Investment funds are confident in the recovery of the hotel sector after the Covid pandemic and in Spain’s ability to once again become a tourist leader after the setback suffered by the pandemic and the restrictions on travel by the main source markets. Despite the blows of the virus in its new variants, 2021 marked a milestone in the sale of hotels in Spain, with almost 3,200 million euros invested, which is the third largest record in the history.
This figure implies tripling the volume of 2020 and represents a growth of 26% compared to 2019, the year prior to the outbreak of the health crisis. According to data from Colliers, 127 hotels were transacted in Spain with 22,249 rooms and a record was reached in the average price paid per room thanks to the fact that very exclusive hotels were sold that would not have been possible without the need of many large chains to make cash.
Oxygen for hotel groups
On the selling side the hotel groups have gained oxygen in order to cope with the drop in activity and curb leverage. The funds, major players on the buyer’s side, have taken advantage of this situation to acquire prime assets or outstanding portfolios. The hotel sector is still going through a difficult time but better times are getting closer and closer. Although the improvement in tourism will slow down the pace of divestments, there are currently operations in negotiation for more than 1,500 million.
2023 year of recovery, 2024 year of profitability
The sector agrees to set 2023 as the year of recovery, and postpone the full return of pre-Covid profitability until 2024 due to the foreseeable drop in margins. Between January and November, 28.2 million foreign tourists arrived in Spain, 9.9 million more than a year earlier, with an expenditure of 31,274 million (63.8% more). Despite the clear recovery compared to 2020, the figure is light years away from the 79 million international tourists who arrived in Spain during the first eleven months of 2019.
Source: Expansión.
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