Hotel Revenues Fell by 41% in March

Hotel occupancy rates fell by more than 45% in March, after just 15 days of confinement, and the average revenue per room decreased by 41%.

On Thursday, Spain’s National Institute of Statistics (INE) published the first official figures showing the impact of the coronavirus on the Spanish tourism market. According to this data, in the month of March alone, with lockdown measures decreed on the 14th of the month following the State of Emergency, hotels in Spain saw a 41% decrease in their revenues, whilst occupancy rates fell by more than 45%.

In March, the average daily revenue per available room (RevPAR) -which is determined by the occupancy rates recorded in hotel establishments- stood at €29.7, down by 41% compared to the same period in 2019. The average daily rate for each occupied hotel room (ADR) was €78 in March, which represents a decrease of 4.2% compared to the same month of 2019.

Hotel Sector Sees Continued Strength in Year to June

29 July 2019 – Richard D. K. Turner

According to the Hotel Sector Barometer, Madrid and Barcelona saw RevPAR growth of 15.1% and 12.7%, respectively, in the first half of 2019. The study stems from a partnership between STR, a global benchmarking, analytical and market knowledge provider, and Cushman & Wakefield Spain.Cushman & Wakefield

Continuing a trend that began at the beginning of the year, RevPar in the Canary and Balearic Islands fell by 4% and 3.6%, respectively. Brexit fears and increased competition from countries such as Turkey, Egypt, Tunisia and Israel have weighed on demand.

The average daily rate per occupied room rose by 2.8% in Marbella, 6.5% in Barcelona and by 13.2% in Madrid. Malaga, Seville and Valencia also posted ADR growth above 5%, while the ADR fell by almost 2% in the Balearic and Canary Islands. ADR grew by 5.3% for Spain as a whole.

Original Story: Hosteltur

CBRE: Hotel Investment in the Balearics Doubled in 2018 to c. €1bn

26 March 2019 – Preferente

According to data compiled by CBRE, 47 transactions were closed in the hotel market in the Balearic Islands in 2018, corresponding to a total investment volume of more than €967 million. That figure accounted for 20% of the capital invested in Spain during the year and 32 of the transactions were concentrated in Mallorca, followed by Ibiza with 11 operations and Menorca with just 4.

Most of the operations involved hotel portfolios although two individual asset sales stand out due to their high prices per room: Hospes Maricel & Spa (as part of the Hospes Portfolio) and Belmond La Residencia. Both are 5-star establishments.

Palma (de Mallorca) maintained its position as an attractive urban tourist destination, with the addition of seven new hotel establishments comprising 275 rooms during 2018 alone.

More than 10.3 million visitors travelled to the Balearic Islands during 2018, up by 2.3% YoY, breaking the record the fourth year in a row. Nevertheless, the number of overnight stays fell slightly to 59.3 million (down by 0.4% YoY). Meanwhile, the ADR of the hotels on the islands broke the €100 barrier to reach €104.10 in 2018, up by 5.5% compared to 2017. In addition, RevPAR rose by 3.5% YoY to €80.10.

Original story: Preferente (by R.P.)

Translation/Summary: Carmel Drake

STR & Magma HC: Hotel Investment Continues to Rise in Spain

2 August 2018 – Hosteltur

The Spanish hotel industry has increased its interest in investment due to the strong growth in yields in several markets, and despite the fact that the political scenario in Cataluña has slowed down the performance of the country as a whole. That is according to analysts from STR and Magma HC, who explain that the investment boost has been largely driven by the strength of international demand, even during the financial crisis.

“The increase in holiday tourism, as well as in ‘bleisure’ (business with leisure tourism) has opened the market to numerous development opportunities, with several operators currently working on improving their products and services to satisfy the growing demand”, says Albert Grau, founding partner at Magma HC. Thus, in his words, the Spanish hotel sector “is continuing to boom, despite the challenges ahead”.

In this sense, it is worth remembering that, between March 2015 and March 2018, Spain registered 37 consecutive months of RevPAR (revenue per available room) growth. In recent months, by contrast, there have been marginal decreases, above all due to the slow down in Barcelona, which is home to the largest number of rooms in the country. Even so, according to data from STR, in most of the key domestic markets, including in Madrid, hotel yields are continuing their strong upwards trend.

