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Luxury Giants Look Down On Madrid & Barcelona

1/02/2014 – Expansión

Opportunities on the Spanish hotel market revive. Not only in terms of investment (€791 million in 2013, 50% more than in the previous year) but also the tendency moving upwards. (…).

In Madrid, where the market is largely occupied by national brands, like Meliá, NH and AC, the development process is slower. In the last years, flags of brands like Sheraton (of Starwood), Marriott & Indigo (of InterContinental) appeared in the capital Spain.

The real trouble is observed in the 5-star segment, where the setback on the market caused scarcity in options. In Madrid, the income per available room (RevPar) in 2013 went down by 9% in reference to the previous year.

When it comes to the luxury brands, the deterioration was slighter, of 5%, but in Barcelona, 5-star hotels´RevPar increased by 10% and at present the difference between the two cities exceeds 30%.

The good news is, according to experts, that the prices in Madrid have hit the bottom and in 2014 they could rebound if the economy improves (…).

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“Madrid is lacking the international brands and 5-star hotels”, says Luis Arsuaga, vice-CEO of the Jones Lang LaSalle Hoteles in Spain. “Luxury hotels make only 5% if juxtaposed with the European mean of 12% and the 15% score of Barcelona”. That is why, the chains like Hilton and Kempinski are fiercely bidding for the Hotel Miguel Ángel management. (…) Another potential opportunity is the Villa Magna, abandoned by Hyatt, now belonging to Portugese Sodim.

In regard to Barcelona, the city will amplify its offer with brands like Hyatt (in Torre Agbar) and InterContinental (the Hotel Rey Juan Carlos). Four Seasons, Starwood, Hilton or Jumeirah are also seeking locations in the city.

Original article: Expansión (Y. Blanco, T. Díaz)

Translation: AURA REE