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Hotel Barometer produced by STR and Cushman & Wakefield - Close of 2023

Bruno Hallé • 29/01/2024
Revenue per available room (RevPAR) for Spanish hotels rose to €105 in 2023, some 16.5% up on the figure for the close of 2022.

An overnight stay at a Spanish hotel was some 8.3% more expensive on average during 2023, with an average daily rate (ADR) of €144. This compares to  the €133 recorded for 2022. Growth now amounts to 22% in comparison with 2019 (with an ADR of €118).  

Occupancy likewise trended upwards in comparison with 2022, going from 67.7% to 72.8% in 2023. This increase of 7.4% brings the occupancy figure close to 2019 levels (74.7%). 

Barcelona and Granada led the pack in terms of growth in revenue per available room (RevPAR), with rises of 24.7% and 24.5% respectively. With an average daily rate of €150 for the year as a whole, Madrid’s RevPAR also grew by more than 20%. 

Spain’s hotel performance indicators closed 2023 showing either all-time records (in the case of ADR and RevPAR) or just short of historic peaks (in terms of occupancy). Data from the Hotel Sector Barometer, produced jointly by STR and Cushman & Wakefield, confirmed the strong momentum in hotel and tourism activity in all destinations, though growth was more significant in major cities than sun and sand destinations, in part due to the fact that 2022 was such an excellent year for the latter. 

Comparison with the close of 2019 is useful here given that it has, to date, been the best ever year for the hotel industry. Having grown by 7.4% from the close of 2022 to reach 72.8% by end of 2023, occupancy remains the only indicator to lag just some 3% below 2019’s figures (74.7%). In contrast, both ADR and RevPAR now f
ar exceed the 2019 levels. The ADR for 2023 (€144.50) is some 22% above the €118.40 recorded in 2019, whilst RevPAR has also gone from 2019’s €88.50 to €105.10 in 2023, amounting to growth of 18.7%. 
 
Malaga, Valencia and Barcelona top the occupancy rankings 
 
As in the case with the preceding quarters, the close of year once again showed Malaga, at 82.9%, as having the highest occupancy rate of cities in Spain. Also exceeding the 80% figure, it is followed at the top of the table by Valencia (80.2%) and then Barcelona, at 78.3%. In comparison with 2022, occupancy has grown by 7.4% throughout Spain as a whole, rising to an average of 72.8%. As mentioned, this figure is still some 3% below the 74.7% occupancy recorded during 2019. 

The highest growths in occupancy over the year were recorded by Bilbao (+11%), Cordoba (+10.7%) and Barcelona (+10%). In contrast, at 63.8% Marbella recorded the lowest occupancy and growth of 1.9% on the figure for the previous year.  

According to Elvira Arjona, Account Manager Spain at STR, “In terms of the occupancy trend, the conclusions at the close of year point towards their still being some margin for continued growth in 2024. This is demonstrated by activity in terms of bookings and anticipation of the full recovery of feed markets such as Asia and Latin America”. 

 

For his part, Bruno Hallé, Partner and Co-head of Cushman & Wakefield Hospitality Spain, considers that “occupancy in holiday destinations appears to be approaching its peak, as demonstrated by the data for destinations such as the Canary and Balearic Islands, whereas there still seems to be some margin for increased demand in city tourism with the full recovery of corporate travel and markets such as North America and Asia”. 

 

 

At 17.4% and 14% respectively, Granada and Valencia record the highest rises in average daily rates

At €278, Marbella continues to boast the highest average daily rate (ADR), despite being the only destination in which prices fell in comparison with 2022 (by -2.3%). The following destinations with the highest average daily rates include the Balearic Islands (€176.60) and Barcelona (€172.70). At 12.8% in comparison with 2022, the price rises in Madrid are also worthy of note, bringing the annual ADR up to €150. 

The largest price increases were noted in Granada (+17.4%), climbing to an average of €103, along with Valencia (+14%), reaching €122.20. With an increase of 13.6%, Malaga rounded off the podium of cities with the greatest rises in ADR, achieving €141.10. The most economical rates were to be found in Zaragoza (€69.80) and Cordoba (€96.67), the only cities below an average of €100.

In the view of Albert Grau, Partner and Co-head of Cushman & Wakefield Hospitality Spain, “demand continues to strengthen throughout Spain, with increased arrivals of international visitors that have enabled prices to be updated during 2023. These rises must be framed within the context of high inflation and interest rates squeezing the operating margins of businesses. The forecast points towards a continued upward trend in prices in 2024, though somewhat more moderate”. 

 

For the first time, Spanish hotels exceeded RevPAR of €105 for the year as a whole 

The indicator showing the most positive evolution throughout 2023 was revenue per available room (RevPAR), with average growth for the year of 16.3%. This rise has pushed the indicator to €105.10, which compares to the€90.40 for the preceding year and a figure of €88.50 in 2019. Revenue growth is a consequence of both higher prices and increased occupancy as a result of surging demand. 

As is commonplace, the destination showing the highest RevPAR was Marbella (€177.60), this being a consequence of the type of hotel offering made by the Costa del Sol. Despite heading up the ranking, Marbella’s RevPAR figure was the only one in Spain to slightly soften, by 0.4% in its case. 

Marbella is followed at the top of the table by Barcelona, with €135.10 and a rise of 24.7% on the preceding year, along with the Balearic Islands, whose €117.80 represents growth of 7.3% on 2022. RevPAR increases exceeding 20% were also enjoyed by Bilbao, Granada, Madrid, Malaga, Seville and Valencia. The lowest RevPAR figures corresponded to Zaragoza (€51.10), Cordoba (€69.30) and Granada (€71.50). 

 

Hotel investment exceeded €4 billion thanks to the closure of three major deals 

Hotel investment in Spain exceeded €4 billion by the close of the year, a record driven mainly by three major deals: the entry of the sovereign wealth fund GIC into HIP’s shareholder group and the acquisition by the sovereign wealth fund ADIA of two asset portfolios managed by Meliá. 

Aside from the aforementioned transactions, the investment market suffered from a lack of offerings. This was largely due to the strong operating performance of the hotel industry as shown by the indicators laid out in the Barometer. The sector is currently enjoying low levels of indebtedness and the absence of NPLs (Non-Performing Loans). As a result, opportunistic deals are proving to be few and far between. In contrast, and as a result of their reduced requirement for funding, it was a good year for investors with equity on the lookout for trophy hotels and other assets in good locations.  

The Hotel Sector Barometer brings together data from 1,200 hotels and around 180,000 rooms on the Iberian Peninsula. The study is the product of an alliance between STR, a worldwide provider of benchmarking, analytics and market knowledge specialising in the hotel sector, and Cushman & Wakefield Spain, the world leader in real estate services.

MEDIA CONTACT

Jenny Pizarro
Jenny Pizarro

International Partner, Head of Business Development Services, Spain, Portugal & Italy • Barcelona

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