“Vacation markets, primarily Gran Canaria, have experienced YoY decreases because tourist demand has returned to rival destinations such as Turkey and Egypt”, says Javier Serrano, manager at STR for Spain.

Barcelona

STR’s study shows that, in general, hotels in the Catalan capital have managed to keep their tariffs more or less stable, although there have been more notable decreases in recent times. Following the independence referendum last October, the occupancy rate of establishments in Barcelona fell considerably. During the first half of 2018, they fell by 5.2% with respect to the same period a year earlier, whilst the ADR (average daily rate) fell by 1.4% compared to 2017.

“Although it is still too early to make any kind of prediction about what will happen in the market in the end, it is likely that Barcelona will recover quickly once the situation stabilises”, says Serrano. “Hotels in Barcelona”, he adds “saw constant monthly RevPAR growth rates in the double digits in 2016 and 2017, when the market was still benefitting from strong international demand and demand diverted from destinations such as Turkey and the north of Africa. The recent instability in Barcelona slowed down those previous growth rates, with decreases in occupancy rates driven by the decrease in domestic and international demand, mainly from the USA. Nevertheless, if the market manages to keep tariffs stable, we should see growth to the extent that consumer confidence returns to Barcelona”.

Madrid

Madrid, with the highest RevPAR growth rate in all of Spain in 2017, has benefitted over the last three years from demand due to leisure and corporate business. As well as being one of the main weekend destinations for Europeans, it has also seen an increase in interest from several Asian countries and the USA, especially when it comes to group reservations (…).

The Director-General of STR, Robin Rossman, believes that “there is enormous potential for Madrid’s hotels to continue pushing up rates”. In his opinion, “to the extent that demand continues to grow and the hotel supply market continues to evolve with the arrival of more high-end properties, we can expect to see increases in the ADR”.

Overall, the analysts at STR expect that corporate demand in Madrid will continue to increase thanks to the celebration of international events and the relocation of the headquarters of several companies from Barcelona to the Spanish capital. As such, they forecast ADR growth of close to 3% in Madrid by the end of 2018.

Original story: Hosteltur

Translation: Carmel Drake

Hispania Earns 31% More & Increases Its Revenues By 19%

15 November 2017 – Expansión

Hispania – the Socimi in which George Soros holds a stake – increased its net profit to September by 31% to reach €179 million, whilst its revenues rose by 19% during the period to €119 million.

By business segment, hotel revenues rose by €98 million or 21%. Hispania explained that the good performance recorded during the first nine months of the year was due to a 10.2% improvement in the average daily price per occupied room (ADR) and a 10.6% rise in the revenue per available room (RevPar) of its hotels in the Canary Islands.

Meanwhile, the turnover of its offices reached €16 million, up by 16.6%. During this period, Hispania increased the occupancy rate of its offices from 82% in December 2016 to 86% with a gross space leased of more than 15,000 m2 during the period.

The company, which had been negotiating the sale of its office portfolio, decided to postpone that operation due to the situation in Cataluña. Hispania expects to resume the sales process during the first quarter of next year.

Finally, revenues from the residential area decreased by 12% to €4.1 million. Hispania is continuing with its plan to sell homes in the retail market, which it began at the end of 2016. During the period, the Socimi sold 47 units in total between Isla del Cielo and Sanchinarro (Madrid), to accumulate a gain on the sale of 38% on the investment made.

Revaluing its portfolio

The value of the company’s real estate assets as at 30 September amounted to €2,347 million, which represents an increase of 17% with respect to the start of the year and a rise of 40% compared to the same period last year.

By segment, the value of Hispania’s hotel assets amounts to €1,516 million, its offices are worth €591 million and its residential assets amount to €239 million.

At the end of the period, Hispania had financial debt amounting to €620 million in total, with an average cost of 2.6%, compared to €631.3 million at the same time last year.

Original story: Expansión (by R. Arroyo)

Translation: Carmel Drake

Deloitte: Hotel Inv’t Will Exceed €3,000M In 2017

7 November 2017 – Expansión

The extraordinary tourism data in Spain, the interest from investors in real estate assets and the purchase by international funds of hotel portfolios has catapulted investment in the Spanish hotel segment so far this year to €2,600 million. That figure is 21% higher than the total amount recorded in 2016, and is very close to the record figure of €2,700 million recorded in 2015, according to The Hotel Property Handbook report, prepared by Deloitte España.

