected for 2021

Jorge Ruiz, director Hotels within CBRE, states that 2020 started in a positive way, but with the arrival of the pandemic, factors such as the great uncertainty of the markets, the scarcity of bank financing, the slowdown in operating activity and the difference in price expectations between buyers and sellers have held back the market. Despite the decline in investment, the consultancy expects a market recovery this year. The head of Hotel Investments Europe of CBRE, Miguel Casas, predicts a considerably higher transactional activity, which will accelerate especially from the second trimester.  

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