10 July 2017 – Reuters
Attracted by encouraging forecasts in the hotel sector, domestic and international investors alike purchased 79 hotels in Spain during the first six months of 20176, for a combined amount of €1,655 million, according to a report presented on Friday by the consultancy firm Irea.
The consultancy said that the figure for the first half of this year exceeds the volume recorded during the same period a year earlier by more than double and “should allow the sector to break the historical record for investment reached in 2015, when more than €2,600 million was spent”.
The strong interest in the hotel segment is being driven by a significant increase in hotel rates and sustained demand from tourists.
Spain received almost 28 million international tourists during the first five months of 2017, which represents an 11.6% increase compared to the first five months of last year, when foreign visitor numbers exceeded historical records for the second year in a row.
Spain received a record 75.5 million tourist visits in 2016 and Cehat forecasts that this year the figure will exceed the threshold of 80 million visitors.
According to Irea, investment in the hotel sector was split almost equally between the holiday segment (52%) and the urban segment (48%).
Two deals stood out in the urban sector during H1: the purchase of 55% of the Hilton Diagonal (4* – 433 rooms) by Axa Investment Managers and the acquisition of Hotel Silken Diagonal (4* – 240 rooms) by Benson Elliot and Highgate, both of which were closed for prices of more than €300,000 per room, said Irea.
Meanwhile, in the holiday segment, the star buy was London & Regional’s purchase of a portfolio of 4 hotels containing 2,050 rooms in total from Starwood and Melià, for an estimated amount of €240 million.
According to data from Spain’s National Institute of Statistics, there are 15,855 hotels in Spain, with a total of 822,002 rooms.
Of the 31.5 million overnight stays recorded in May (the latest figures available), 71.3% corresponded to foreign guests and the remaining 28.7% related to domestic customers.
The expectations of another record summer have boost hotel rates in recent months. According to the latest report from Trivago, hotel prices in Spain rose by 14% YoY on average in June to reach €134 per night.
Original story: Reuters
Translation: Carmel Drake