In this way, the hotel sector now accounts for 35% of total real estate investment in the tertiary sector (non-residential assets) in Spain. The firm forecasts that, by the end of this year, the investment volume figure will have easily surpassed the €3,000 million threshold.

In terms of the main operations of the year, the purchase by the US fund Blackstone of the HI Partners hotel portfolio, comprising 14 establishments, from Sabadell for €630 million and the acquisition by the British fund London & Regional of four Starmel hotels – a joint company formed by Meliá and Starwood Capital in 2015 – for €230 million, have given the investment figure a real boost.

Record operations

These operations have been accompanied by several one-off hotel transactions, such as Edificio España, which was acquired by RIU in June for €272 million (…).

Other noteworthy operations so far this year include the purchase of Hotel Silken in Barcelona by the British fund Benson Elliot for €80 million and the acquisition of 55% of Hotel Diagonal Mar in Barcelona by Axa for €80 million.

For Javier García-Mateo, Partner at Deloitte Financial Advisory, institutional investors are seeing the opportunity to build large portfolios of holiday hotels in Spain, to integrate them into their international platforms in the Caribbean, South America and South-East Asia, developing a direct channel and obtaining greater negotiating power with tour operators. “In the end, Spain is establishing itself as the world’s main tourist market”, he says.

In this sense, we are seeing the natural migration of traditional hotel owners, who are divesting property to focus on management, such as in the case of the Meliá chain, which is making way for overseas investors who have greater financial muscle and so can launch more ambitious projects, explains Patricia Pana at Deloitte Financial Advisory.

In this context, the large tour operators are also participating in the investment fever and are buying assets in order to carry out a vertical integration of their business (…).

Interest from investors is partly driven by the record number of visitor arrivals – more than 84 million international tourists are forecast to visit Spain this year – and the strong evolution of key performance indicators such as the average daily rate (ADR), revenue per available room (RevPAR) and the occupancy rate.

Peak returns

Specifically, the ADR in Spain reached an average of €82.30 in 2016, up by 5% YoY; the occupancy rate rose by four percentage points to 66%; and RevPAR increased by 10% to €53.90.

The challenges for the sector now include improving the hotel portfolio to allow for an increase in prices. “If we compare our hotels with those in other urban and vacation destinations, the price per room of Spanish hotels still has a lot of potential, provided that renovation and transformation projects are carried out with the help of the main operators”, says Ana Granado, Director at Deloitte Financial Advisory (…).

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

STR: Spain’s Hotels Are The Most Profitable In The World

7 November 2016 – Hosteltur

Spain’s hotel industry is one of the most profitable in the world, according to Javier Serrano, Director of STR for Spain and Portugal, who was speaking at a conference entitled “Marketing hotels in the digital age”, organised by the ITH (Technological Hotel Institute). Proof of this comes from the double digit increases in RevPar (revenue per available room) seen during the first nine months of 2016 in the main Spanish capitals, with the exception of Barcelona (+8.9%) and Marbella (+8.2%), which are already well established markets.

According to Javier Serrano, behind these significant increases we find “the strong behaviour of groups, both in the vacation and MICE (meetings, incentives, conferences and events) sectors. Certain destinations, such as Zaragoza, are really benefitting from increased demand from groups. Zaragoza saw a RevPar increase of 20.5% during the first nine months of the year, thanks to the city’s initiative to reuse its old pavilions, built for the Expo, to host these meetings”.

Another contributing factor has been a change in strategy by many of the Chinese airlines, which have increased the frequency of their flights to the Peninsula. They are attracted by the safety of Spain as a destination, given that, according to the Head of STR in Spain and Portugal “the US and Chinese markets are more sensitive to security concerns”.

Meanwhile, the two island groups (the Balearic and Canary Islands), which have seen RevPar increases of between 15% and 17% “are also benefitting from higher demand (diverted from competing destinations currently suffering from political instability) and from the recovery in domestic tourism, together with the low price of oil, which is boosting transport”.

STR’s data reveals that during the first nine months of 2016, the RevPar of Spain’s hotels increased by 13.4% to reach €82.21, driven by an increase in the ADR (average daily rate), which rose by 8.5% to €109.38, and by a rise in occupancy rates, which grew by 4.5% with respect to the same period last year – a record high, according to Serrano, of 75.7%.

The recovery of Madrid

In terms of its average occupancy rate, Madrid has managed to surpass the magic number of 70% in 2016 and now has an average occupancy of 70.4%, up by 3.4% compared to last year, according to the Director of STR, “which means that establishments in the city can now play around more with prices”. Not surprisingly, the ADR in Madrid has increased by 7.1% to €97.29 and the RevPar has also increased by 10.7% to €69.46.

In this way, the capital is recovering as a city break destination, with figures returning to their pre-crisis levels, above all in the case of low-end and mid-range hotels, which, together with the luxury segment, are seeing the most activity. In 2015, Madrid surpassed Barcelona as the primary urban destination for hotel investment, although “investors’ interest in Spain has slowed somewhat in recent months due to the absence of a stable Government. As a result, demand has increased whilst supply has remained almost stable, which has benefitted those properties already in operation. (…).

Original story: Hosteltur

Translation: Carmel Drake

Hotel Revenues Rise & Profitability Soars

16 August 2016 – Expansión

Meliá, Barceló and Grupo Palladium are registering occupancy rates of almost 90% in some of their star destinations and are also achieving double-digit growth rates in terms of tariffs.

The hotel chains are on a roll, with an improvement in sales, occupancy rates and prices this year, and they are getting ready to benefit from the good times that the tourist sector is enjoying to boost their profitability as well. In 2015, Spain broke its record once again in terms of the number of international tourists, with 68 million visits; and all indications show that this year the figure could reach 70 million. (…).

Specifically, Meliá, in line with the data disclosed in its results, forecasts an occupancy rate of almost 80% in Andalucía, where it also expects to see an 11% increase in prices. For the Levante region, the group expects an occupancy rate of 75% and a 10% increase in prices, whilst in Ibiza, it forecasts a 26% increase in occupancy rates and an almost 50% upturn in the average price – due to the repositioning of its hotels on the island. For the Canary Islands, the hotel chain owned by the Escarrer family estimates an occupancy rate of 80% and a price rise of 13%.

This archipelago is also proving fruitful for Barceló. The company expects to close the month of August with full occupancy and a historically high profitability. During the first few weeks of August, the occupancy rate on the islands averaged 90% and average room rates had increased by 12 points.

In the Balearic Islands, the occupancy rates for July and August are in line with last year, but average prices per room have risen by more than 11%. The group highlights its growth in Ibiza, where it will achieve an occupancy rate of 98% in the high season, with a tariff increase of 18%.

For the region of Andalucía, Barceló is maintaining a similar occupancy rate to 2015, with an increase in the price per room of 13%.

Meanwhile, Palladium is forecasting an average occupancy rate for its hotel stock of 88.3%, six percentage points higher than in 2015, with an increase of 10% in the average daily rate (ADR) and in revenues per available room (RevPAR).

Sources at RIU indicate that its business is performing “very well” this season, in line with last summer, when occupancy rates were very high in all of its hotels along the Spanish coast and on the islands. (…).

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Overnight Hotel Stays Rose By 12.4% In February

28 March 2016 – Expansión

Hotel establishments recorded a total of 16.3 million overnight stays last month, up by 12.4% compared to February 2015.

During the first two months of 2016, overnight hotel stays grew by 10.4% with respect to the same period last year, according to figures released on Wednesday by the National Institute of Statistics (INE).

The increase in February was due to a 13.3% increase in overnight stays by non-resident visitors to Spain and a 11.2% increase in stays by residents. In addition, the average duration of stays in February amounted to 2.9 nights per user.

On the other hand, during the second month of 2016, 49.1% of all available places were occupied, which represented a YoY increase of 7.6%. Specifically, the occupancy rate on the weekend grew by 6.4%, to reach 57.2%. By region, occupancy rates in the Canary Islands were the highest, with an average of 77.9%, followed by Madrid (53.4%) and the Balearic Islands (48.9%).

The average daily rate (ADR) per occupied room amounted to €76.60, up by 7.9% compared with February 2015 and the revenue per available room (RevPar) amounted to €43.10, up by 16.5%.

By category, the average rate was €171.20 for five-star hotels, €80.70 for four-star hotels and €57.90 for three-star hotels.

Original story: Expansión

Translation: Carmel Drake